IDEAS home Printed from https://ideas.repec.org/a/eee/joreco/v31y2016icp109-116.html
   My bibliography  Save this article

Will they return? Getting private label consumers to come back: Price, promotion, and new product effects

Author

Listed:
  • Abril, Carmen
  • Sanchez, Joaquin

Abstract

Using a hazard model specification with two years of consumer panel data, this study simultaneously quantifies the effects of price gaps, non-monetary promotions, and new products on consumer switching from private labels back to manufacturer brands. The research focuses on the switching phenomena, rather than choice, such that time is a relevant variable. According to the results, non-monetary promotions and new products are more effective for recovering consumers than price gap reductions. These findings underscore the importance of understanding how consumers perceive the value of manufacturer brands.

Suggested Citation

  • Abril, Carmen & Sanchez, Joaquin, 2016. "Will they return? Getting private label consumers to come back: Price, promotion, and new product effects," Journal of Retailing and Consumer Services, Elsevier, vol. 31(C), pages 109-116.
    • Handle: RePEc:eee:joreco:v:31:y:2016:i:c:p:109-116
    DOI: 10.1016/j.jretconser.2016.03.010
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S096969891630128X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jretconser.2016.03.010?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. Cotterill, Ronald W & Putsis, William P, Jr & Dhar, Ravi, 2000. "Assessing the Competitive Interaction between Private Labels and National Brands," The Journal of Business, University of Chicago Press, vol. 73(1), pages 109-137, January.
    2. Robert C. Blattberg & Richard Briesch & Edward J. Fox, 1995. "How Promotions Work," Marketing Science, INFORMS, vol. 14(3_supplem), pages 122-132.
    3. Dipak C. Jain & Naufel J. Vilcassim, 1991. "Investigating Household Purchase Timing Decisions: A Conditional Hazard Function Approach," Marketing Science, INFORMS, vol. 10(1), pages 1-23.
    4. Jie Zhang, 2006. "An Integrated Choice Model Incorporating Alternative Mechanisms for Consumers' Reactions to In-Store Display and Feature Advertising," Marketing Science, INFORMS, vol. 25(3), pages 278-290, 05-06.
    5. Myungsup Kim & Yangseon Kim & Peter Schmidt, 2007. "On the accuracy of bootstrap confidence intervals for efficiency levels in stochastic frontier models with panel data," Journal of Productivity Analysis, Springer, vol. 28(3), pages 165-181, December.
    6. Jan-Benedict E. M. Steenkamp & Inge Geyskens, 2014. "Manufacturer and Retailer Strategies to Impact Store Brand Share: Global Integration, Local Adaptation, and Worldwide Learning," Marketing Science, INFORMS, vol. 33(1), pages 6-26, January.
    7. Roberto G. Gutierrez, 2002. "Parametric frailty and shared frailty survival models," Stata Journal, StataCorp LP, vol. 2(1), pages 22-44, February.
    8. 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.
    9. van Heerde, H.J. & Gupta, S. & Wittink, D.R., 2003. "Is 3/4 of the Sales Promotion Bump Due to Brand Switching? No it is 1/3," Discussion Paper 2003-5, Tilburg University, Center for Economic Research.
    10. Serdar Sayman & Stephen J. Hoch & Jagmohan S. Raju, 2002. "Positioning of Store Brands," Marketing Science, INFORMS, vol. 21(4), pages 378-397, June.
    11. Kristiaan Helsen & David C. Schmittlein, 1993. "Analyzing Duration Times in Marketing: Evidence for the Effectiveness of Hazard Rate Models," Marketing Science, INFORMS, vol. 12(4), pages 395-414.
    12. Rajiv Lal, 1990. "Price Promotions: Limiting Competitive Encroachment," Marketing Science, INFORMS, vol. 9(3), pages 247-262.
    13. Ian Sinapuelas & William Robinson, 2009. "Entry for supermarket feature me-too brands: An empirical explanation of incidence and timing," Marketing Letters, Springer, vol. 20(2), pages 183-196, June.
    14. 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.
    15. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    16. Peter T. L. Popkowski Leszczyc & Frank M. Bass, 1998. "Determining the effects of observed and unobserved heterogeneity on consumer brand choice," Applied Stochastic Models and Data Analysis, John Wiley & Sons, vol. 14(2), pages 95-115, June.
    17. Van den Poel, Dirk & Lariviere, Bart, 2004. "Customer attrition analysis for financial services using proportional hazard models," European Journal of Operational Research, Elsevier, vol. 157(1), pages 196-217, August.
