IDEAS home Printed from https://ideas.repec.org/a/eee/joreco/v20y2013i1p80-86.html
   My bibliography  Save this article

The value of private label brands to U.S. consumers: An objective and subjective assessment

Author

Listed:
  • Boyle, Peter J.
  • Lathrop, E. Scott

Abstract

This study investigates the value of private label brands to consumers using two approaches: First, subjective evaluations of the perceived relationships between price and quality for private label (PL) brand and national brand (NB) products based on survey responses; and second, objective measures of price and quality for PLs and NBs widely available in the U.S. Price was generally perceived to be a signal of quality for NBs, but not for PLs, an indication that consumers' knowledge may not have kept pace with quality improvement in PLs. Objective estimation of the quality gap potentially existing between PLs and NBs determined that the “quality premium†of NBs observed in the past has largely disappeared. Consumers, notwithstanding, sought a lower purchase price for PLs. In turn, the higher price they were willing to pay for NBs accorded with estimates of the actual “price premium†associated with NBs.

Suggested Citation

  • Boyle, Peter J. & Lathrop, E. Scott, 2013. "The value of private label brands to U.S. consumers: An objective and subjective assessment," Journal of Retailing and Consumer Services, Elsevier, vol. 20(1), pages 80-86.
  • Handle: RePEc:eee:joreco:v:20:y:2013:i:1:p:80-86
    DOI: 10.1016/j.jretconser.2012.10.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969698912001282
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jretconser.2012.10.008?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Connor, John M & Peterson, Everett B, 1992. "Market-Structure Determinants of National Brand-Private Label Price Differences of Manufactured Food Products," Journal of Industrial Economics, Wiley Blackwell, vol. 40(2), pages 157-171, June.
    2. Gilles Paché, 2007. "Private Label Development: The Large Food Retailer Faced with the Supplier's Opportunism," The Service Industries Journal, Taylor & Francis Journals, vol. 27(2), pages 175-188, March.
    3. Krueckeberg, Harry F. & Hamilton, John R., 1981. "Consumer Perceptions Of National, Generic, And Private Brand Grocery Products," Journal of Food Distribution Research, Food Distribution Research Society, vol. 12(1), pages 1-9, February.
    4. Robert L. Steiner, 2004. "The Nature and Benefits of National Brand/Private Label Competition," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 24(2), pages 105-127, March.
    5. Erich Kirchler & Florian Fischer & Erik Hölzl, 2010. "Price and its Relation to Objective and Subjective Product Quality: Evidence from the Austrian Market," Journal of Consumer Policy, Springer, vol. 33(3), pages 275-286, September.
    6. Christophe Bontemps & Valérie Orozco & Vincent Réquillart, 2008. "Private Labels, National Brands and Food Prices," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 33(1), pages 1-22, August.
    7. Anselmsson, Johan & Johansson, Ulf & Marañon, Antonio & Persson, Niklas, 2008. "The penetration of retailer brands and the impact on consumer prices—A study based on household expenditures for 35 grocery categories," Journal of Retailing and Consumer Services, Elsevier, vol. 15(1), pages 42-51.
    8. Steven Salop & Joseph Stiglitz, 1977. "Bargains and Ripoffs: A Model of Monopolistically Competitive Price Dispersion," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 44(3), pages 493-510.
    9. Franziska Völckner & Julian Hofmann, 2007. "The price-perceived quality relationship: A meta-analytic review and assessment of its determinants," Marketing Letters, Springer, vol. 18(3), pages 181-196, September.
    10. Gerard J. Tellis & Birger Wernerfelt, 1987. "Competitive Price and Quality Under Asymmetric Information," Marketing Science, INFORMS, vol. 6(3), pages 240-253.
    11. Heiner Imkamp, 2008. "A New Look at Old Coefficients," Journal of Consumer Policy, Springer, vol. 31(2), pages 139-145, June.
    12. Méndez, José Luis & Oubiña, Javier & Rubio, Natalia, 2008. "Expert quality evaluation and price of store vs. manufacturer brands: An analysis of the Spanish mass market," Journal of Retailing and Consumer Services, Elsevier, vol. 15(3), pages 144-155.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ahmet Tuz & Begum Sertyesilisik, 2020. "Finding and Minding the Gaps in State-Of-The-Art Lean and Green Marketing in the Construction Industry," Tržište/Market, Faculty of Economics and Business, University of Zagreb, vol. 32(2), pages 187-203.
    2. Larson, Ronald B., 2016. "Profiling Private-Label Avoiders," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235823, Agricultural and Applied Economics Association.
    3. Rossi, Patricia & Borges, Adilson & Bakpayev, Marat, 2015. "Private labels versus national brands: The effects of branding on sensory perceptions and purchase intentions," Journal of Retailing and Consumer Services, Elsevier, vol. 27(C), pages 74-79.
    4. Andreas Niedermeier & Agnes Emberger‐Klein & Klaus Menrad, 2021. "Which factors distinguish the different consumer segments of green fast‐moving consumer goods in Germany?," Business Strategy and the Environment, Wiley Blackwell, vol. 30(4), pages 1823-1838, May.
    5. Garrido-Morgado, à lvaro & González-Benito, Óscar, 2024. "Applying the triple coherence line to in-store marketing plans to increase private label market share," Journal of Retailing and Consumer Services, Elsevier, vol. 77(C).
    6. Hoskins, Jake D., 2016. "Offering value and capturing surplus: A strategy for private label sales in a new customer loyalty building scenario," Journal of Retailing and Consumer Services, Elsevier, vol. 28(C), pages 274-280.
