Consumers' Decision between Private Labels and National Brands in a Retailer's Store: A Mixed Multinomial Logit Application
AbstractWe propose to analyze the determinants of consumers' brand decision within a retailer store using a multinomial mixed logit approach. For the consumers' choice, national brands compete with private labels (both me-too product and high quality store brand). We first find that the standard private label (me-too), independently of the price effect, performs better than all national brands in terms of consumers' utility. Second, the high-quality private label does not reach its target yet in term of consumers' acceptance due to a poor product characteristics perception. Last, it appears that households' objective socioeconomic variables (income, education and household size) do not play any role in private label perception, whereas objective consumption behaviour (store loyalty) clearly favours store brand perception. We find that consumers have a lower private label demand elasticity than the low store loyal ones.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 103rd Seminar, April 23-25, 2007, Barcelona, Spain with number 9407.
Date of creation: 2007
Date of revision:
Brands; consumers' choice; mixed logit model; willingness to pay.; Consumer/Household Economics; D12; L81; Q13;
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
- Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- André Bonfrer & Pradeep K. Chintagunta, 2004. "Store Brands: Who Buys Them and What Happens to Retail Prices When They Are Introduced?," Review of Industrial Organization, Springer, vol. 24(2), pages 195-218, 03.
- Bergès, Fabian & Bouamra-Mechemache, Zohra, 2009.
"Is Producing a Private Label Counterproductive for a Branded Manufacturer?,"
TSE Working Papers
09-130, Toulouse School of Economics (TSE).
- Fabian Berg�s & Zohra Bouamra-Mechemache, 2012. "Is producing a private label counterproductive for a branded manufacturer?," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 39(2), pages 213-239, April.
- Bergès, Fabian & Bouamra-Mechemache, Zohra, 2011. "Is Producing a Private Label Counterproductive for a Branded Manufacturer?," Open Access publications from University of Toulouse 1 Capitole http://neeo.univ-tlse1.fr, University of Toulouse 1 Capitole.
- Bergès, Fabian & Monier-Dilhan, Sylvette, 2012. "Mass Retailers’ Advertising Strategies Faced with Different Competitor Store Formats: Commodity Stores or Hard Discounts," TSE Working Papers 12-277, Toulouse School of Economics (TSE).
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