International Journal of Consumer Studies ISSN 1470-6423

Consumer attitudes and loyalty towards private brands

Ronald E. Goldsmith , Leisa R. Flynn , Elizabeth Goldsmith and E. Craig Stacey
1 2

ijcs_863

339..348

The Richard M. Baker Professor of Marketing, Tallahassee, Florida, USA College of Business, The University of Southern Mississippi, Mississippi, USA 3 College of Human Sciences, Florida State University, Florida, USA 4 Center for Measurable Marketing, Stern School of Business, New York University, New York, USA

Keywords Behaviour, branding, consumers, food, marketing, private brands. Correspondence Ronald E. Goldsmith, The Richard M. Baker Professor of Marketing, 821 Academic Way, PO Box 3061110, Tallahassee, FL 32306-1110, USA. E-mail: rgoldsm@cob.fsu.edu doi: 10.1111/j.1470-6431.2009.00863.x

Abstract
Private or store brands improve the efciency 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. We used three samples (ns = 279, 245 and 305) of US consumers to compare attitudes of buyers of private and national brands in three product categories: orange juice, cereal and bottled water. The results show that private label buyers (23% of orange juice, 6.5% of cereal and 14% of bottled water buyers) consider brands themselves to be less important and private brands to offer better performance than do national brand buyers. When asked about specic brands, national brand buyers tended to be price insensitive towards national brands, and private label buyers price insensitive towards store brands. In addition, the national brand buyers saw some of the national brands to be more relevant to their lifestyles and needs, but the private label buyers saw the private labels the same way. Being relevant to consumers lives appears to inuence brand selection. 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.

Introduction
Private (store or own) brands interest a variety of stakeholders. Manufacturers of national brands view them as potential competitors, stores see them as prot centres and consumer advocates promote them as cost-effective alternatives. Although private brands are widely purchased in the US, the UK and elsewhere, the proportion of consumer dollars spent on private brands is only a fraction of national brand spending. Promoters of consumer welfare have a lot of room for improvement in encouraging consumers to buy as many private brands as they can to increase the efciency of their overall consumer purchasing. Most of these efforts, however, simply amount to pointing out the price differential and hoping that this is sufcient to persuade consumers to forgo national brands in favour of private label equivalents. Thus, the study of private brand consumer behaviour deserves close attention. Often managers know little beyond the reported demographics of private brand buyers in specic product categories, and these are likely to vary by category. A deeper understanding of their motivations and brand attitudes would help explain their decision making and suggest ways to persuade other consumers to try private labels. In this regard, however, consumer research reveals little information about private brand buyers

beyond the obvious fact that they are price conscious and are thus attracted to private brands by prices lower than those of national brands. Because consumer behaviour is more complex than a simple economic calculation, more insightful consumer strategies need to be developed. Research into consumer attitudes towards private labels can form the basis for such efforts, and so the present study contributes to this goal. The primary purpose of the present study is to assess attitudes towards private brands compared with national brands. Our aim is to better understand what consumers think of private brands so we can recommend strategies to promote their use and to help consumers as well.

