Private label brands: measuring equity across consumer segments
| Date | 14 September 2012 |
| DOI | https://doi.org/10.1108/10610421211264919 |
| Pages | 428-438 |
| Published date | 14 September 2012 |
| Author | Andres Cuneo,Pilar Lopez,Maria Jesus Yague |
| Subject Matter | Marketing |
Private label brands: measuring equity across
consumer segments
Andres Cuneo
Department of Marketing, Adolfo Ibanez Business School, Santiago de Chile, Chile
Pilar Lopez
Department of Business Economics, Universitat Autonoma de Barcelona, Barcelona, Spain, and
Maria Jesus Yague
Department of Marketing, Universidad Autonoma de Madrid, Madrid, Spain
Abstract
Purpose – The aim of this paper is to provide evidence that private label brands (PLB) have the ability to build brand equity as they develop, and to
determine whether the capitalization of PLB equity varies across consumer segments and product categories. The paper builds on previous research
incorporating consumer-level factors, showing their relevance as key determinants of PLB choice.
Design/methodology/approach – The brand choice model used is a multinomial logit model (MNL) calibrated with a consumer panel database of
two product lines of yoghurt from 8,000 Spanish households for a three-year period.
Findings – It is shown that PLB have been able to build brand equity throughout their development, across product categories; however, brand equity
is capitalized across only some consumer segments. The use of consumer-level factors to segment the market prior to measuring brand equity is
necessary to allow the identification of consumer groups where equity is created.
Practical implications – Findings provide key directions to PLB managers regarding how to determine, approach and leverage the equity of their PLB
across different consumer segments and product categories.
Originality/value – Prior research has attempted to measure PLB equity using product/brand factors and market factors, but without considering
consumer-level factors. In this research, consumer-level factors, specifically consumer demographics, are incorporated into the analysis, and equity is
measured across seven different consumer segments for two product lines.
Keywords Private labels, Store brands, Brand equity, Consumer segments, Multinomial logit, Demographics, Market segmentation
Paper type Research paper
An executive summary for managers and executive
readers can be found at the end of this article.
Introduction
Private label brands (PLB) are a steadily growing
phenomenon that has reached a large number of countries,
sectors, and product categories. Often referred to as the
“unbranded” alternative to the big brands, PLB have
undergone a profound transformation over time (Laaksonen
and Reynolds, 1994). Whereas PLB were once known as low-
price/low-quality alternatives, they are now able to compete
successfully in the same territories that were traditionally
dominated by manufacturer brands (Kumar and Steenkamp,
2007; Steenkamp and Dekimpe, 1997). In some cases, they
have left behind their value propositions based on value-for-
money and moved into less functional territories, offering
premium and even symbolic products to the market (Burt,
2000).
The evolution of PLB has not been overlooked by
academics. Research on this topic has been prolific in recent
years (Ailawadi and Keller, 2004; Hyman et al., 2010).
However, in the growing body of literature, only a few studies
have considered PLB from the perspective of branding
theories. Rather, researchers have either approached the PLB
phenomenon from the perspective of retailers (Ailawadi and
Harlam, 2002, 2004; Dhar and Hoch, 1997; Gedenk and
Neslin, 1999; Raju et al., 1995), manufacturers (Hoch, 1996;
Hoch and Banerji, 1993; Quelch and Harding, 1996; Rajiv
et al., 2002), and consumers (Ailawadi et al., 2008; Baltas,
1997; Baltas and Argouslidis, 2007; Miquel et al., 2002), or
analyzed the competitive interactions among them (Ailawadi,
Gedenk and Neslin, 2003; Bonfer and Chintagunta, 2004;
Dick et al., 1997; Sethuraman, 1996; Sethuraman and Cole,
1999).
Now more than ever, understanding PLB from the
perspective of branding theo ries is a fundamental and
important issue to be addressed. For years, researchers and
managers have considered manufacturer brands as “the real
thing” compared to PLB whose role has been associated
mainly with price sensitive segments (Kapferer, 2008). This
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1061-0421.htm
Journal of Product & Brand Management
21/6 (2012) 428–438
qEmerald Group Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/10610421211264919]
The authors acknowledge the support of Kantar Worldpanel (Spain) and
especially of Raquel Arribas for the data provided for the analysis. The
authors also appreciate the valuable comments and advice from Professor
Sandra Milberg.
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