ARE CONSUMERS MORE LOYAL TO NATIONAL BRANDS THAN TO PRIVATE LABELS?
Article first published online: 9 JUL 2012
© 2012 The Authors. Bulletin of Economic Research © 2012 John Wiley & Sons Ltd and the Board of Trustees of the Bulletin of Economic Research
Bulletin of Economic Research
Volume 65, Issue Supplement s1, pages s1–s16, May 2013
How to Cite
Bergès, F., Hassan, D. and Monier-Dilhan, S. (2013), ARE CONSUMERS MORE LOYAL TO NATIONAL BRANDS THAN TO PRIVATE LABELS?. Bulletin of Economic Research, 65: s1–s16. doi: 10.1111/j.1467-8586.2012.00459.x
- Issue published online: 7 MAY 2013
- Article first published online: 9 JUL 2012
- demand elasticity;
- national brands;
- private labels
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.