Rational and irrational behavior of Slovak consumers in the private label market

Ingrida Košičiarová,Zdenka Kádeková,Kristí­Na Predanocyová,Ivana Bulanda,Jana Rybanská,Milan Džupina,Ľubica Kubicová

doi:10.5219/1272

Abstract

Rational and irrational consumer behavior has already been the subject of several studies. Although their attention was mostly focused on traditional brands, these studies and their conclusions may also serve as a model for private label research, which is now increasingly coming to the forefront. Private labels are gradually becoming an adequate purchase alternative to traditional brands. The aim of the paper was to find out the influence of packaging and chosen marketing communication tools, on consumer purchasing decisions in the dairy segment. An anonymous questionnaire survey was chosen as the main research method, where participated 1,116 respondents from all over Slovakia; which was subsequently supplemented by the blind test involving 20 respondents under the age of up to 25 years. Seven chocolate-flavored yogurt samples were examined in the blind test; while the samples were such traditional brands by traditional producers as well as private labels. Interestingly, identical products were investigated - products from the traditional producer, both under its brand and under the retailer's private label. The results of our research proved some interesting findings - more than 28% of respondents buy private label products regularly and more than 53% buy them sporadically; whereas respondents do not buy private labels, mainly because of their lack of interest to try something new, assuming poor product quality and inadequate price; they buy them mainly because of lower prices compared to traditional product brands, comparable quality to traditional brands and good experience; respondents perceive private labels as good products of adequate quality and private labels evoke that products are adequate quality at a reasonable price. Although most respondents have no opinion on the packaging of private label products, more than 31% of them consider their packaging as unattractive and almost 36% think that their packaging does not affect them, but the results of the blind test partially refused this opinion.

Highlights

One of the modern and probably the most successful strategies of foreign as well as domestic retail chains and companies is to reach as many customers as possible, those customers for whom the price is decisive and those who prefer high-quality products when purchasing
An anonymous questionnaire survey was chosen as the main research method, where participated 1,116 respondents from all over Slovakia; which was subsequently supplemented by the blind test involving 20 respondents under the age of up to 25 years
The results of our research proved some interesting findings – more than 28% of respondents buy private label products regularly and more than 53% buy them sporadically; whereas respondents do not buy private labels, mainly because of their lack of interest to try something new, assuming poor product quality and inadequate price; they buy them mainly because of lower prices compared to traditional product brands, comparable quality to traditional brands and good experience; respondents perceive private labels as good products of adequate quality and private labels evoke that products are adequate quality at a reasonable price

Summary

Introduction

One of the modern and probably the most successful strategies of foreign as well as domestic retail chains and companies is to reach as many customers as possible, those customers for whom the price is decisive and those who prefer high-quality products when purchasing. All these requirements are to be met by private labeled products, whose share of household spending in Europe, especially in Slovakia, is constantly increasing (Figure 1). It is necessary to add the fact that private labels bring many disadvantages such as the possibility of damaging the companys reputation by a lower-quality product, resp. of knowledge of the original producer, which in many cases

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