Literature review
The rise of private label brands
Brands are a means to identify and distinguish specic product offerings so that they are seen as distinct in the marketplace. Marketers seek to win brand loyalty for their brands. Loyalty consists of positive attitudes and preferences for brands leading to their consistent repurchase. Brand loyalty is an avenue for companies to develop long-term relationships with customers. These
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relationships are two-way exchanges of value and information that benet both parties. The lifetime value of customers to companies is more important than one-off sales, but consumers too, can benet in terms of reduced risk and increased emotional and social value by repeatedly buying recognized brands. Consumers also can benet from buying private labels repeatedly because of the value they represent: the same budget goes further in terms of quantity, variety and even sometimes quality. Thus, buying private labels benets ordinary consumers economically, but questions remain regarding consumer attitudes leading to repeat purchase. The history of private brands, at least represented in the US business trade press, attests to the fact that in general, more and more consumers realize the advantages of private brands. Although private label sales tend to uctuate in response to macroeconomic changes (rising in times of ination and recession, declining when things are good; Lamey et al., 2007), the overall trajectory of private label sales appears to be up. In the past several decades, for example, business journalists have often reported the rise or growth of private label buying, not only in the US, but also in other countries (e.g. Levy, 2009). Private labels appeared in the late 1970s in the guise of generic products (see Neidell et al., 1984). Supermarkets displayed them in plain black and white trade dress. They were priced lower than branded equivalents, received little advertising support and often were of lower quality than national brands; were disdained by most manufacturers, most retailers and most consumers; and their sales represented less than 1% of total food sales (Burck, 1979). By 1980, however, they accounted for 10% of all sales in supermarkets carrying them (Marketing News, 1980). Their fortunes continued to uctuate, declining in the mid-1980s (Alsop, 1984) but rising again in the 1990s (Mathews, 1992). Attracted by their generous prot margins, retailers improved the quality, variety and marketing of their private labels to make them more attractive to consumers. In the 1990s, private label goods had spread from fast-moving consumer goods to clothing, home-care products and others (Boyle, 2003). By the 21st century, sales of private labels in the US had become pervasive (Retail Forward, 2009), representing over 20% of some category sales, with 3 out of 10 primary shoppers in 2009 buying more private labels than a year ago and 24% saying that they will continue to buy private labels. A survey of British shoppers in March 2009 reported similar ndings: 58% reported using nofrills products (Evening Times, 2009). This effect is likely because once they try them, many consumers do not switch back to national brands when economic circumstances improve (Lamey et al., 2007). Thus, private brands seem to be a permanent and growing component of the modern marketplace as retailers continue to improve their quality, variety and marketing support. But who buys them?

acteristics are difcult to make. Early research was unsuccessful in identifying the socio-economic characteristics of a market segment that could be clearly delineated, although Crittenden and Hawes (1979) did nd buying generic products associated with lower household income. Later research also found that older consumers with lower incomes characterize private label buyers (Hoch, 1996). Prendergast and Marr (1997) conrmed the association with lower income in New Zealand. Howell (2004) reports evidence that private label buying was especially prevalent among large, young families on a budget. These reports are supplemented by studies showing, not surprisingly, that private label buyers are characterized by price sensitivity (Hoch, 1996), although even this characteristic varies across product category (Erdem et al., 2004). Few studies look beyond demographics for clues to understanding the motivations and attitudes of private label buyers. Goldsmith and Flynn (2006) report that when attitudes of national brand buyers are compared with those of private label buyers, the former give more favourable ratings to national brands regarding brand familiarity, uniqueness, relevance and trust than do private label buyers, but the opposite pattern obtains when the subject is private labels. Jin and Suh (2005) report that in Korea, consumer innovativeness is associated with a positive attitude towards and intention to try private labels. A KPMG (2000) report describes attitudes of private label buyers, but these are limited to statements about the economy, shopping and advertising, revealing nothing about how these consumers feel about the private labels they buy.

Hypotheses
To develop the hypotheses tested in this study, we reviewed the literature on branding and private labels to provide predictions about the attitudes and motivations of private label buyers. The data permit us to test these hypotheses by comparing the attitudes of private label buyers with those of national brand buyers of the same product categories. The rst hypothesis deals with category sensitivity or how important brands are to consumers; that is, how much do brands matter. Brands play an important role in reducing risk for consumers because they guarantee quality and specic features such as taste and nutrition. Consumers come to trust national brands on this basis. Moreover, brands have symbolic meaning to consumers by representing to themselves and to relevant other people what the consumer is like (personality and self-image) and the relative status of the consumer in the social environment. This phenomenon can be termed brand imagery (Kumar and Steenkamp, 2007, p. 100). Fournier (1998) has shown that brands of even packaged goods can have important symbolic meanings for consumers, and others have shown that these meanings play an important role in determining brand choice (see Allen et al., 2008). Private labels, too, can convey meanings that extend beyond their utilitarian benets. These meanings, however, should be different from those of national brands (e.g. emphasizing practicality vs. status) and so consumers should view them differently from national brands, and they should have less inuence on behaviour because the marketers of private labels do little to project an image beyond the basic themes of high quality and low price. Consequently, we should expect that national brand buyers are more conscious overall of

Who buys private brands?

