The role of private label tiers and private label naming strategies in the relationship between private label brand equity and store loyalty
| Published date | 12 August 2019 |
| Date | 12 August 2019 |
| Pages | 124-138 |
| DOI | https://doi.org/10.1108/JPBM-09-2018-2017 |
| Author | Natalia Rubio,Nieves Villaseñor,María Yagüe |
The role of private label tiers and private label
naming strategies in the relationship between
private label brand equity and store loyalty
Natalia Rubio
Department of Finance and Marketing Research, Autonomous University of Madrid, Madrid, Spain
Nieves Villaseñor
Autonomous University of Madrid, Madrid, Spain, and
María Yagüe
Department of Financing and Commercial Investigation, Autonomous University of Madrid, Madrid, Spain
Abstract
Purpose –The evolution of private labels (PL) is a recent trend in the retail industry: many retailers now manage a PL portfolio that includes
multiple value propositions, as well as various brand name strategies. Little research has been done, however, on how this combination of PL
strategies conditions the results of the retailer that manages them. This study aims to examine the formation of PL brand equity and its effect on
store loyalty for retailers with differently tiered PL programs (a “better”program with standard PL vsa full PL quality spectrum with economy,
standard and premium PLs) and different PL naming strategies (store-banner name or stand-alone brand name).
Design/methodology/approach –A survey (N= 644) was used to test the model in the context of the consumer goods retail industry. Exploratory
factor analysis, confirmatory factor analysis and multi-group structural equation modelling techniques were usedtoassess the proposedmodel.
Findings –The results show differences in the formation of PL loyalty based on whether the retailer has a tiered PL program. In portfolios with
economy, standard and premium PLs, PL associations have a stronger effect than PL awareness in the formation of PL loyalty. Portfolios with a
standard PL show balanced effects of PL associations and PL awareness on PL loyalty formation. As to the positive effect of PL brand equity on store
loyalty, this study also shows a stronger effect of PL brand equity on store loyalty in chains that choose to use their store banner name in their PLs.
Practical implications –Retailers that manage multi-tier PL portfolios (as opposed to those that commercial ise a standard PL) can increase loyalty
to the PL portfolio significantly by constructing highly differentiated images of their economy, standard and premium PL s to ensure that consumers
truly perceive the different value propositions of their PL tiers. As to PL naming strategy, the authors recommend that retailers that use the same
retail chain name for one or several of their PLs invest in their corporate reputation to strengthen the brand equity achieved by their PLs and thus
increase loyalty to the retail chain. Retailers must perform specific communication and advertising campaigns for PLs with the stand-alone brand
name.
Originality/value –Today, any reference to PLs as a whole is overly simplistic, but no research has assessed empirically differences in the influences
of a multi-tiered vs a standard PL program on the PL loyalty formation for PL portfolios. Nor has any empirical research incorporated the influence of
PL naming strategy on store loyalty. This study fills these gaps, integrating into the same model two significant moderating variables of retailers’
strategy: their PL tier strategy and their PL naming strategy.
Keywords Loyalty, Private labels, Private label brand equity, Private label naming strategies, Tiered private label program
Paper type Research paper
Introduction
Private labels (hereafter, PLs) constitute a tremendously
important phenomenon at the level of both scholarship and
management (Calvo-Porral and Levy-Mangin, 2014;
González-Benitoand Martos-Partal, 2014). The significance of
these brands can be measured by the market share they have
achieved. PLs constitute a key item in the retailer’s strategy,
shaping the retailer’s positioning, image and differentiation
(Martenson, 2007;Sudhir and Talukdar, 2004). The global
market share in value of PLs was 16 per cent in 2016 (Nielsen,
2016). In the same year in Europe, PLs’market share in value
reached 31 per cent (PLMA, 2017), making Spain the
European countryinwhich PLs have the greatest weight.
The growing body of literatureon PLs since their appearance
attests to their importance to scholars. The first studies
focussed on similarities anddifferences in the price and quality
of PLs and manufacturer brands (Méndez et al.,2008;
Richardson et al., 1994),as well as consumers’attitudes toward
and perception of PLs, and the factors that influenced them
Thecurrentissueandfulltextarchiveofthisjournalisavailableon
Emerald Insight at: https://www.emerald.com/insight/1061-0421.htm
Journal of Product & Brand Management
29/1 (2020) 124–138
© Emerald Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/JPBM-09-2018-2017]
Received 19 September2018
Revised 11 April 2019
5 June 2019
10 June 2019
Accepted 13 June 2019
124
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