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Are consumers more loyal to national brands than to private labels?

Author

Listed:
  • Fabian Berges

    (GREMAQ - Groupe de recherche en économie mathématique et quantitative - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique, IDEI - Institut d'Economie Industrielle - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse)

  • Sylvette Monier Dilhan

    (GREMAQ - Groupe de recherche en économie mathématique et quantitative - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique)

  • Daniel Hassan

    (GREMAQ - Groupe de recherche en économie mathématique et quantitative - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique)

Abstract

The evolution of private labels (PLs) can be understood in terms of a strategy adopted by the retail industry with the aim of competing with national brands (NBs). In the 1990s, this strategy led to the development of ‘me too' products, which currently represent the largest share of store brand products. Since the early 2000s, retailers have widened the range of their store brands by introducing high-quality products. The aim of this study was to estimate consumers' attachment to ‘me-too' and niche PLs respectively, as compared to NBs. We captured the degree of maturity of these PLs through their price-elasticities, computed for three staple goods offered by three mass retail companies. It was found that price sensitivity does not differ much between the ‘me-too' PLs and the corresponding NBs. This result confirms that ‘me-too' products are now considered reliable quality brands. However, in the high quality segment, consumers remain more sensitive to the price of PLs than to that of NBs, a characteristic which may relate to their recent introduction on the market.

Suggested Citation

  • Fabian Berges & Sylvette Monier Dilhan & Daniel Hassan, 2013. "Are consumers more loyal to national brands than to private labels?," Post-Print hal-02647680, HAL.
    • Handle: RePEc:hal:journl:hal-02647680
    DOI: 10.1111/j.1467-8586.2012.00459.x
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    Cited by:

    1. Jayakrishnan, S. & Rekha, D. Chikhalkar & Ranjan Chaudhuri, 2016. "Measuring factors determining private label purchase," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 6(2), pages 42-58, February.
    2. Fares, M’hand & Raza, Saqlain & Thomas, Alban, 2018. "Is there complementarity between labels and brands? Evidence from small French co-operatives," TSE Working Papers 18-895, Toulouse School of Economics (TSE).
    3. Teresa Taranko, 2016. "Consumer Attitudes Towards Manufacturer Brands and Own Label Brands – The Case of the Chocolate Market in Poland (Postawy konsumentow wobec marek producentow i marek wlasnych detalistow na rynku czeko," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 14(57), pages 119-137.

    More about this item

    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

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