There is increasing managerial and academic interest in understanding behavioural loyalty to private label (PL) brands. A widely used behavioural loyalty measure is share of category requirements, or “SCR”. This study aims to examine why some PLs enjoy higher levels of SCR compared to others.
The study models consumer purchase data using the well-accepted NBD-Dirichlet model to identify the circumstances in which PL brands exhibit higher (“excess”) or lower SCR than expected.
The study finds four factors linked to excess SCR for PLs. They are: higher share of overall category sales accounted for by the PL within the retailer's stores, higher penetration of the category by the retailer, low relative price of the PL, and lastly, lower average purchase frequency for the category overall.
While the study uses 13 product categories, its geographic scope is limited to the UK. Further research could examine how the findings generalize to other markets.
The study is original in that it identifies factors that are linked to behavioural loyalty toward specific PL brands. The findings will help marketers in brand management and retailing to understand and contextualize brand performance metrics for PL brands.
The author gratefully acknowledges the support of Kantar (UK), and Mr John Scriven from London South Bank University, who helped provide the data.
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