Consumers' Decision between Private Labels and National Brands in a Retailer's Store: A Mixed Multinomial Logit Application

Fabian Bergès-Sennou, Daniel Hassan, Sylvette Monier-Dilhan and Helene Raynal

No 9407, 103rd Seminar, April 23-25, 2007, Barcelona, Spain from European Association of Agricultural Economists

Abstract: We propose to analyze the determinants of consumers' brand decision within a retailer store using a multinomial mixed logit approach. For the consumers' choice, national brands compete with private labels (both me-too product and high quality store brand). We first find that the standard private label (me-too), independently of the price effect, performs better than all national brands in terms of consumers' utility. Second, the high-quality private label does not reach its target yet in term of consumers' acceptance due to a poor product characteristics perception. Last, it appears that households' objective socioeconomic variables (income, education and household size) do not play any role in private label perception, whereas objective consumption behaviour (store loyalty) clearly favours store brand perception. We find that consumers have a lower private label demand elasticity than the low store loyal ones.

Keywords: Consumer/Household; Economics (search for similar items in EconPapers)
Pages: 19
Date: 2007
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa103:9407

DOI: 10.22004/ag.econ.9407

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