An obvious answer to this question is that consumers seeking to stretch their dollar, pound, euro or rupee are most likely to buy private brands. This behaviour is directly connected to income levels and to the macro-economic environment. Some researchers have attempted to provide descriptions of private label buyers to esh out this picture, but since private label buying varies across product categories, generalizations about their demographic char340

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brands and thus value national brands more in general than private label buyers do. Thus, our rst hypothesis reects this difference. H1: 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. Hypothesis 2 concerns brand performance. Besides price, perhaps the key feature distinguishing national from private brands is product quality (or perceived quality). Almost all discussions of private and national brands mention quality differences. Consumers certainly make quality distinctions between brands, and quality perceptions play a major role in determining whether consumers will buy a private label or not (Sethuraman and Cole, 1999). We surmise that when asked about the performance of national brands vs. that of private labels, we should observe that national brand buyers should rate the performance of national brands higher than that of private labels, but owing to the experience they have with private labels, which have been universally acknowledged to be the equal or near equal of national brands in recent years, private label buyers should rate the performance or quality of private labels equal to that of national brands (Yin, 2004). Our second hypothesis reects this difference in perceptions. H2: Private label buyers are more likely than are national brand buyers to feel that private labels perform equivalently to national brands. Some consumers can be price sensitive in general, seeking lower prices for everything they buy, and most consumer are selectively price sensitive for specic products. The hallmark of private label buying is price sensitivity. After all, buyers are attracted to private labels by lower prices, and national brands can compete more effectively with private labels by lowering their prices, thus reducing the differential (Quelch and Harding, 1996). The demographic characteristics most often associated with private label buying (older age, bigger families) suggest that getting the most value for the shopping dollar is more important to buyers of private labels than to buyers of national labels. When combined with brand consciousness, these factors should tend national brand buyers to be more price insensitive for national brands than are private label buyers. But the results reported by Goldsmith and Flynn (2006) that buyers of private label peanut butter are more price insensitive for their brands suggests the hypothesis. H3: 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. Most discussions of private labels stress the economic factors of quality, price and value. Discussions of buying branded products add to these factors the symbolic, emotional or hedonic benets that brands have for consumers (Kumar and Steenkamp, 2007, p. 99; Chitturi et al., 2008). Thus, buying a brand can be seen as the product of a value calculation involving a quality/ price tradeoff (Zeithaml, 1988) plus the risk reducing consistency benet that branded products promise (Allen et al., 2008), and then adding the symbolic meaning of the brand to the consumer (Allen et al., 2008; Walker, 2008). Although it is easy to see how brand image and brand meanings manifest in a variety

of product categories such as cars and clothing, this is no less true for consumer packaged goods (Fournier, 1998). Marketers of private labels do not invest much time, energy and money in crafting branding strategies that give meaning to their brands in the same way that manufacturers of branded products do, but in the past few decades, they have improved their overall marketing strategies by improving quality, packaging and advertising so that their branded products acquire identities that promise quality, consistency and value to consumers. In addition, since many private labels are identied as store brands, they can take on the identities of the stores that sell them, and vice versa (Berry, 1993; Turcsik, 2002; Boyle, 2003; Clark, 2004). Thus, it is not illogical to assume that some consumers of private brands come to see them as positive symbolic representations of their buyers, that is, not the badge of a consumer who cannot afford to pay branded prices, but as a smart shopper who appreciates the good value private labels can represent. In other words, private labels can come to be trusted and seen as representative of the identity of their buyers. Thus, H4: National brand buyers are more likely to say that national brands are relevant or t their values than are private label buyers, but private label buyers are more likely to say that private labels are relevant or t their values than are national brand buyers.

