Identifying a private-label supplier on national brand
| Date | 13 May 2019 |
| Pages | 432-443 |
| Published date | 13 May 2019 |
| DOI | https://doi.org/10.1108/JPBM-06-2018-1908 |
| Author | Samanta Pérez-Santamaría,Mercedes Martos-Partal,Álvaro Garrido-Morgado |
Identifying a private-label supplier
on national brand
Samanta Pérez-Santamaría
Department of Business Economics and Administration, University of Salamanca, Salamanca, Spain, and
Mercedes Martos-Partal and Álvaro Garrido-Morgado
IME Instituto Multidisciplinar de Empresa (Multidisciplinary Institute for Enterprise), University of Salamanca, Salamanca, Spain
Abstract
Purpose –The purpose of this study is to examine the effects of identifying suppliers on private label (PL) packaging on the perceived quality, brand
image, loyalty intention and relative price of the national brands (NB) produced by dual manufacturers, considering the possible moderating effects
of the images of both the NB and PL.
Design/methodology/approach –The study uses an experimental setting with two different categories of grocery products.
Findings –The empirical evidence reveals different effects of PL supplier identification, according to brand images.
Research limitations/implications –This paper contributes to brand extension literature on the effects on evaluations of the parent brand. It also
contributes insights about the identity and identification of PL manufacturers.
Practical implications –This supplier identification does not affect or positively affect to the perceived quality, brand image or loyalty towa rd NBs
with lower images, but it negatively affects those with high images, especially when the PL also has a high image and adopts a stronger price
positioning. Moreover, NBs with lower images appear more expensive or do not affect when they supply PLs for retailers with high images and
stronger price positioning. However, if lower image NB supply a PL with the lower image, the effects do not affect or is perceived as cheaper.
Originality/value –This paper extends prior knowledge about the decision to function as a dual manufacturer from the manufacturer’s perspective.
Keywords Perceived quality, Brand image, National brands, Dual branding, Loyalty intention, Private-label suppliers, Relative price
Paper type Research paper
1. Introduction
Private labels have become central to retail strategies, with
increasingly sophisticated approaches. The price and quality
differentials that traditionally distinguished these store brands
from national brands (NB) are diminishing (Steenkamp et al.,
2010), and many retailers develop extended PL portfolios with
distinct value propositions (Geyskens et al.,2010). In response,
NB manufacturers must account for PLs in their strategic
decisions (G
omez and Rubio-Benito, 2008;Hoch, 1996;Kumar
and Steenkamp, 2007;Verhoef et al., 2002), whether by waiting,
doing nothing, increasing their distinction from the PLs (e.g.
improving quality and innovations), reducing price differentials or
introducing additional brands. Another option is to supply PLs,
and in this development, two types of PL manufacturers have
emerged: those that specialize in PLs and dual manufacturers that
produce both PLs and NBs. In the USA, an estimated half of all
NB manufacturers follow such a dual strategy, and this option
appears particularly appealing in markets that feature strong PL
penetration (Kumar and Steenkamp, 2007).
By supplying PLs, dual manufacturers can take advantage of
their excess production capacity, guarantee a broader presence of
their own brands on retail shelves and pursue innovations at
reduced costs by experimenting with premium PLs (ter Braak
et al., 2013b). However, such options also might lead to a loss of
brand equity for dual manufacturers, which could harm
perceptions of the quality of, and their ability to charge higher
prices for their NB. In addition, a cannibalization effect might
arise between both the NB and PL produced by the same
manufacturer (Kumar and Steenkamp, 2007).
Rather than studying the strategic decision to function as a
dual manufacturer, prior academic research tends to focus on
consumer (De Chernatory, 1989;Steenkamp et al., 2010;
Szymanowski and Gijsbrechts, 2012) or retailer (Chung and
Lee, 2017;ter Braak et al., 2013a) perspectives on PLs. The
manufacturer’s perspective is less widely addressed (G
omez
and Rubio-Benito, 2008;ter Braak et al.,2013b;Verhoef et al.,
2002). Yet, this perspective is pertinent, especially, as more
manufacturers start to supply PLs, and this practice becomes
more familiar. Therefore, this study adopts a manufacturer
perspective analyzing the effect on NB equity of dual
The current issue and full text archive of this journal is available on
Emerald Insight at: www.emeraldinsight.com/1061-0421.htm
Journal of Product & Brand Management
28/3 (2019) 432–443
© Emerald Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/JPBM-06-2018-1908]
The authors acknowledge the support received from the University of
Salamanca and the Banco Santander, which provided a pre-doctoral grant;
and the partial support of the Ministerio de Economía, Industria y Competitividad,
Grant ECO2017-82107-R (Spain). A previous version of this paper has been
considered for publishing as a working paper of the Working Paper Collection
of Cátedra Fundaci
on Ram
on Areces de Distribuci
on Comercial.
Received 22 June2018
Revised 2 November 2018
20 December 2018
Accepted 1 January 2019
432
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