Consumer Misinformation and the Brand Premium: A Private Label Blind Taste Test

Bart Bronnenberg, Jean-Pierre H. Dubé and Robert E. Sanders

No 25214, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We run in-store blind taste tests with a retailer’s private label food brands and the leading national brand counterparts in three large CPG categories. In a survey administered during the taste test, subjects self-report very high expectations about the quality of the private labels relative to national brands. However, they predict a relatively low probability of choosing them in a blind taste test. Surprisingly however, an overwhelming majority systematically chooses the private label in the blinded test. During the week after the intervention, the tested private label product market shares increase by 15 share points, on top of a base share of 8 share points. However, the effect diminishes to 8 share points during the second to fourth week after the test and to 2 share points during the second to fifth month after the test. Using a structural model of demand, we show these effects survive controls for point-of-purchase prices, purchase incidence, and the feedback effects of brand loyalty. We also find that the intervention increases the preference for the private label brands, and that it decreases the preference for the national brands, relative to the outside good. The findings are consistent with a treatment effect of information on demand where the memory for this information decays slowly over time. Alternative explanations to the information treatment are ruled out.

JEL-codes: L11 L15 M31 M37 (search for similar items in EconPapers)
Date: 2018-11
New Economics Papers: this item is included in nep-com and nep-ipr
Note: IO
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published as Bart J. Bronnenberg & Jean-Pierre Dubé & Robert E. Sanders, 2020. "Consumer Misinformation and the Brand Premium: A Private Label Blind Taste Test," Marketing Science, vol 39(2), pages 382-406.

Downloads: (external link)
http://www.nber.org/papers/w25214.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:25214

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w25214

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().