Perceptual categorization of private labels and national brands
| DOI | https://doi.org/10.1108/10610420910972774 |
| Pages | 251-261 |
| Date | 17 July 2009 |
| Published date | 17 July 2009 |
| Author | Magda Nenycz‐Thiel,Jenni Romaniuk |
| Subject Matter | Marketing |
Perceptual categorization of private labels and
national brands
Magda Nenycz-Thiel and Jenni Romaniuk
School of Marketing, Adelaide, Australia
Abstract
Purpose – This paper seeks to compare how brand users and non-brand users currently position private labels and national brands in three packaged
goods categories. It aims to provide guidelines for positioning strategies for both private labels and national brands through the outcomes.
Design/methodology/approach – Data were collected in a telephone survey of 600 randomly recruited primary shoppers. Binary logistic regression
was used to examine the informational cues consumers use to categorize private labels and national brands. The memory structures of users and non-
users of private labels were then separately modelled.
Findings – Results suggest that the perceptual categorization into private label brands and national brands differs once private labels have been
purchased. Users of private label brands did not see them as being any less trustworthy than national brands. However,non-users of private labels did
use trust to discriminate between the two types of brands, and tended to use negative attribute information to categorize the brands into groups.
Regardless of experience, however, private labels form a subgroup in consumers’ memory, with low price and low quality as the main drivers of this
categorization.
Originality/value – This paper extends past studies by measuring the perceptions of private labels as individual brands within a market, which more
closely represents actual consumer memory structures. It also uses both positive and negative product attributes, which has not featured in prior work
on private labels perceptions. The findings have implications for retailers looking to launch and manage private labels and manufacturers who need to
compete with them.
Keywords Generics, Corporate brands, Brands, Perception, Product positioning
Paper type Research paper
An executive summary for managers and executive
readers can be found at the end of this article.
1. Introduction
Private labels (PLs) are now a permanent feature of
competitive retail landscapes all around the world. In
Western Europe the PLs category is worth 20 percent of
FMCG sales (Nielsen, 2008). In the USA sales of PLs
exceeded $50 billion in 2002 (Sprott and Shimp, 2004).
Dollar sales of PLs grew at an annual rate of more than 7
percent from 1996 to 2004, far outpacing the growth of
manufacturers’ brands (Baltas and Argouslidis, 2007).
Today, the majority of people include PLs in their
repertoire for at least some categories (ACNielsen, 2005).
Prior studies show that consumers buy PLs in much the same
way as they buy manufacturers’ brands (Keng and Ehrenberg,
1984; Uncles and Ellis, 1989; Bound and Ehrenberg, 1997).
During the process of seeing, buying and using PLs, people
develop brand associations about them. Many of these PL
associations are about how the brand performs in terms of
meeting category needs which, under the Associative Network
Theories of Memory model (Anderson and Bower, 1979),
interact with associations of other brands. A key role of these
category needs is to act as cues to retrieve the brand name or
to evaluate the appropriateness of a brand once retrieved
(Nedungadi, 1990). Therefore each PL brand competes in
consumer memory with national brands (herein referred to as
NBs) and other PLs.
Schemas reflecting the positioning of PLs have remained
unchanged for years (e.g. Bellizzi et al., 1981; Richardson
et al., 1994). Traditionally, PLs have been positioned as low
price/good value for money offerings. Their major selling
point has been their price advantage and as such PLs
themselves can act as a cue to trigger a perception of value
(Zeithaml, 1988) i.e. a product is perceiveed as a good value
offer simply because it is a PL. However, recently retail chains
have been launching premium, organic and “health” PLs,
which are often not cheaper alternatives to NBs (Richardson,
1997; Tarnowski, 2005). Moreover, the Private Label
Manufacturers Association (PLMA) espouses that the
quality of PLs is comparable to the quality of NBs. This
implies that consumers are receiving conflicting messages to
the once well-anchored perceptual positioning of PLs as
something very different to NBs.
Past studies on PLs have examined the correlates of store
brand proneness (e.g. Coe, 1971; Dick et al., 1995) or PL
brand attitude (e.g. Myers, 1967; Garretson et al., 2002). The
attention has been given to consumer’s perceptions of PLs has
been more limited (exceptions are Bellizzi et al. (1981);
Cunningham et al. (1982); De Wulf et al. (2005); Cheng et al.
(2007)). The findings to date show that consumers generally
do perceive differences between PLs and NBs across
dimensions in price, quality, value and risk/trust perceptions
at subcategory level. To our best knowledge, there is no
research to date that has examined customers’ perceptions of
PLs and NBs at individual brand level to see if the same
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1061-0421.htm
Journal of Product & Brand Management
18/4 (2009) 251–261
qEmerald Group Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/10610420910972774]
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