Private label brands: measuring equity across consumer segments

Abstract

PurposeThe aim of this paper is to provide evidence that private label brands (PLB) have the ability to build brand equity as they develop, and to determine whether the capitalization of PLB equity varies across consumer segments and product categories. The paper builds on previous research incorporating consumer‐level factors, showing their relevance as key determinants of PLB choice.Design/methodology/approachThe brand choice model used is a multinomial logit model (MNL) calibrated with a consumer panel database of two product lines of yoghurt from 8,000 Spanish households for a three‐year period.FindingsIt is shown that PLB have been able to build brand equity throughout their development, across product categories; however, brand equity is capitalized across only some consumer segments. The use of consumer‐level factors to segment the market prior to measuring brand equity is necessary to allow the identification of consumer groups where equity is created.Practical implicationsFindings provide key directions to PLB managers regarding how to determine, approach and leverage the equity of their PLB across different consumer segments and product categories.Originality/valuePrior research has attempted to measure PLB equity using product/brand factors and market factors, but without considering consumer‐level factors. In this research, consumer‐level factors, specifically consumer demographics, are incorporated into the analysis, and equity is measured across seven different consumer segments for two product lines.