Relationship orientation Vs functional cues- a mixed methods study of the factors determining private label brand preferences

Private Label brands (PLBs) are gaining importance in emerging economies' retail industry due to their substantial contribution towards profit margins. Hence, there is an unprecedented need for retailers to understand the key drivers of consumer choice for PLBs amidst prevalence of national brands. The purpose of this research is to investigate how the customers navigate through functional cues (like price, quality and packaging etc.), along with the relationship orientation that drives their purchase intention towards PLBs and National Brands (NBs). The study adopts a mixed method approach with two phases; the first phase a qualitative approach in which 18 in-depth interviews have been conducted with the urban customers who make frequent purchases in retail outlets. The data gathered from the in-depth interviews have been analyzed with the help of NVivo software following grounded theory approach and thematic analysis. The insights obtained from phase I have been subsequently used in phase II for designing attributes and levels for a rating based conjoint analysis of a sample comprising 478 customers from five different Indian cities for the quantitative study. The findings reveal that price is the dominant factor with respect to PLBs and relationship orientation is one of the dominant factors for national brands that drives purchase intention among the consumers. The research extends Fournier's brand relationship spectrum by embedding relationship orientation into a utility-based decision model, allowing emotional bonding to be treated as a measurable competitive lever. This will be facilitating the retailers in repositioning PLBs and design strategies for connecting with the customers emotionally.