Are consumers more loyal to national brands than to private labels?

Fabian Berges, Sylvette Monier Dilhan and Daniel Hassan
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Fabian Berges: GREMAQ - Groupe de recherche en économie mathématique et quantitative - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique, IDEI - Institut d'Economie Industrielle - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse
Sylvette Monier Dilhan: GREMAQ - Groupe de recherche en économie mathématique et quantitative - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique
Daniel Hassan: GREMAQ - Groupe de recherche en économie mathématique et quantitative - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique
Authors registered in the RePEc Author Service: Sylvette Monier-Dilhan

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Abstract: The evolution of private labels (PLs) can be understood in terms of a strategy adopted by the retail industry with the aim of competing with national brands (NBs). In the 1990s, this strategy led to the development of ‘me too' products, which currently represent the largest share of store brand products. Since the early 2000s, retailers have widened the range of their store brands by introducing high-quality products. The aim of this study was to estimate consumers' attachment to ‘me-too' and niche PLs respectively, as compared to NBs. We captured the degree of maturity of these PLs through their price-elasticities, computed for three staple goods offered by three mass retail companies. It was found that price sensitivity does not differ much between the ‘me-too' PLs and the corresponding NBs. This result confirms that ‘me-too' products are now considered reliable quality brands. However, in the high quality segment, consumers remain more sensitive to the price of PLs than to that of NBs, a characteristic which may relate to their recent introduction on the market.

Date: 2013
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Published in Bulletin of Economic Research, 2013, 65 (S1), pp.s1-s16. ⟨10.1111/j.1467-8586.2012.00459.x⟩

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Related works:
Journal Article: ARE CONSUMERS MORE LOYAL TO NATIONAL BRANDS THAN TO PRIVATE LABELS? (2013)
Working Paper: Are Consumers More Loyal to National Brands than to Private Labels? (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02647680

DOI: 10.1111/j.1467-8586.2012.00459.x

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