Brand image and customers' willingness to pay a price premium for food brands

Abstract

Purpose

The aim is to understand customers' willingness, or unwillingness, to pay a price premium in the market for consumer packaged food and what kind of images brands can use in order to achieve a price premium.

Design/methodology/approach

The study is based on a quantitative survey of brand images found in food and branding literature and their impact on loyalty as well as customers' willingness to pay a price premium for consumer packaged food.

Findings

The survey shows that quality is a significant determinant of price premium, but adding other image dimensions doubles the predictability and understanding about price premium. The strongest determinants of price premium are social image, uniqueness and home country origin. Other significant determinants are corporate social responsibility (CSR) and awareness.

Practical implications

The results help brand managers to recognise the importance of incorporating price premium and to develop a better understanding of what drives price premium in addition to more traditional dimensions as quality and loyalty.

Originality/value

In grocery retailing, the competition for customers, margins and price premiums between manufacturer and private labels is fierce. Traditionally, the literature on this competition has focused on quality and product improvements as the main tool for creating distance to low priced competition. This study looks into other more branding related dimensions to distance from price competition.

Citation

Anselmsson, J., Vestman Bondesson, N. and Johansson, U. (2014), "Brand image and customers' willingness to pay a price premium for food brands", Journal of Product & Brand Management, Vol. 23 No. 2, pp. 90-102. https://doi.org/10.1108/JPBM-10-2013-0414