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Two-Tier Store Brands: The Benefic Impact of a Value Brand on Perceptions of a Premium Brand

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  • Palmeira, Mauricio M.
  • Thomas, Dominic

Abstract

A recent trend in the retail industry is the emergence of multi-tier store brands. In the current article, we contrast consumers’ expectations in a retailing context in which a single store brand is present to one in which two store brands are offered in the same category. We propose that when a retailer offers a single store brand, consumers expect it to be of lower quality even when it is described as a premium brand. On the other hand, quality perception of a premium store brand increases in the presence of a value store brand. Importantly, quality perceptions of a value store brand are not affected by the presence of a premium store brand. In two studies we find support for our hypotheses showing the benefic impact of a value store brand on quality perceptions of a premium store brand.

Suggested Citation

  • Palmeira, Mauricio M. & Thomas, Dominic, 2011. "Two-Tier Store Brands: The Benefic Impact of a Value Brand on Perceptions of a Premium Brand," Journal of Retailing, Elsevier, vol. 87(4), pages 540-548.
    • Handle: RePEc:eee:jouret:v:87:y:2011:i:4:p:540-548
    DOI: 10.1016/j.jretai.2011.09.004
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    2. Badrinarayanan, Vishag & Becerra, Enrique P., 2019. "Antecedents and consequences of shoppers' attitude toward branded store-within-stores: An exploratory framework," Journal of Business Research, Elsevier, vol. 105(C), pages 189-200.
    3. Rubio, Natalia & Villaseñor, Nieves & Yagüe, María Jesús, 2017. "Creation of consumer loyalty and trust in the retailer through store brands: The moderating effect of choice of store brand name," Journal of Retailing and Consumer Services, Elsevier, vol. 34(C), pages 358-368.
    4. ter Braak, Anne & Geyskens, Inge & Dekimpe, Marnik G., 2014. "Taking private labels upmarket: Empirical generalizations on category drivers of premium private label introductions," Journal of Retailing, Elsevier, vol. 90(2), pages 125-140.
    5. 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.
    6. Pontes, Nicolas & Palmeira, Mauricio & Jevons, Colin, 2017. "Brand expertise and perceived consistency reversals on vertical line extensions: The moderating role of extension direction," Journal of Retailing and Consumer Services, Elsevier, vol. 34(C), pages 209-218.
    7. 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.
    8. Fuduric, Morana & Varga, Akos & Horvat, Sandra & Skare, Vatroslav, 2022. "The ways we perceive: A comparative analysis of manufacturer brands and private labels using implicit and explicit measures," Journal of Business Research, Elsevier, vol. 142(C), pages 221-241.
    9. Hökelekli, Gizem & Lamey, Lien & Verboven, Frank, 2017. "Private label line proliferation and private label tier pricing: A new dimension of competition between private labels and national brands," Journal of Retailing and Consumer Services, Elsevier, vol. 36(C), pages 39-52.
    10. Hagtvedt, Henrik & Patrick, Vanessa M., 2016. "Gilt and Guilt: Should Luxury and Charity Partner at the Point of Sale?," Journal of Retailing, Elsevier, vol. 92(1), pages 56-64.
    11. 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.
    12. Óscar González-Benito & Mercedes Martos-Partal, 2014. "Price sensitivity versus perceived quality: moderating effects of retailer positioning on private label consumption," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 15(5), pages 935-950, November.
    13. Zha, Yong & Guo, Xiaowei & Chen, Huaping & Ling, Liuyi, 2022. "How does Store Branded Lookalike Packaging Affect Competition in a Dyadic Supply Chain: A Consumer Confusion Perspective," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 165(C).
    14. Cui, Qinquan & Chiu, Chun-Hung & Dai, Xin & Li, Zhongfei, 2016. "Store brand introduction in a two-echelon logistics system with a risk-averse retailer," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 90(C), pages 69-89.

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