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Article
Publication date: 1 August 1995

Diane Halstead and Cheryl B. Ward

Private label brands may be in danger as a result of recent changesin the marketing strategies used by private label firms. The primarycompetitive advantage of private

Abstract

Private label brands may be in danger as a result of recent changes in the marketing strategies used by private label firms. The primary competitive advantage of private label brands, good quality at low prices, may be lost if private label firms continue to modify and expand how their brands are marketed. Specifically, changes in private label brands′ advertising, packaging, sales promotion, and product improvement strategies indicate that private label brands are moving closer than ever to manufacturer brand status. To the extent that these changes result in higher average retail prices and/or lower gross margins for retailers, the advantages of private brands to both consumers and distributors will diminish, illustrating that the historical “wheel of retailing” hypothesis may be applicable to private label brands. Investigates the aforementioned trends and provides suggestions for manufacturers and retailers for future brand management strategies.

Details

Journal of Product & Brand Management, vol. 4 no. 3
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 11 April 2008

J. Tomas Gomez‐Arias and Laurentino Bello‐Acebron

Private labels are gaining increasing importance in many industries. While there are obvious benefits for retailers to embrace private labels, the standard explanations…

Abstract

Purpose

Private labels are gaining increasing importance in many industries. While there are obvious benefits for retailers to embrace private labels, the standard explanations for manufacturers' involvement (idle capacity, buffer against follower brands, retailer's conditions) do not explain it completely. This paper seeks to provide an additional explanation.

Design/methodology/approach

An economic model of vertical differentiation is proposed.

Findings

The model shows that, once the retailer has decided to introduce the private label, and depending on the quality positioning chosen by the retailer, both manufacturers find situations where they are better off by not supplying the store brand and allowing the other manufacturer to produce the private label, but also situations where they prefer to produce the private label. Also, it is shown that retailers will choose the high‐quality manufacturer for its premium store brand, and the low‐quality manufacturer otherwise, and this decision is not based on the set of skills possessed by each manufacturing company.

Originality/value

The model contributes to explaining why private label supply is becoming so pervasive among all kinds of manufacturers under a variety of circumstances.

Details

Journal of Business & Industrial Marketing, vol. 23 no. 4
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 1 September 1991

Katrina Ellis and Mark D. Uncles

The role of private labels in consumer choice isstudied by considering two issues: do privatelabels affect the way people buy within a store,and do they affect the way…

Abstract

The role of private labels in consumer choice is studied by considering two issues: do private labels affect the way people buy within a store, and do they affect the way people choose between stores? The revealed behaviour of consumers is studied, both descriptively and using a very general model of behaviour, the Dirichlet. Some examples are presented which show that within a store, the way consumers buy private labels is similar to the way they buy brands, and that for the buying of a product at different stores, consumers patronise stores with private labels in much the same way as stores without them.

Details

British Food Journal, vol. 93 no. 9
Type: Research Article
ISSN: 0007-070X

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Article
Publication date: 22 April 2020

Natascha Loebnitz, Stephan Zielke and Klaus G. Grunert

This study aims to investigate the impact of social risk and inter-tier brand competition across traditional retailers and discounters on consumers' purchase intentions in the UK.

Abstract

Purpose

This study aims to investigate the impact of social risk and inter-tier brand competition across traditional retailers and discounters on consumers' purchase intentions in the UK.

Design/methodology/approach

The authors conduct a 2 (social risk) × 3 (brand type) × 2 (retailer type) between-subjects design (n = 309; UK) experiment employing a Qualtrics online panel in the UK.

Findings

The study shows that while premium private labels (PPLs) are on par with national brands, discounter's PPLs outperform mainstream retailer's PPLs. Furthermore, consumers appear to purchase standard private labels and PPLs for themselves when shopping at a discounter but turn to national brands when shopping for socially risky situations.

Research limitations/implications

While Tesco's premium (Tesco Finest*) and standard private label (Tesco Everyday Value) explicitly make reference to the retailer's name, for Lidl's premium (Deluxe) and standard private label (e.g. Milbona), the discounter's name is not visible. This is something this study did not control for.

Practical implications

Given that Lidl has opened its first US store in 2017 with ambitious expansion plans, our findings provide in particular practical guidelines for how to promote PPLs in countries where the discounter landscape is less saturated than in Germany.

Originality/value

This study provides insights into the understanding of the influence of social risk on purchasing intentions of premium private labels vs standard private labels vs national brands offered by mainstream retailers or discounters in the UK.

Details

International Journal of Retail & Distribution Management, vol. 48 no. 6
Type: Research Article
ISSN: 0959-0552

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Article
Publication date: 1 March 2011

Michael S. Pepe, Russell Abratt and Paul Dion

The purpose of this study is to investigate the influence of private label resources possessed by a supermarket retailer on the shopping behavior of loyal customers. The…

Abstract

Purpose

The purpose of this study is to investigate the influence of private label resources possessed by a supermarket retailer on the shopping behavior of loyal customers. The study examines whether or not private label products can help in the overall enhancement of product category performance.

Design/methodology/approach

The paper examines the performance of a supermarket retailer in the Northeast United States that operates over 100 stores and generates a total yearly sales volume in excess of $3 billion. Data obtained from the Supermarket's point of sale information were used. The paper then developed a research model from the literature review and used structural equation modeling to analyze the data.

Findings

The findings show that overall dollars spent by loyal customers significantly impacted overall profitability.

Research limitations/implications

The data collected pertained to the supermarket's grocery department that is comprised of center store dry grocery products, frozen food products, and refrigerated dairy products. Perishable departments such as deli, seafood, meat, bakery, floral, general merchandise, health and beauty care, etc. were not researched in this study. Also, data obtained were from one individual supermarket chain.

