Hypothesis
"Motivating purchase of private brands: Effects of store image, product signatureness, and quality variation"
• H1. Store image has a positive effect on consumers' quality perception of a store's private.
• H2. Product Signatureness has a positive effect on consumers' quality perception of a store's private brands.
• H3. Quality variation has a negative effect on consumers' quality perception of a store's private brands.
• H4. Consumers are more prone to buy a private brand with a higher perceived quality.
(Authors: Bao et al.),(Vol.64),(Issue: 2 ),(Year: 2011)
Journal of Business Research 64 (2011) 220–226
Presented By:
Sir Sheeraz
Presented To:
Akasha Butt (22)
Aneeta Rafiq (23)
Private Brands Vs National Brands
• H5. Besides its indirect effect through quality perception, store image has a positive direct effect on consumers' intention to purchase store brands.
• H6. Besides its indirect effect through quality perception, product Signatureness has a positive direct effect on consumers' intention to purchase store brands.
• H7. Besides its indirect effect through quality perception, quality variation has a negative direct effect on consumers' intention to purchase store brands.
• H8. Value Consciousness positively moderates the effects of quality perception purchase intention so the effects are stronger for consumer with greater value consciousness.
Research Methodology
Data was Collected for different Strores
- (CVS,RiteAid)
Drug Stores
- (Best Buy,Radio Shack) Electronic Stroes
Exploratory Quantitative Research Method:Survey Research
(Sample size: 750 participants )
(Mean Age group: 41 yrs)
(Response rate: 44% )
Facts About Private Brands
- Worldwide private brands hold 17% of the total market share
- Competitive Threat
- Low price …less promotion
- Globally Price 31% low than national brands
- Stylized perception of low quality
- Deter expansion of a retailer brand
Research Methodology
Measures:
Construct Validity
- CFA Model (reliability and validity)
- EFA Model
Data Analysis
Structural equation modeling (SEM) using AMOS
Key Terms
- Private brands
- Store image
- Product signatureness
- Quality variation
- Quality perception
- Purchase intention
- Value consciousness
Measures Of Variables
Literature Review
Store brands compete for consumer perception :
Quality Perception & Value-consciousness
- Determines the proneness of consumer to buy a private brand but also market share
- Consumer seek value from buying
Thus, emphasize more on to quality than positioning on low price.
Enhancing Quality perception by:
- Increasing quality of the brand and encourage consumer’s experience by sampling
- Advertising extensively
Expensive
Objectives
To Propose an alternative approach based on the selection and utilization of the extrinsic cues of private brands.
“Consumers tend to rely more on extrinsic than intrinsic cues to judge a private brand quality” (Richardson et al., 1994).
Specifically examine the effects of intangible extrinsic cues on consumer quality perception and purchase intention of private brands.
Research Justification: Why Intangible?
Research Findings
Previous Literature focuses on three common tangible extrinsic cues —package design, price, and brand name but all three couldn’t generate the intended outcome.
- Store image and Product Signatureness increases the Purchase Intention of private brands.
- Quality Variation decreases the Purchase Intention.
- Perceived quality can also enhance the purchase intention of value-conscious customers as well as increase the brand loyalty.
Managerial Implications/Conclusion
Conceptual Framework
- Cue Utilization Theory
(Olson and Jacoby, 1972)
Consumer rely on both
Extrinsic & Intrinsic cues
to infer product quality
- Richardson et al. (1994)
Consumer tends to attach more weight to Extrinsic cues to evaluate store brand quality
- Predictive & confidence value
(Oloson & Jacoby,1974)
- Advise for retailers to reposition their private brands.
- It suggests that low Quality Variation is suitable for Private Brands.
- Better for a retailer to enter in a market that is strongly associated with consumer’s mind.
- A retailer can develop an strategies on three intangible cues to increase Perceived Quality.
Research Limitations
- Focused only three extrinsic intangible cues which are smaller part of a great verity of product.
- Other product cues (product assortment of a store, retail competiveness, new brand name and store placement) can be discussed.
References
- Aaker DA, Keller LK. Consumer evaluations of brand extensions. J Mark 1990;54:27–41 January.
- Abe M. Price and advertising strategy of a national brand against its private-label clone a signaling game approach. J Bus Res 1995;33(3):241–50.
- A.C. Nielsen. The power of private label 2005: a review of growth trend around the world; 2005.
- Ailawadi KL, Keller LK. Understanding retail branding: conceptual insights and research priorities. J Retail 2004;80:331–42.
- psychological research: conceptual, strategic and statistical considerations. J PersSoc Psychol 1986;51:1173–82 December.
- Batra R, Sinha I. Consumer-level factors moderating the success of private label brands. J Retail 2000;76(2):175–91.