Method
Survey method
The data were collected via telephone interviews with members of a large advertising research rms consumer research panel and limited to consumers 18 years of age and older. The sampling plan matched US demographics as closely as possible. Panel members completed the survey in order to participate in a drawing. The interview covered 21 categories of packaged goods. Each participant was asked qualier questions [Which of the following describes you? Please answer yes or no for each. You have bought and served (or consumed) (orange juice, cereal, bottled water, etc.) within the past 3 months.] and then was randomly assigned to one of the 21 product categories for further questions. Thus, sample sizes for specic product categories varied. For this study, we selected three product categories in which there was sufcient number of private brand buyers to permit statistical analysis: orange juice, cereal and bottled water. The interview contained items measuring general opinions and also presented the respondents within each category with ve brands of either orange juice, cereal or bottled water, and asked them to answer a series of questions about each brand. Thus, each survey participant responded to ve separate brands. The order of the brands was randomized for each respondent to mitigate effects of order in the presentation. The survey questions were developed as part of a proprietary brand management modelling package originally developed in 1999 by Ipsos-ASI and using about 200 brands in 50 different product categories. A second study was undertaken in 2004 to update and rene the model. This study uses data from this second wave where the items were rened to create a more accurate and parsimonious instrument.
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Table 1 Demographics of the samples Orange juice Product category Gender Female Male Age 1834 years 3549 years 5064 years Marital statusa Married Single Household size One Two Three Four Five+ HH income <5K44 999 45 00084 999 85 000250K+ Race White Black Other Missing Total # % Cereal # % Bottled water # %

216 63 104 101 747 200 79 20 97 49 68 45 90 100 89 240 11 18 9 279

77% 23% 37% 36% 27% 72% 28% 7% 35% 18% 24% 16% 32% 36% 32% 86% 4% 7% 3%

197 48 100 90 55 164 81 25 87 46 34 53 89 84 72 205 10 25 5 245

80% 20% 41% 37% 22% 67% 33% 10% 36% 19% 14% 22% 36% 34% 29% 84% 4% 10% 2%

255 50 106 112 87 218 84 33 117 54 65 36 94 115 96 261 17 23 5 305

84% 16% 35% 37% 29% 72% 28% 11% 38% 18% 21% 12% 31% 38% 31% 86% 6% 7% 1%

a Married includes domestic partnership and single includes widowed, divorce and separated. Note: Not all values will total to 100% because of rounding.

Survey participants
Panel members were contacted by phone and were invited to complete the survey in order to participate in a drawing. The original sample consisted of 5389 panel members. Sample sizes were 279 for orange juice, 245 for cereal, and 305 for bottled water. Demographics for the three product categories appear in Table 1. The demographics of the samples show that they consisted primarily of middle-age, married women, which is appropriate considering the topic of the study.

when purchasing different product categories and services. Thinking of (orange juice, cereal, bottled water) how much do you care about your choice between brands? Please give a score from 1 to 10, where 1 means you dont care at all about your choice between brands and 10 means you care very much about your choice between brands of (orange juice, cereal, bottled water). The second dependent variable concerned how consumers feel about the performance of private label brands. Survey participants were asked to respond to the following question: In some product categories, the less expensive products, like store brands, have quite good performance, while in other categories their performance is rather poor. Considering the less expensive brands of (orange juice, cereal, bottled water), do you feel their performance is good enough for them to be used or not really? It does not matter if you personally buy these brands; it is your perceptions of their performance that we care about. So would you say that store brands (or less expensive brands) of (orange juice, cereal, bottled water) Perform very well, perform well enough, or really do not perform well enough to be considered? The third dependent variable was price sensitivity for a specic brand. The interviewers read the following item: The statements below describe how you might feel about the price of some brands. For each one, please indicate which statement best describes what you are ready to pay for the brand. (Please select one answer per brand.) The six possible responses ranged from 1 = Would not buy this brand at any price, to 4 = Would buy this brand if priced the same as another choice, to 6 = Would buy this brand if priced quite a bit more than another choice. Thus, the 6-point scale was scored so that higher scores indicated increasing insensitivity to price in this category. The nal dependent variable was how relevant the survey participants felt specic brands were to their lives. The interviewers asked the participants how they felt about ve specic brand names within each product category. The interviewer read the following instructions: Using a scale from 1 to 10, please indicate how much you agree or disagree with each of the following statements. For each statement please give a score from 1 to 10 for each of the brands. the more you agree, score closer to 10. The less you agree, score close to 1. Please give a score for each brand based on your impressions, even if you are not very familiar with the brand. The interviewer then read the statements for each brand. To assess the key concept of brand relevance, the statement read: This brand is appropriate and ts my lifestyle and needs.