Practical implications

Although private label products may represent increased profitability for retailers, consumers prefer a full assortment of merchandise; an over emphasis on private label brands may result in diminishing category performance.

Originality/value

The paper examines the performance of a supermarket retailer in the Northeast United States that operates over 100 stores and generates a total yearly sales volume in excess of $3 billion. The use of scanner data has value as it measures actual shopping behavior.

Details

Journal of Product & Brand Management, vol. 20 no. 1
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 7 September 2010

Murat Hakan Altıntaş, Serkan Kılıç, Gokhan Senol and Feride Bahar Isin

The purpose of this paper is to determine which strategic objective factors have significant effects on competitive advantage of private label manufacturers in Turkey.

Abstract

Purpose

The purpose of this paper is to determine which strategic objective factors have significant effects on competitive advantage of private label manufacturers in Turkey.

Design/methodology/approach

A study was conducted of 90 Turkish private label manufacturers. A web‐based questionnaire was the chosen method.

Findings

Three strategic objective factors were found to have an effect on competitive advantage: production efficiency, market embeddedness and product selling control.

Research limitations/implications

A comparative analysis between retailers and manufacturers of private labels was regarded as necessary to learn about their perspectives regarding competition. The large sample size encouraged confident generalization of the findings. Another limitation was only analyzing data from a country that has a low private label market share.

Practical implications

The findings of this paper offer valuable insights to retailers, national brand manufacturers and private label manufacturers, enabling them to learn the triggers for product manufacturing from the perspective of private label manufacturers.

Originality/value

It is hoped that this paper will reveal some valuable perspectives from an emerging private label market.

Details

International Journal of Retail & Distribution Management, vol. 38 no. 10
Type: Research Article
ISSN: 0959-0552

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Article
Publication date: 2 October 2017

Catherine Sutton-Brady, Tom Taylor and Patty Kamvounias

The Australian supermarket industry has long been dominated by two players – Coles and Woolworths. Most recently this dominance has increased significantly and the “Big 2”…

Abstract

Purpose

The Australian supermarket industry has long been dominated by two players – Coles and Woolworths. Most recently this dominance has increased significantly and the “Big 2” have used their power more effectively and have introduced an ever-increasing number of “private label” products on supermarket shelves. This study aims to investigate the effect these products have had on the relationship between the supermarkets (buyers) and their suppliers.

Design/methodology/approach

This qualitative study used in-depth, high engagement interviews with a range of suppliers. An extensive data analysis process was carried out to ensure the coding of the key insights into themes, which helped to answer the aims and objectives of the research.

Findings

A key contribution of this study has been to highlight the ability of supermarket chains to increase existing dominance by using their ever-increasing private label brand portfolio. The findings indicate an uncertain future for food suppliers, with the situation likely to continue to worsen further as the supermarkets continue to exercise and abuse their power.

Originality/value

This paper’s main contribution lies in providing a greater understanding of the significance of the effect of private labels on relationships and the implications of these effects. The impact of the supermarket dominance on innovation is especially interesting, given that this has not been previously discussed in the literature. Additionally, the deterioration in trust is significant in this context and to an extent that is rarely seen.

Details

Journal of Business & Industrial Marketing, vol. 32 no. 8
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 25 September 2007

Julian Ming‐Sung Cheng, Lily Shui‐Lien Chen, Julia Ying‐Chao Lin and Edward Shih‐Tse Wang

This research attempts to investigate the differences of consumer perceptions on product quality, price, brand leadership and brand personality among national brands…

Abstract

Purpose

This research attempts to investigate the differences of consumer perceptions on product quality, price, brand leadership and brand personality among national brands, international private labels and local private labels. It aims to use product categories as the moderator of the preceding perceptions.

Design/methodology/approach

Data were collected outside the entrances of the main rail station of Taipei, Taiwan. A systematic sampling was adopted and 254 questionnaires were eventually collected.

Findings

The findings revealed that on the whole national brands were perceived as significantly superior to international private labels, while international private labels were perceived as being superior to local private labels in terms of all perceptions except price perception. The findings also revealed that product categories moderated price and brand personality perceptions across the three brand types, while product categories failed to moderate the effect of the three brands types on quality and brand leadership perceptions.

Originality/value

This research represents one of the few pioneer works that empirically investigate the aforementioned issues.

Details

Journal of Product & Brand Management, vol. 16 no. 6
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 2 February 2015

Cristina Calvo Porral and Mark F Lang

In today’s highly competitive consumer marketplace, developing and managing successful private label offerings has become a priority for many retailing companies. The…

Abstract

Purpose

In today’s highly competitive consumer marketplace, developing and managing successful private label offerings has become a priority for many retailing companies. The purpose of this paper is to analyze product, retailer, and individual factors from the private label brand that influence consumers’ loyalty and purchase intention; along with the influence of the manufacturer identification on the product package on purchase intention.

Design/methodology/approach

A structural equation model is run on a sample of 362 consumers, and a multi-group comparison is developed to study the role of manufacturer identification.

Findings

Findings indicate that the influence of private label image and perceived quality on purchase intention are partially mediated by loyalty and moderated by manufacturer identification. Results also reveal that store image and corporate reputation enhance private label image and perceived quality.

Originality/value

This study provides useful insights to advance the understanding of private label branding and guidance to retailers who should consider store image and company reputation when designing branding strategies.

Details

British Food Journal, vol. 117 no. 2
Type: Research Article
ISSN: 0007-070X

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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…

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

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