Abstract

Store brands, also known as private labels, own brands or retail brands, are experiencing a remarkable growth in various product categories and their acceptance by consumers seems to be unquestionable. The key drivers of the store brands’ success are the increased concentration in retailing, consumers’ much more positive attitudes towards the quality of store brands and critically, in the current economic downturn, their price, which is significantly lower than that of manufacturer brands. Sales of store brands in the Southeast European markets have not picked up yet, making these markets a compelling space to study, analyze and predict the future of store brand growth and success. Thus, this study focuses on consumer’s attitudes towards store brands in the Federation of Bosnia and Herzegovina – an emerging market, which is highly attractive for international retailers. The main objective of this study is to analyze and validate the profile of a consumer of store brands in the Federation of Bosnia and Herzegovina in the context of personal care products. For the purposes of this study, the mall-intercept survey was carried out at selected hypermarket locations. Based on the extent to which consumers perceive themselves to be consumers of store brands, three consumer segments have been identified: heavy buyers, sometimes buyers and seldom buyers. These segments were then described in terms of perceived quality and price of store brands as well as demographic characteristics of respondents. The findings allow drawing some useful reflection about who are the buyers of store brands in the Federation of Bosnia and Herzegovina and what drives their preferences towards store brands. Thus, this study provides valuable information for both retailers and manufacturers.

Highlights

  • There has been a remarkable growth in numerous product categories such as store brands, private labels, own br[nds or ret[il br[nds, which h[s h[d [ signific[nt influence on the consumers’ [ccept[nce, which h[s especially been evident in the case of non-durable goods, accompanies by a steady increase of the store brands share in the global market

  • Results indicate that many consumers believe that store brands are suitable as gifts. It seems that heavy buyers are aware of the quality of the store brands, so, they feel comfortable in buying them for themselves, and do not avoid buying them as gifts. This is not in the line with the findings reported by Lybeck et al (2006), who argue that heavy buyers of store brands tend to avoid buying store brands for other as gifts, even though they do not perceive any significant differences between store brands and manufacturer brands in term of quality and risk of purchasing

  • In line with past studies (Blattberg et al, 1980; Ailawadi et al, 2001; Omar1996; Martinez & Montaner, 2008), we verified that psychographic traits as well as demographic characteristics can be used as variables

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Summary

Introduction

There has been a remarkable growth in numerous product categories such as store brands, private labels, own br[nds or ret[il br[nds, which h[s h[d [ signific[nt influence on the consumers’ [ccept[nce, which h[s especially been evident in the case of non-durable goods, accompanies by a steady increase of the store brands share in the global market. According to the latest Private Label Manufacturers Association (PLMA) yearbook, store brands account for at least 40% of fast-moving consumer goods sold in Switzerland, Spain, United Kingdom, Germany, Portugal and Belgium (PLMA, 2013). Despite the overwhelming evidence in favor of the development of store brands - greater profitability, store differentiation and store loyalty (Corstjens & Lal, 2000), store brand penetration in Southeast European markets is still much lower than it is in Western m[rkets (Horv[t & Ozretić-Došen, 2013). This study focuses on consumer attitudes towards store brands in Federation of Bosnia and Herzegovina - an emerging market with a significant growth potential for store brand development

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