Influence of brand equity on the price premium for private labels in fresh produce: A contingent valuation survey

Abstract

AbstractIn recent years, premium private labels for fresh produce grown with reduced use of synthetic pesticides and chemical fertilizers have been developed by Japanese general merchandise stores. In this paper, the brand equity factors that affect willingness to pay (WTP) for private label vegetables are identified using the contingent valuation method. We consider four key dimensions of brand equity, namely brand awareness, brand loyalty, perceived quality, and brand associations. We find that brand loyalty factors based on the psychology of consumers who seek value‐added vegetables with health and safety characteristics have the largest effect on the WTP premium. Providing shoppers with clear information about the key product attributes of reduced use of synthetic pesticides and chemical fertilizers is particularly important to generate brand equity for private label vegetables. [EconLit citations: Q130, M310].