1. Referrences: a. Author: Ronald E. Goldsmith, Leisa R. Flynn, Elizabeth Goldsmith and E. Craig Stacey. b.

Title: Consumer attitudes and loyalty towards private brands c. Journal Name: International Journal of Consumer Studies ISSN 1470-6423 2. Research Problem: Private or store brands improve the efficiency of consumer decision making by offering equivalent quality products at lower prices. The present study evaluated consumer attitudes towards private brands with the goal of understanding their appeal in order to enhance efforts to convince more consumers to buy them. Besides touting lower prices, private brand promotions might stress the equivalent performance of private labels and create promotions showing how these brands can be relevant to consumers lifestyles and needs. 3. Variable: The study employed four dependent variables matching the hypotheses to assess different attitudes towards national and private label brands. The first two dependent variables, category sensitivity and private brand performance, asked participants to evaluate the category as a whole. The second two dependent variables, price sensitivity and relevance, were assessed for specific brands within the category a. Dependent Variable: i. Category sensitivity: This is an assessment of how important brands are to the buyers. ii. Performance of private label brands: This was an assessment about how consumers feel about the performance of private label brands iii. Price sensitivity: This is an assessment about what consumers feel about the prices of the brands iv. Relevance: This was an assessment to find out how relevant the brands were to the survey participants lives. 4. Hypothesis: a. Buyers of private labels feel that brands are less important or less of a concern than do national brand buyers, thus they are less brand conscious. b. Private label buyers are more likely than are national brand buyers to feel that private labels perform equivalently to national brands. c. National brand buyers are less sensitive to the price of (they are willing to pay more for) national brands than private label buyers are; but private brand buyers are more willing to pay for private brands than are national brand buyers. d. National brand buyers are more likely to say that national brands are relevant or fit their values than are private label buyers, but private label buyers are more likely to say that private labels are

relevant or fit their values than are national brand buyers. 5. Method: a. Survey method: The data were collected via telephone interviews with members of a large advertising research firms consumer research panel and limited to consumers 18 years of age and older. The interview covered 21 categories of packaged goods. Each participant was asked qualifier questions and then was randomly assigned to one of the 21 product categories for further questions. Thus, sample sizes for specific product categories varied. For this study, we selected three product categories in which there was sufficient number of private brand buyers to permit statistical analysis: orange juice, cereal and bottled water. 6. Findings: The first analyses examined relationships between being a private brand buyer of each of the three product categories with respondent demographics. Next, the hypotheses regarding general attitudes of category sensitivity and performance were tested, followed by the category specific hypotheses, price sensitivity and brand relevance. a. Private brand purchasing and demographics : Private brand buyers were identified in each category through responses to the question: Which is the brand of (orange juice, cereal, bottled water) youve bought most often over the past 12 months?. The relationship between being either a private or a national brand buyer with four demographic variables: gender, age category, household size and household income. i. ii. For the orange juice category, none of these analyses revealed statistically significant relationship. For the cereal category, being a private brand buyer was associated with gender. Age, household income and household size were not associated significantly with cereal brand choice. For bottled water, being a private brand buyer was associated with being in an older age category. This suggests a tendency for younger consumers to avoid private brands of bottled water. There were no statistically significant relationships between being a private or national brand buyer and gender, household size or income.

iii.

b. Private brand purchase and category sensitivity i. The means for the entire samples showed that orange juice were tied for brand importance, but that bottled water brands seemed to be less important to buyers. This difference might be because bottled waters are unlikely to differ in sensory qualities such as taste, making them less distinct than cereal and orange juice. Thus, we can conclude that the analyses

support the first hypothesis: national brand buyers seem to care more about brand differences than private brand buyers do. c. Private brand purchase and private label performance i. The second dependent variable was an assessment of how well private label brands are perceived to perform compared with national brands. The interview asked survey participants to pick one of three statements to best reflect how they felt about the performance of private labels. ii. Overall, the results support the second hypothesis; more private brand buyers have faith in the performance of private brands than national brand buyers do.

d. Private brand purchase and national brand price sensitivity i. The third hypothesis proposed that national brand buyers are more insensitive to price than private label buyers are. This tendency is likely to vary by product category and brand, so it was measured for five brands in each category. ii. In virtually every case of a national brand, the mean score for the national brand buyers is higher than that of the private brand buyers, and significantly higher for Tropicana and Cheerios, but the mean scores for the private brand buyers are higher for the only two private brands, Stores Corn Flakes and Local Brand of bottled water. These results not only support the hypothesis, they confirm that part of the motivation for private brand buying is price.

e. Private brand purchase and brand relevance i. The final hypothesis proposed that national brand buyers see national brands as more relevant to their lifestyles and needs than private brand buyers do, but this association is the opposite for private brands. ii. For orange juice and bottled water, the ean relevance scores for the national brand buyers are higher, indicating greater relevance of the brand, for the national buyers than for the private label buyers, but only for the national brands. For the private labels, Stores Corn Flakes and Local Brand of bottled water, the relationship is. Thus, the national brand buyers tend to see national brands as more relevant to their lifestyles and needs than private label buyers do, but private label buyers see private labels as more relevant to their lifestyles and needs than national brand buyers do.

They confirm that private label buyers are price sensitive and see high quality in private label goods. The results show that private label buyers are less brand conscious than are national brand buyers, but they see relevance in the brand they buy in much the same way as do national brand buyers, confirming

previous findings.With additional research, this information may help consumer advocates in their efforts to persuade consumers to use private labels as a means of improving their overall quality of life.