Consumers’ choice of private label considering reference price and moderating effect

Zhixin Mao, Yongrui Duan and Wenxia Liu

Journal of Retailing and Consumer Services, 2023, vol. 71, issue C

Abstract: Retailers frequently place private labels (PLs) next to the top-moving sales national brands (NBs) and utilize comparative pricing that is related to the national brands. There is thus always an external reference price between the private labels and the national brands. In this study, two categories of products were selected, and a hierarchical non-linear model used to study the impact of external reference prices on consumers’ choice of private labels. In addition, the effects of package size and average disposable income (ADI) were introduced into the analysis for the relationship between external reference price and consumers’ choice of private label. The findings show an inverted U-shaped curve between consumers’ choice of private labels and the external reference price discrepancy. Consumers in areas with high ADI are more likely to buy private labels. Package size and ADI have different direct and moderating effects on two categories of products. This study contributes to reference dependence theory and category management.

Keywords: Private label; Consumer choice; Reference price; Moderating effect; Hierarchical nonlinear model (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joreco:v:71:y:2023:i:c:s0969698922003095

DOI: 10.1016/j.jretconser.2022.103216

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