Private label and manufacturer brand choice in a new competitive reality: Strategic directions and the future of brands

Abstract

The significant expansion and transformation of private label brands (PLBs) in many categories and markets worldwide have dramatically modified the competitive reality of the marketplace resulting in a new configuration of the brand landscape. This phenomenon has also contributed to the emergence of divergent brand choice patterns among consumers. By segmenting brand buyers on the basis of their brand choice behavior and psychographics, specifically lifestyles, we uncover four consumer segments purchasing different mixes of brand typologies, namely, top-tier and second-tier manufacturer brands as well as PLBs. Each segment exhibits different motives underlying its brand choice pattern. Identifying these diverse and unique brand choice patterns and the drivers of them has meaningful strategic implications for retail managers on how to incentivize PLB choice and for manufacturer brand managers on how to combat PLB growth. Finally, we discuss how the identification of consumer segments exhibiting distinct brand purchase patterns may have implications for the future of brands and brand management.