The Importance of Store Image and Retail Service Quality in Private Brand Image-Building

Objective: The purpose of this research is to highlight the role which store image and retail service quality can play in private brand image-building in the context of an emerging market in South-Eastern Europe (i.e. Bosnia and Herzegovina). We propose to address this issue by seeking answers to the following questions: (1) Does a ‘halo effect’ take place between the store image and the private brand image? (2) How does consumer’s evaluation of the quality of the service delivered by a retailer affect the image of its private brand? Research Design & Methods: Data were collected through a field survey via the storeintercept method. The sample consisted of 699 customers of two large retail chains. The data were analysed using the Structural Equation Modelling technique. Findings: The findings of the present study suggest that store image and retail service quality are important factors in the formation of the image of product-branded products. Implications & Recommendations: This study offers some important insights for retailers who intend to develop their private brand. First, the image transfer from store brand to private brand suggests that retailers should consider the introduction of a private brand as a brand extension, with their stores as the parent brand. Second, we recommend that retailers put more emphasis on quality improvement initiatives related to the store environment attributes. Contribution & Value Added: This study enhances the discussion on the phenomenon of private branding by analysing the store-level factors which underpin the formation of private brand image in the context of less developed European markets.