    7. Jasper Grashuis & Alexandre Magnier, 2018. "Product differentiation by marketing and processing cooperatives: A choice experiment with cheese and cereal products," Agribusiness, John Wiley & Sons, Ltd., vol. 34(4), pages 813-830, October.
    8. Paul W. Dobson & Ratula Chakraborty, 2014. "How Do National Brands And Store Brands Compete?," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2014-07, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    9. Rezaei, Sajad, 2015. "Segmenting consumer decision-making styles (CDMS) toward marketing practice: A partial least squares (PLS) path modeling approach," Journal of Retailing and Consumer Services, Elsevier, vol. 22(C), pages 1-15.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Meilin Ma & Ralph Siebert, 2021. "The Impact of Private Label Introduction on Assortment, Prices, and Profits of Retailers," CESifo Working Paper Series 9380, CESifo.
    2. Heiner Imkamp, 2018. "Should Prices of Consumer Goods Be Better Indicators of Product Quality?," Journal of Consumer Policy, Springer, vol. 41(1), pages 77-81, March.
    3. Erich Kirchler & Florian Fischer & Erik Hölzl, 2010. "Price and its Relation to Objective and Subjective Product Quality: Evidence from the Austrian Market," Journal of Consumer Policy, Springer, vol. 33(3), pages 275-286, September.
    4. Fornari, Edoardo & Fornari, Daniele & Grandi, Sebastiano & Menegatti, Mario, 2013. "The influence of retailing-mix levers on private label market share: The case of the Italian FMCG market," Journal of Retailing and Consumer Services, Elsevier, vol. 20(6), pages 617-624.
    5. Andreas Niedermeier & Agnes Emberger‐Klein & Klaus Menrad, 2021. "Which factors distinguish the different consumer segments of green fast‐moving consumer goods in Germany?," Business Strategy and the Environment, Wiley Blackwell, vol. 30(4), pages 1823-1838, May.
    6. Pritha Ghosh & Subrata Saha & Shamindra Nath Sanyal & Swati Mukherjee, 2021. "Positioning of private label brands of men’s apparel against national brands," Journal of Marketing Analytics, Palgrave Macmillan, vol. 9(3), pages 210-227, September.
    7. Volpe, Richard J., III, 2011. "Evaluating the Performance of U.S. Supermarkets: Pricing Strategies, Competition from Hypermarkets, and Private Labels," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(3), pages 1-16, December.
    8. Bocionek, Milena & Anders, Sven M., 2012. "Estimating Price Rigidity in Vertically Differentiated Food Product Categories with Private Labels," Staff Paper Series 139931, University of Alberta, Department of Resource Economics and Environmental Sociology.
    9. Balagtas, Joseph Valdes & Binkley, James K. & Volpe, Richard & Young, Jeffrey S., 2014. "Competition between Private Labels and National Brands: a Simple Econometric Test and Application to Dairy Markets," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170544, Agricultural and Applied Economics Association.
    10. Olbrich, Rainer & Jansen, Hans Christian & Hundt, Michael, 2017. "Effects of pricing strategies and product quality on private label and national brand performance," Journal of Retailing and Consumer Services, Elsevier, vol. 34(C), pages 294-301.
    11. Choi, Sungchul & Fredj, Karima, 2013. "Price competition and store competition: Store brands vs. national brand," European Journal of Operational Research, Elsevier, vol. 225(1), pages 166-178.
    12. Lu, Qiang (Steven) & Yang, Yupin & Yuksel, Ulku, 2015. "The impact of a new online channel: An empirical study," Annals of Tourism Research, Elsevier, vol. 54(C), pages 136-155.
    13. Schnittka, Oliver, 2015. "Are they always promising? An empirical analysis of moderators influencing consumer preferences for economy and premium private labels," Journal of Retailing and Consumer Services, Elsevier, vol. 24(C), pages 94-99.
    14. Anania, Giovanni & Nisticò, Rosanna, 2014. "Price dispersion and seller heterogeneity in retail food markets," Food Policy, Elsevier, vol. 44(C), pages 190-201.
    15. MANEZ, Juan A. & MONER-COLONQUES, Rafael & SEMPERE-MONERRIS, José J. & URBANO, Amparo, 2011. "Price differentials among brands in retail distribution: product quality and service quality," LIDAM Discussion Papers CORE 2011017, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    16. Liljander, Veronica & Polsa, Pia & van Riel, Allard, 2009. "Modelling consumer responses to an apparel store brand: Store image as a risk reducer," Journal of Retailing and Consumer Services, Elsevier, vol. 16(4), pages 281-290.
    17. Raj Sethuraman, 2009. "Assessing the External Validity of Analytical Results from National Brand and Store Brand Competition Models," Marketing Science, INFORMS, vol. 28(4), pages 759-781, 07-08.
    18. Juan A. Mañez & Rafael Moner Colonques & Jose J. Sempere-Monerris & Amparo Urbano, 2016. "Brand price differentials in retail distribution: product quality and service quality," Applied Economics, Taylor & Francis Journals, vol. 48(59), pages 5749-5760, December.
    19. Olbrich, Rainer & Grewe, Gundula, 2013. "Proliferation of private labels in the groceries sector: The impact on category performance," Journal of Retailing and Consumer Services, Elsevier, vol. 20(2), pages 147-153.
    20. Villas-Boas, J Miguel, 1995. "Models of Competitive Price Promotions: Some Empirical Evidence from the Coffee and Saltine Crackers Markets," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(1), pages 85-107, Spring.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joreco:v:20:y:2013:i:1:p:80-86. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-retailing-and-consumer-services .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.