    18. Sloot, Laurens M. & Verhoef, Peter C., 2008. "The Impact of Brand Delisting on Store Switching and Brand Switching Intentions," Journal of Retailing, Elsevier, vol. 84(3), pages 281-296.
    19. Ronald Cotterill & William Putsis, 2000. "Market Share and Price Setting Behavior for Private Labels and National Brands," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 17(1), pages 17-39, August.
    20. Greg M. Allenby & Peter E. Rossi, 1991. "Quality Perceptions and Asymmetric Switching Between Brands," Marketing Science, INFORMS, vol. 10(3), pages 185-204.
    21. Shuba Srinivasan & Koen Pauwels & Dominique M. Hanssens & Marnik G. Dekimpe, 2004. "Do Promotions Benefit Manufacturers, Retailers, or Both?," Management Science, INFORMS, vol. 50(5), pages 617-629, May.
    22. Steenkamp, Jan-Benedict E M & Gielens, Katrijn, 2003. "Consumer and Market Drivers of the Trial Probability of New Consumer Packaged Goods," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 30(3), pages 368-384, December.
    23. Bart J. Bronnenberg & Luc Wathieu, 1996. "Asymmetric Promotion Effects and Brand Positioning," Marketing Science, INFORMS, vol. 15(4), pages 379-394.
    24. Sanjay K. Dhar & Stephen J. Hoch, 1997. "Why Store Brand Penetration Varies by Retailer," Marketing Science, INFORMS, vol. 16(3), pages 208-227.
    25. Aalen, Odd O. & Hjort, Nils Lid, 2002. "Frailty models that yield proportional hazards," Statistics & Probability Letters, Elsevier, vol. 58(4), pages 335-342, July.
    26. Sethuraman, Raj & Gielens, Katrijn, 2014. "Determinants of Store Brand Share," Journal of Retailing, Elsevier, vol. 90(2), pages 141-153.
    27. Nenycz-Thiel, Magda & Sharp, Byron & Dawes, John & Romaniuk, Jenni, 2010. "Competition for memory retrieval between private label and national brands," Journal of Business Research, Elsevier, vol. 63(11), pages 1142-1147, November.
    28. Robert C. Blattberg & Kenneth J. Wisniewski, 1989. "Price-Induced Patterns of Competition," Marketing Science, INFORMS, vol. 8(4), pages 291-309.
    29. Manzur, Enrique & Olavarrieta, Sergio & Hidalgo, Pedro & Farías, Pablo & Uribe, Rodrigo, 2011. "Store brand and national brand promotion attitudes antecedents," Journal of Business Research, Elsevier, vol. 64(3), pages 286-291, March.
    30. Sivakumar, K., 2003. "Price-tier competition: Distinguishing between intertier competition and intratier competition," Journal of Business Research, Elsevier, vol. 56(12), pages 947-959, December.
    31. Mills, David E, 1999. "Private Labels and Manufacturer Counterstrategies," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 26(2), pages 125-145, June.
    32. Williams, J.R., 1992. "How Sustainable is your Competitive Advantage?," GSIA Working Papers 1992-03, Carnegie Mellon University, Tepper School of Business.
    33. James Vaupel & Kenneth Manton & Eric Stallard, 1979. "The impact of heterogeneity in individual frailty on the dynamics of mortality," Demography, Springer;Population Association of America (PAA), vol. 16(3), pages 439-454, August.
    34. 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.
    35. Romaniuk, Jenni & Dawes, John & Nenycz-Thiel, Magda, 2014. "Generalizations regarding the growth and decline of manufacturer and store brands," Journal of Retailing and Consumer Services, Elsevier, vol. 21(5), pages 725-734.
    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. Mao, Zhixin & Duan, Yongrui & Yao, Yuliang & Huo, Jiazhen, 2021. "The moderating effect of average wage and number of stores on private label market share: A hierarchical linear model analysis," Journal of Retailing and Consumer Services, Elsevier, vol. 60(C).
    2. Holzer, Patrick Sebastian, 2020. "The effect of time-varying factors on promotional activity in the German milk market," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    3. 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).
    4. Kirsten Victory & Magda Nenycz-Thiel & John Dawes & Arry Tanusondjaja & Armando Maria Corsi, 2021. "How common is new product failure and when does it vary?," Marketing Letters, Springer, vol. 32(1), pages 17-32, March.
    5. Mao, Zhaofang & Du, Zelin & Yuan, Ruiying & Miao, Qiqi, 2022. "Short-term or long-term cooperation between retailer and MCN? New launched products sales strategies in live streaming e-commerce," Journal of Retailing and Consumer Services, Elsevier, vol. 67(C).
    6. Joaquin Sanchez & Carmen Abril & Michael Haenlein, 2020. "Competitive spillover elasticities of electronic word of mouth: an application to the soft drink industry," Journal of the Academy of Marketing Science, Springer, vol. 48(2), pages 270-287, March.