Analyses and results

Dependent variables
The study employed four dependent variables matching the hypotheses to assess different attitudes towards national and private label brands. The rst 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 specic brands within the category. The rst variable was category sensitivity, an assessment of how important brands are to the buyers. The survey measured this by asking participants to respond to the following statement: As a consumer, each month you make many brand choices
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The rst 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 specic hypotheses, price sensitivity and brand relevance.

Private brand purchasing and demographics

Private brand buyers were identied 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

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Table 2 T-test results for category sensitivity

Category Orange juice National Private Cereal National Private Bottled water National Private
a

Mean

SD

df

rpba

312 63 227 16 250 44

7.57 5.62 7.10 5.69 5.87 4.00

2.25 3.09 2.77 3.14 2.97 2.87

4.7b

83

<0.0005

-0.32

<0.0005

1.9

241

0.052

-0.125

0.052

3.9

292

<0.0005

-0.22

<0.0005

rpb is the point biserial correlation reported here as an estimate of effect size. Equal variances not assumed. Note: The dependent variable is the response to the question, how much do you care about choosing between brands, where 1 = dont care at all and 10 = care very much?
b

months? Interviewers recorded the names of the brands mentioned, and we identied private brand buyers as those who named a private or store brand in response to this question. We identied 63 (23%) of the 279 orange juice consumers as private brand buyers, 16 (6.5%) of the 245 cereal consumers as private brand buyers and 44 (14%) of the 305 bottled water consumers as private brand buyers. We used cross-tabulation to assess the relationship between being either a private or a national brand buyer with four demographic variables: gender, age category, household size and household income. For the orange juice category, none of these analyses revealed statistically signicant (P < 0.05) relationships. For the cereal category, being a private brand buyer was associated with gender (c2(1) = 6.5, P = 0.019, C = 0.16). Of the 227 national brand buyers, 187 (82%) were women, but of the 16 private brand buyers, only 9 (56%) were women, and a full 44% were men. Age, household income and household size were not associated signicantly with cereal brand choice. For bottled water, being a private brand buyer was associated with being in an older age category (c2(2) = 6.3, P = 0.043, C = 0.14). Only 18% of private brand buyers were in the 1834 age category, while 37% of the national brand buyers were in the same age category, and 39% of private brand buyers were in the 50-plus category vs. only 27% of national brand buyers. This suggests a tendency for younger consumers to avoid private brands of bottled water. There were no statistically signicant relationships between being a private or national brand buyer and gender, household size or income. Thus, although some demographic differences can distinguish national from private brand buyers, these are not consistent across product categories, as might be expected. These relationships can be useful to those interested in understanding who the private brand buyers are in a specic product category, but they need to be supplemented by attitudinal differences to gain a better understanding of private brand buying. Moreover, demographics do not permit generalizations about private brand buying. Thus, the chief purpose of the present study was to assess hypothesized relationships between private brand buying and attitudes towards private and national brands on the premise that attitudes would be similar across product categories.

Private brand purchase and category sensitivity

The rst dependent variable was category sensitivity. Survey participants were asked to use a 10-point scale to describe how important brands were to their purchase decision. The means for the entire samples showed that orange juice (M = 7.15, SD = 2.59) and cereal (M = 7.0, SD = 2.81) were tied for brand importance, but that bottled water brands seemed to be less important to buyers (M = 5.56, SD = 3.0). 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. Table 2 compares the mean responses of the national brand buyers with the private brand buyers for each category. As Table 2 shows, for all three categories, national brand buyers had signicantly higher mean category sensitivity scores than the private brand buyers did. The differences for orange juice and bottled water were unambiguous. For cereal, the small number of private brand buyers compared with the number of national brand buyers attenuated the power of the test, even though the size of the difference in the means was the most pronounced. Thus, we can conclude that the analyses support the rst hypothesis: national brand buyers seem to care more about brand differences than private brand buyers do.

