Understanding Behviour of Consumers Towards Private Labels in Indian Retail

Topics: Private label, Brand, Branding Pages: 17 (5794 words) Published: February 26, 2013
Assistant Professor, Accurate Institute of Management & Technology, Greater Noida, Uttar Pradesh, INDIA @
The behaviour of consumers towards private labels is changing drastically, personality plays an important role in this change, in recent years, the quality of private label products and their market shares have grown to such an extent that most consumer goods manufacturers and retailers cannot afford to ignore them. The behviour is dependendent on the personality trait, whether the consumer is inner directed or outer directed. Outer directed consumers are achievement oriented, and emulate others with whom they identify in some manner. Inner directed are concerned with getting the maximum out of any investment, hence heavy private label purchasers, as they see the private labels as value for money what consumers think about private labels It all depends on consumer perception and attitude towards emerging private labels. We carried out a survey of 126 respondents who are aware of private labels. The results showed that perception, education, income, family size, occupation, marital status, earning members in the family and family size significantly influence their behaviour towards private labels. Our study provides insights to the buyer behaviour in the Indian retail context.

Personality, Demographic Characteristics, Inner directed, Indian Retail, Private Label, Perception.

The changing consumer taste and preference, increasing disposable income and the propensity to spend are some of the factors affecting the changes in the retail scenario in India The retailing sector in India has undergone significant transformation in the past 10 years. The retail business, in India, is estimated to grow from13 per cent per annum from US$ 322 billion in 2006-07 to US$ 590 billion in 2011-12. The unorganized retail sector is expected to grow at about 10 per cent per annum from US$ 309 billion 2006-07 to US$ 496 billion in 2013-14. Organized retail which now constitutes a small four per cent of retail sector in 2006-07 is likely to grow at 45-50 per cent per annum and quadruple its share of total retail trade to 16 per cent by 2013-14.

For the current generation of consumers, the meaning of shopping has changed. It is not just a mere necessity, as it was earlier, but much more than that. The factors that affect store choice and draw customers to the shopping centre include space, ambience, and convenience and moreover an array of choice under one roof. The growth of integrated shopping malls, retail chains and multi-brand outlets is evidence of consumer behaviour being favourable to the growing organized segment of the business. Space, ambience and convenience are beginning to play an important role in drawing customers. The consumer decision-making process is a complex phenomenon. The purchase of goods or services includes a number of factors that could affect each decision. Decision making is more complex and even more important for consumers today than in the past.

Private label products have become a global phenomenon and are of increasing interest to practitioners and academics alike. Private labels have gained a sizeable share of global grocery sales and further growth is predicted for the future (Ailawadi et al. 2008). These brands, owned and controlled by retailers, have become a significant threat to national brand manufacturers as the quality gap between the two closes (Herstein and Gamliel 2004). From the retailer‘s perspective, private labels are seen as a strategy to improve profitability and store image (Quelch and Harding 1996). The image of a store in turn is regarded as critical to retail success given the impact it is considered to have on store patronage, loyalty and profitability (Hansen and Solgaard 2004). According to...
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