    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. Csilla Horváth & Dennis Fok, 2013. "Moderating Factors of Immediate, Gross, and Net Cross-Brand Effects of Price Promotions," Marketing Science, INFORMS, vol. 32(1), pages 127-152, July.
    2. Weimin Ma & Rong Cheng & Hua Ke, 2018. "Impacts of Power Structure on Supply Chain with a Store Brand," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 35(04), pages 1-25, August.
    3. Philipp Noormann & Sebastian Tillmanns, 2017. "Drivers of private-label purchase behavior across quality tiers and product categories," Journal of Business Economics, Springer, vol. 87(3), pages 359-395, April.
    4. 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.
    5. Fornari, Daniele & Fornari, Edoardo & Grandi, Sebastiano & Menegatti, Mario, 2016. "Leading national brands facing store brands competition: Is price competitiveness the only thing that matters?," Journal of Retailing and Consumer Services, Elsevier, vol. 30(C), pages 234-241.
    6. Mao, Zhixin & Duan, Yongrui & Yao, Yuliang & Huo, Jiazhen, 2021. "The moderating effect of average wage and number of stores on private label market share: A hierarchical linear model analysis," Journal of Retailing and Consumer Services, Elsevier, vol. 60(C).
    7. Keller, Kristopher O. & Dekimpe, Marnik G. & Geyskens, Inge, 2022. "Adding budget and premium private labels to standard private labels: Established empirical generalizations, emerging empirical insights, and future research," Journal of Retailing, Elsevier, vol. 98(1), pages 5-23.
    8. Wu, Lifang & Yang, Wei & Wu, Jessica, 2021. "Private label management: A literature review," Journal of Business Research, Elsevier, vol. 125(C), pages 368-384.
    9. Kuo, Chia-Wei & Yang, Shu-Jung Sunny, 2013. "The role of store brand positioning for appropriating supply chain profit under shelf space allocation," European Journal of Operational Research, Elsevier, vol. 231(1), pages 88-97.
    10. Sergio Meza & K. Sudhir, 2010. "Do private labels increase retailer bargaining power?," Quantitative Marketing and Economics (QME), Springer, vol. 8(3), pages 333-363, September.
    11. 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).
    12. Tao Chen & Baohong Sun & Vishal Singh, 2009. "An Empirical Investigation of the Dynamic Effect of Marlboro's Permanent Pricing Shift," Marketing Science, INFORMS, vol. 28(4), pages 740-758, 07-08.
    13. Serdar Sayman & Stephen J. Hoch & Jagmohan S. Raju, 2002. "Positioning of Store Brands," Marketing Science, INFORMS, vol. 21(4), pages 378-397, June.
    14. Ngobo, Paul Valentin, 2011. "What Drives Household Choice of Organic Products in Grocery Stores?," Journal of Retailing, Elsevier, vol. 87(1), pages 90-100.
    15. Grewal, Dhruv & Levy, Michael & Kumar, V., 2009. "Customer Experience Management in Retailing: An Organizing Framework," Journal of Retailing, Elsevier, vol. 85(1), pages 1-14.
    16. Sethuraman, Raj & Gielens, Katrijn, 2014. "Determinants of Store Brand Share," Journal of Retailing, Elsevier, vol. 90(2), pages 141-153.
    17. Gielens, Katrijn & Ma, Yu & Namin, Aidin & Sethuraman, Raj & Smith, Ronn J. & Bachtel, Robert C. & Jervis, Suzanne, 2021. "The Future of Private Labels: Towards a Smart Private Label Strategy," Journal of Retailing, Elsevier, vol. 97(1), pages 99-115.
    18. Karsten Hansen & Vishal Singh & Pradeep Chintagunta, 2006. "Understanding Store-Brand Purchase Behavior Across Categories," Marketing Science, INFORMS, vol. 25(1), pages 75-90, 01-02.
    19. Guyt, Jonne, 2015. "Consumer choice models on the effect of promotions in retailing," Other publications TiSEM c310f652-d725-4764-aac7-b, Tilburg University, School of Economics and Management.
    20. Amrouche, Nawel & Zaccour, Georges, 2007. "Shelf-space allocation of national and private brands," European Journal of Operational Research, Elsevier, vol. 180(2), pages 648-663, July.

    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:31:y:2016:i:c:p:109-116. 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.