Private brand purchase and private label performance

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 reect how they felt about the performance of private labels. Cross-tabulating the responses with the two groups of buyers, national and private label, for each product category tested the hypothesis that both groups of buyers shared the same opinions about private label brand performance. For orange juice buyers, the test revealed a signicant relationship (c2(2) = 39.8, P < 0.0005, C = 0.36). While only 16% of national brand buyers felt that private labels performed very well and 28% felt that they do not perform well enough, the

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corresponding percentages for private label buyers were 52% and 5%. Finally, for the bottled water buyers, the relationship was also signicant (c2(2) = 12.9, P = 0.002, C = 0.21). Only 32% of national brand buyers said that private label bottled waters performed very well, while 59% of private label buyers indorsed this statement. Ten percent of national brand buyers said that private label bottled waters do not perform very well, but only 2.3% of private label buyers agreed. Once again, the small number of cereal private brand buyers undermined this test and there was no statistically signicant difference. Overall, the results support the second hypothesis; more private brand buyers have faith in the performance of private brands than national brand buyers do.

likely to vary by product category and brand, so it was measured for ve brands in each category. Tables 35 present the results of t-tests of the differences in means between national and private brand buyers for ve brands in each product category. Although the differences were not statistically signicant for all brands, 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 signicantly 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 conrm that part of the motivation for private brand buying is price.

Private brand purchase and national brand price sensitivity

The third hypothesis proposed that national brand buyers are more insensitive to price than private label buyers are. This tendency is

Private brand purchase and brand relevance

The nal 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

Brands Price sensitivity Tropicana National Private Minute maid National Private Sunny delight National Private Simply orange National Private Floridas natural National Private Brand relevance Tropicana National Private Minute maid National Private Sunny delight National Private Simply orange National Private Floridas natural National Private
a

Mean

SD

df

rpba

Table 3 T-test results for orange juice price sensitivity and brand relevance

213 63 213 62 213 63 211 63 212 63

3.87 3.33 3.45 3.23 2.54 2.33 2.81 2.86 3.34 3.25

1.21 1.08 1.26 1.03 1.50 1.22 1.39 1.16 1.22 1.19

3.2

274

0.002

-0.19

<0.0005

1.3

273

0.200

-0.08

0.20

1.1b

123

0.277

-0.06

0.33

-0.27b

119

0.790

0.015

0.81

0.49

273

0.624

-0.03

0.624

210 62 213 62 210 63 211 63 212 63

7.44 5.95 7.02 6.16 5.00 4.49 5.36 4.40 6.61 5.48

2.36 2.63 2.57 2.51 3.22 3.01 2.88 2.57 2.50 2.85

4.2

270

<0.0005

-0.25

<0.0005

2.3

273

0.021

-0.14

0.021

1.1

271

0.266

-0.068

0.266

2.4

272

0.017

-0.14

0.017

3.1

273

0.002

-0.18

0.002

rpb is the point bi-serial correlation reported here as an estimate of effect size. Equal variances not assumed. Note: Price sensitivity was measured by a 6-point scale where higher scores indicate price insensitivity and relevance was measured by a 10-point scale where higher scores indicated agreement that the brand was relevant to the buyers lifestyle and needs.
b

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Table 4 T-test results for cereal price sensitivity and brand relevance Brands Price sensitivity Cheerios National Private Special K National Private Kelloggs corn akes National Private Post raisin brand National Private Stores own brand of corn akes National Private Brand relevance Cheerios National Private Special K National Private Kelloggs corn akes National Private Post raisin brand National Private Stores own brand of corn akes National Private n Mean SD t df P rpba P

