Understanding price premium for grocery products: a conceptual model of customer‐based brand equity
| Pages | 401-414 |
| Date | 25 September 2007 |
| Published date | 25 September 2007 |
| DOI | https://doi.org/10.1108/10610420710823762 |
| Author | Johan Anselmsson,Ulf Johansson,Niklas Persson |
| Subject Matter | Marketing |
Understanding price premium for grocery
products: a conceptual model of
customer-based brand equity
Johan Anselmsson, Ulf Johansson and Niklas Persson
Department of Business Administration, School of Economics and Management, Lund University, Lund, Sweden
Abstract
Purpose – This paper seeks to develop a framework for understanding what drives customer-based brand equity and price premium for grocery
products.
Design/methodology/approach – The paper reviews empirical studies made within the area of brand equity and studies of grocery products. It
compares and analyses the results from an explorative and qualitative field study with previous research on brand equity and food quality.
Findings – The study finds that brand equity and price premium focusing on the grocery sector specifically highlights the role of uniqueness, together
with the four traditionally basic dimensions of brand equity proposed: awareness, qualities, associations and loyalty. Relevant brand associations
(origin, health, environment/animal friendliness, organisational associations and social image), and quality attributes (taste, odour, consistency/texture,
appearance, function, packaging and ingredients) specific to groceries are identified and proposed for future measurement scales and model validating
research.
Practical implications – The development of a customer-based brand equity model, that adds awareness, associations and loyalty to previous
discussions on price and quality, brings to the table a more nuanced and multi-faced tool for marketing of consumer packaged food.
Originality/value – The paper provides a framework for understanding, evaluating, measuring and managing brand equity for grocery products. As
this paper presents the first conceptual brand equity framework for groceries, there is a contribution to research on food branding. Also, there is a
contribution to the general field of brand equity as previous models have been very general.
Keywords Brand equity, Premium pricing, Food products, Quality, Generics, Customer loyalty
Paper type Research paper
An executive summary for managers and executive
readers can be found at the end of this article.
Introduction
Increasing internationalisation together with centralisation of
retailer power and increasing the presence of store brands has
put increasing pressure on manufacturer brands. One strategy
manufacturers can use to defend themselves against retailer
brands is based on increasing quality and to distance their
manufacturer brands from the retailer’s brands in terms of
quality and price (Hoch, 1996). However there is also a clear
trend towards differentiation for retailer brands, rather than
just simplicity and low prices (Burt, 2000; Laaksonen and
Reynolds, 1994).
Literature on the competitive situation in the grocery sector
has primarily focused on two dimensions of positioning: price
and quality (e.g.,Bronnenberg and Wathieu, 1996; Hoch,
1996; Ghose and Lowengart, 2001). Much research have
accordingly focused on defining, measuring and managing
quality and determinants of quality in the food sector (Ophuis
and Van Trijp,1995; Br unso et al., 2002; Grunert et al., 2004;
Acebro
´n and Dopico, 2000; Verdu
´Jover et al., 2004; Sanzo
et al., 2003; Richardson et al., 1994)
The strong focus on quality as a determinant of price can,
however, be questioned, as more recent empirical research has
showed that quality alone can explain only 20 per cent of the
prices consumers are willing to pay for different packaged
food products (Anselmsson and Johansson, 2005;
Sethuraman, 2000; 2003). Sethuraman (2000, 2003) found
the non-quality attributes to be more important, but gives
little guidance for future research. A stronger focus on the
brand, rather than only product quality and price, could offer
a better understanding of why consumers are willing to pay
more for products from some grocery brands: what drives
price premium and customer preferences, in grocery product
categories?
The strategic impact of branding in general has been
extensively researched (e.g. Aaker, 1996; Keller, 1993; de
Chernatony and McDonald, 2003; Kapferer, 2004; Melin,
1997). How customers perceive brands and what motivates
them to pay price premium is an important theme in research
on brand equity. Two fundamental motives for studying brand
equity exist: one financial motive, with the purpose of
estimating the value of the brand for accounting purposes,
and one motive derived from the strive for more efficient
marketing efforts (Keller, 1993). In the latter context, the
research departs from customer perceptions, i.e. customer
based brand equity. One often mentioned rationale for
focusing on consumers perception is that customer-based
brand equity precedes, and contributes to, financial brand
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1061-0421.htm
Journal of Product & Brand Management
16/6 (2007) 401–414
qEmerald Group Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/10610420710823762]
401
To continue reading
Request your trial