Purpose – The objective of this study is threefold. First, the authors want to use taste tests to assess how four store brands that are differently positioned compare to one national brand in terms of perceived brand equity. Second, the authors want to investigate whether brand equity of store versus national brands is determined by current brand loyalty towards these brands. Third, they want to find out whether store patronage has an influence on perceived brand equity of store versus national brands. Design/methodology/approach – A total of 225 consumers were involved in a repeated measures design involving two within-subject factors: a blind and non-blind taste test of five orange juice brands. Across our three objectives, we describe the impact of the retailers’ positioning strategies on the results generated.
Findings – The results confirm the common belief that private label products can offer the same or even better quality than national brands, but at a lower price.
Originality/value – Until now, hardly any study incorporates the differences in positioning objectives of retailers and national brand manufacturers. Nevertheless, as is true for any brand, positioning of a store brand can exert an important influence on its performance. Keywords Brand loyalty, Stores and supermarkets, Brand equity Paper type Research paper
An executive summary for managers and executive
readers can be found at the end of this article.
Store or retailer brands have made significant inroads into the packaged goods market in the 1980s and 1990s with the
average market share of store brands increasing from 15.3
percent in 1988 to 20 percent in 1998 (Corstjens and Lal,
2000; Dunne and Narasimhan, 1999; Hoch, 1996).
According to Quelch and Harding (1996), there are more
private labels – “store brand” goods – on the market than ever before. Especially in Europe, store brand penetration is extremely large, with Belgium occupying a third place after
UK and Switzerland with a store brand market share of more
than 40 percent since 2001 (Fitzell, 1992; Hoch, 1996; Van
Ossel and Versteylen, 2002).
Retailer brands have clearly evolved throughout time.
According to Dunne and Narasimhan (1999), private labels
are no longer simply category killers. In fact, they now play a range of roles, with different implications for manufacturers and retailers alike. Burt (2000) indicates that the typical
brand product range of the late 1970s and early 1980s
comprised a three-tier structure of leading manufacturer
brands, seen as the high-quality/high-price alternative; retailer brands, generally positioned as a mid-quality/mid-price
alternative; and a “generic” range offering acceptable quality for a low price. He argues that there is an evolution from
private labels offering the consumer a lower quality product alternative for a lower price, to retail brands offering a true quality brand alternative, reflecting the application of a clear marketing approach in the retail environment. Effective
marketing of store brands can create a captive clientele and make the chain less vulnerable to price pressures or aggressive attacks by the competition (Dick et al., 1995). Several real-life examples illustrate that this new type of retailer brand is
clearly gaining ground. One example is the success of the
private label “President’s Choice” of Loblaws, the largest Canadian grocery chain, showing that premium private labels
are viable and that they can be a major competitive force in the consumer goods industry (Dunne and Narasimhan,
In spite of the emergence and growing importance of store
brands, most previous conceptual and empirical research has
been focused on national brands (Steenkamp and Dekimpe,
1997). Although store brand mechanisms have often been
discussed in the business press, only recently have they been systematically investigated in...