227 16 227 16 227 16 225 16 226 16

3.61 2.75 2.87 2.69 3.06 2.44 2.91 2.63 1.84 2.38

1.44 1.24 1.51 1.30 1.39 1.21 1.47 1.15 1.06 1.09

2.3

241

0.02

-0.15

0.02

0.46

241

0.64

-0.03

0.64

1.7

241

0.08

-0.11

0.08

0.75

239

0.45

-0.05

0.45

-1.95

240

0.052

0.13

0.052

226 16 227 16 227 16 226 16 227 16

6.76 5.63 5.78 6.19 5.41 6.00 5.77 5.75 4.17 5.38

2.89 2.73 2.91 2.95 2.79 2.68 2.89 2.57 2.86 3.12

1.5

240

0.13

-0.10

0.13

-0.55

241

0.59

0.04

0.59

-0.82

241

0.41

0.05

0.41

0.02

240

0.98

-0.00

0.98

-1.62

241

0.11

0.10

0.11

a rpb is the point bi-serial correlation reported here as an estimate of effect size. Note: Price sensitivity was measured by a 6-point scale where higher scores indicate price insensitivity and relevance was measured by a 10-point scale where higher scores indicated agreement that the brand was relevant to the buyers lifestyle and needs.

private brands. The results of the t-tests (see Tables 35) provide support for the hypothesis. For orange juice and bottled water, the mean 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 reversed (statistically signicant for the bottled water, but not for the cereal, where once again the small number of private label buyers attenuates the test). 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.

Discussion
The purpose of the present study was to investigate consumer attitudes towards private label brands by comparing national brand buyers with private label buyers. Adult consumers were interviewed by telephone concerning three product categories. Private

brand buyers were identied within each category based on their claims to have purchased these brands most often in the preceding year. Although a few demographic characteristics distinguished private brand buyers, these were not consistent across the categories. Comparing the attitudes of the private brand buyers with those of the national brand buyers within each category, however, provided support for four hypotheses derived from the literature. Compared with national brand buyers, private brand buyers in each category stated that they were less concerned or sensitive to differences in brands for all three product categories. The private brand buyers also expressed more faith in the performance overall of private brands than did the national brand buyers. When asked about ve specic brands within each product category, the national brand buyers were more price insensitive (willing to pay more) for national brands and the private label buyers were more price insensitive for private labels. Finally, when asked about these brands, the national brand buyers reported that they found national brands to be more relevant to their lifestyles and needs than the private brand buyers did, but the private brand buyers reported nding the private label brands to be more relevant than did the
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Brands Price sensitivity Dannon National Private Aquana National Private Dasani National Private Deer park National Private Local brand National Private Brand relevance Dannon National Private Aquana National Private Dasani National Private Deer park National Private Local brand National Private
a

Mean

SD

df

rpba

Table 5 T-test results for bottled water price sensitivity and brand relevance

252 44 251 44 249 44 252 44 251 43

2.88 2.86 3.39 3.14 3.16 3.07 2.58 2.75 2.83 3.44

1.27 1.05 1.23 1.00 1.32 0.95 1.32 1.16 1.22 1.05

0.09

294

0.93

-0.01

0.93

1.47b

68

0.15

-0.07

0.20

0.53b

76

0.60

-0.03

0.67

-0.78

294

0.43

0.05

0.43

-3.08

292

0.002

0.18

0.002

249 44 249 43 250 44 247 43 251 44

5.06 4.05 6.15 4.74 5.80 4.77 4.30 3.65 5.45 6.73

2.80 2.41 2.73 2.63 2.86 2.69 3.00 2.52 2.96 2.94

2.27

291

0.024

-0.13

0.024

3.13

290

0.002

-0.18

0.002

2.23

292

0.027

-0.13

0.027

1.35

288

0.179

-0.08

0.179

-2.65

293

0.008

0.15

0.008

rpb is the point bi-serial correlation reported here as an estimate of effect size. Equal variances not assumed. Note: Price sensitivity was measured by a 6-point scale where higher scores indicate price insensitivity and relevance was measured by a 10-point scale where higher scores indicated agreement that the brand was relevant to the buyers lifestyle and needs.
b

