PLB Negative Publicity: Moderated by Extrinsic Cues

Abstract

Negative publicity (NP) of a Private Label Brand (PLB) may deteriorate consumers’ buying intention and perceived quality towards the PLB, along with the retailer store’s image. The rising involvement of consumers in the socials networks increases the damage of NP. The research purpose is to examine the influence of relying on extrinsic cues as a moderating factor and value for money (VFM) as a mediating factor on the NP’s final outcome. Survey participants (425) were randomly assigned to treatment and control groups to test the NP, and the moderation and mediation effects. The study employs factor analysis methods and paths analyses, Findings imply a direct negative effect of NP on PLB quality and PLB VFM, while PLB VFM mediates the relationship between PLB buying intention and store image. A moderation effect of extrinsic cues was found between PLB VFM and store chain image. The study contributes to the existing theory by the highlighting the role of extrinsic cues on the NP’s negative impact. Implication for retailers is, that extrinsic cues like price and publicity should be managed using a comprehensive view, especially in the arena of the social networks as a buffer against NP.