The effect of retailer private brands on consumer-based retailer equity: comparison of named private brands and generic private brands

Abstract

This study investigated the effect of a private brand (PB) with retailer's name versus a generic brand on retailer equity and loyalty. Retailer equity was conceptualized as four dimensions: retailer awareness, retailer association, perceived quality, and retailer loyalty. Applying categorization theory, a conceptual framework was tested to investigate whether the PB with retailer's name influenced retailer equity. A survey was conducted using a college student sample. An experimental design was used to collect data which included two conditions (PB with retailer's name and generic product) and a control group. The effect of PB on retailer awareness, retailer association, and perceived quality was measured by multiple group analysis through structural equation modeling. Results confirm that PBs with retailer's name influenced three of the four dimensions of retailer equity more strongly and positively than did generics. However, the total effect of awareness, association, and perceived quality on retailer loyalty did not significantly differ between the PB and the generic PB. Finally, this study verifies the associative relationship among the four dimensions of brand equity. The contribution of the study is that it demonstrates the distinct effects on retailer equity of the PB with retailer's name versus the generic PB. In addition, this study confirmed retailer equity's four underlying constructs: retailer awareness, association, perceived quality, and loyalty.