national brand buyers. These results have implications for three stakeholders. First, for managers of national brands, the results largely conrm what is generally known about these buyers. They are conscious of brands and their signicance, so they prefer to limit their buying to branded goods for the most part. They do seem to feel that branded goods perform better (have higher quality) than do private label equivalents. Consistent with this pattern, they are willing to pay more for branded products than they do, and they see specic national brands as reective of their needs and values. Most likely, the standard recommendations of theorists such as Quelch and Harding (1996) and Kumar and Steenkamp (2007) apply. These authors recommend such strategies for manufacturers as innovating new products not easily copied by the private labels, nd new distribution channels for branded goods, build strong brand images that consumers nd relevant, launch anker brands that compete on price, partner with retailers and other manufacturers to create combo products, and even become the producers of the private label goods themselves. It would be valuable for the
346

managers to better understand what aspect of a consumers nature leads them to nd the national brands more relevant to themselves. Recent research implies that the differences seen here between national and private brand buyers might be caused by an individual difference in the degree of engagement with brands (Sprott et al., 2009). Retailers, who are the primary force behind private labels, have incentives to give priority to their private labels because of their generous margins and the favour they gain from consumers. For them, the implications are clear: to continually improve and maintain quality (see Retail Forward, 2009), to keep the prices reasonable, to broaden the product line and to market aggressively (Safeway Inc. even distributes its private labels in other chains; Martin, 2009). Because it appears that when consumers use private labels, some of them are likely to remain loyal, aggressive sampling might encourage new customers to try and then buy. Publix, a large US grocery chain has begun a promotion where the store brand is given free with a purchase of its leading national competitor. Also, a recent poll of grocery shoppers reveals that having

International Journal of Consumer Studies 34 (2010) 339348 The Authors Journal compilation 2010 Blackwell Publishing Ltd

R.E. Goldsmith et al.

Consumers and private brands

switched to private labels because of the recession, most plan to continue to buy them (PR Newswire, 2009). The specic results of this study suggest that they can benet by developing a compelling image of their private labels that consumers will nd attractive. Finally, developing consistent imagery across categories can enhance the overall appeal of private labels. Consumer advocates are interested in promoting private brand purchase to enhance the economic well-being of consumers. For them, the results suggest that they can take advantage of the consistently improving quality of private labels to promote this feature. Private label buyers seem to be satised with the performance of these brands, so private brands do not need to be promoted exclusively on the basis of price. If possible, ways should be found to promote private labels as brands relevant to consumers needs and lifestyles, perhaps emphasizing the wisdom of buying them. This might be called a smart buyer theme that stresses how skilled the consumer is in the marketplace because he or she can get such good value for money. Another suggestion is to educate consumers by drawing attention away from the personality of brands, countering the efforts of marketers to distinguish what are often interchangeable products by giving them identities. For example, blind taste tests often reveal that consumers cannot identify their favorite brand, and that private label versions are frequently preferred when brand identity is hidden. Such demonstrations might persuade buyers to try private labels. If private brand buyers are less concerned with distinguishing brands, then this avenue might be a successful way to promote their use to other consumers. The study has both strong features and limitations. Because the data were collected from an advertising agencys panel members, the ndings have high generalizability to the US population of grocery store shoppers. The data were collected by professional market researchers, thus ensuring high data quality. The issues addressed in the survey were novel, thus adding unique new information to the growing literature on private branding. On the negative side, the survey used single-item measures instead of multiple items for each construct, thus limiting reliability. This limitation, however, might be of less concern given the nature of these constructs because there is some evidence that single items are adequate for this type of attitude study (Bergkvist and Rossiter, 2007). Although self-reports are the primary way researchers measure attitudes, identifying the private brand buyers by their self-reported brand consumption depends on respondent memory and willingness to respond. Actual purchase behaviour would provide a more valid way to assess this characteristic, although the common consumer pattern of buying multiple brands within a category would make any identication somewhat arbitrary. Finally, the results of the study are limited to the specic categories and brands in question.

mation may help consumer advocates in their efforts to persuade consumers to use private labels as a means of improving their overall quality of life.

References
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Conclusion
Our results are very consistent with previous studies and extend them as well. They conrm 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, conrming previous ndings. With additional research, this infor-

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Consumers and private brands

R.E. Goldsmith et al.

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