Blinded or branded? Effect of brand cues on customer evaluation of store brands versus national brands in an emerging market

Abstract

The study attempts to understand the importance of brand knowledge (through extrinsic cues) in determining quality perception and brand preference for store brands and national brands through an experiment using 93 subjects and 744 evaluations for four products. Results suggest that extrinsic cues displayed by products drive consumers' (negative) evaluation of store brands by overshadowing their intrinsic characteristics. This observation is especially remarkable for products categories characterised by social consumption and high brand differentiation. Results indicate that shoppers' willingness to purchase store brands is dictated by their perception of private label brands offering value-for-money. Results also show that consumers assign better evaluation to national brands after knowing their identity. This is reversed in the case of store brands whose evaluation got worse after knowledge of brand. Store brands fare better than non-brands when consumers evaluate the two after knowing their sources. The results hold implications for retailers and manufacturers.