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Article
Publication date: 7 September 2015

Kandapa Thanasuta and Pinrada Metharom

The purpose of this paper is to investigate the direct and indirect relationships between brands’ marketing activities and consumers’ willingness to pay (WTP) for private labels…

1596

Abstract

Purpose

The purpose of this paper is to investigate the direct and indirect relationships between brands’ marketing activities and consumers’ willingness to pay (WTP) for private labels (PLs) through the effect of perceived quality in different cultural contexts. This paper also provides a broader perspective by incorporating the effect of branding strategy on such relationships.

Design/methodology/approach

Thailand is the studied market. In all, 819 respondents evaluated two PLs through mall interception in a leading supermarket in Bangkok. A structural equation model is used to evaluate the relationships among the constructs.

Findings

The results demonstrate that sales promotions directly and indirectly influence WTP, whereas only an indirect relationship through perceived quality exists for the similarity of PL and national-brand packaging. The strength of sales promotions and the perceived quality relationship is significantly stronger for “other-name” PL than for “own-name” one. Perceived quality contributes as the factor with the most influence on WTP.

Research limitations/implications

PLs should continue to invest in package improvement to increase their perceived quality. The brand must carefully choose which promotional tools to implement because such tools have both positive and negative impacts. Promotions from “other-name” brands should be emphasized because they have a stronger, more positive effect on perceived quality.

Originality/value

This paper’s contribution is its attempt to identify the reciprocal influence of WTP on PLs, which previously has been studied only as it relates to national brands. The moderating role of branding is introduced to offer insights into the influencing factors.

Details

Asia-Pacific Journal of Business Administration, vol. 7 no. 3
Type: Research Article
ISSN: 1757-4323

Keywords

Article
Publication date: 19 January 2015

Kandapa Thanasuta

Private label brands have achieved double-digit growth in the Thai market. To expand market share, private label brands need to identify clearly what triggers consumer purchases…

5996

Abstract

Purpose

Private label brands have achieved double-digit growth in the Thai market. To expand market share, private label brands need to identify clearly what triggers consumer purchases. The purpose of this paper is to investigate the relationship between consumer decision-making styles and actual purchases of private label products in a Thai market context, using price consciousness, quality consciousness, brand consciousness, value consciousness, and risk perception as factors for investigation.

Design/methodology/approach

Responses from a total of 240 respondents from four product categories were collected through mall intercepts in five hypermarkets and supermarkets in Bangkok, and a regression-based model was employed to identify the associations.

Findings

The results indicate a significant relationship between price-conscious and brand-conscious consumers, and private label purchases and show that the relationship between quality-conscious, value-conscious, and risk-adverse consumers and private label purchases is insignificant. It concludes that price-conscious consumers are the ones most likely to purchase private label products in low-differentiation categories. An opposite relationship prevails for consumers who are brand conscious in low-differentiation, high-risk, and low-risk categories.

Research limitations/implications

The outcomes of this research suggest that private label brands should maintain a low-price strategy while striving for continuous improvement in quality to capture additional quality- and value-conscious consumers. It also suggests that national brands invest in brand-building strategies rather than competing on price.

Originality/value

This study enhances an understanding of consumer decision-making characteristics for actual private label purchases rather than the intention to purchase and is useful in suggesting an alternative to socio-economic factors as a method of identifying private label purchasers.

Details

International Journal of Emerging Markets, vol. 10 no. 1
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 3 July 2009

Kandapa Thanasuta, Thanyawee Patoomsuwan, Vanvisa Chaimahawong and Yingyot Chiaravutthi

The purpose of this paper is to quantify the value of brands and countries of origin in monetary units. The automobile industry in Thailand is chosen because of the variety of…

10047

Abstract

Purpose

The purpose of this paper is to quantify the value of brands and countries of origin in monetary units. The automobile industry in Thailand is chosen because of the variety of brands and the intense competition within the industry. Both the pick up truck and passenger car market shares have been dominated by Japanese brands for decades, whilst the luxury market has been dominated by German brands.

Design/methodology/approach

The data are collected from an authors' survey carried out during the “Thailand International Motor Expo 2007”. A total of 244 models are chosen from 20 brands, and from 7 countries of origin. The hedonic price model is applied to ascertain the price premiums of these different brands, taking into account their countries of origin, since each automobile brand offers several models with distinguishably different features.

Findings

The results indicate that different brand names affect consumers' “Willingness to Pay,” in which Mercedes, BMW, and Audi brands are ranked the highest. Surprisingly, Subaru, Mitsubishi and Toyota are the only Japanese brands to have significant brand values. The findings also illustrate a direct relationship between market acceptance and the price premium for automobiles in the luxury car segment, however the same relationship does not hold true for the cars in economy car segment. It seems that Thai consumers put the highest value on cars from Germany, whilst cars from Japan and the USA possess approximately the same value. Korean and Malaysian cars, which focus on low‐prices as a means to obtain a competitive advantage, are as to be expected ranked last. An association was found between countries' GDP per capita and the price premium. Countries with a lower GDP per capita show lower price premiums and vise versa. The exception is Germany, which has a low GDP per capita yet has a higher price premium than the better ranked GDP countries such as the USA

Research limitations/implications

Though the German brands are ranked the highest, competition in the car industry is likely to be intense, since their premiums are not noticeably different. Additionally, there are implications regarding entry barriers for new automobile brands from the same or different countries. These entry barriers are considered to be quite high, as the brand premiums could represent more than 25 percent of the car prices, at least for the compact car segment. A strategy of discounted price penetration is therefore recommended for a brand which is new to the market, and which does not originate from a highly regarded country. For existing brands with below average values, a customer‐based approach is recommended in which those brands improve the attributes in order to create higher premiums.

Originality/value

In addition to confirming the relationship between the price premiums of brands and their countries of origin, this paper successfully provides valuations in monetary units and rankings accordingly. This research could be useful to both incumbents and new entrants, when designing their pricing strategies.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 21 no. 3
Type: Research Article
ISSN: 1355-5855

Keywords

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