KOREASCHOLAR

46 2016 Global Marketing Conference at Hong Kong Proceedings: 46-47 (July 2016) http://dx.doi.org/10.15444/GMC2016.01.04.01 WHY DO CONSUMERS BUY PREMIUM PRIVATE LABELS? – SOME QUAL-ITATIVE INSIGHTS Olivier Reimann, University of Vienna, Austria1) Udo Wagner, University of Vienna, Austria2) ABSTRACT Private labels (PL) have developed remarkably well during the last two decades. In many Western European countries they achieved market shares of around 30 percent and more. A phenomenon that recently gained momentum in academia and practice are premium PL (PPL). That are PL positioned as “better and cheaper” or “higher in price and superior in quality” compared to the leading NB. However, with regard to the perceived quality gaps consumers attributed economy and standard PLs vis-à-vis national brands (NB) in the past, it appears contradictory that PPL could become “one of the hottest trends in retail-ing”. To the best of the authors’ knowledge no study published up to now has addressed the following research question: Why do consumers prefer PPL over NB or other PL tiers. The present work tries to provide some insights into this research gap. We conducted two empirical research projects which aim at shedding some light on po-tential drivers of PPL product choice. Both projects are field studies with two leading grocery retail chains in a Central European country as research objects. In this country, the grocery retail market is characterized by a relatively high PL market share (29 percent in 2013) and a high concentration of retailer power: in 2014 the top three retailers cov-ered 85 percent of the overall market. Project I conducted focus group interviews. Partici-pants discussed about economy PL, standard PL and PPL products. Participants debated whether / under which circumstances they would choose one of these PL tiers or a NB. Research project II consisted of semi-structured interviews conducted with consumers in stores. The study revealed major determinants of PPL product choice: (1) quality and price, (2) packaging, (3) origin, and uniqueness, and (4) co-branding. We also gained some insights into the role of psychographics and demographics, brand management and communica-tion as well as on store loyalty. Disadvantageous for retailers, the reasons for PPL prod-uct choice are mainly not PPL brand related. PPL shoppers search for intrinsic or extrin-sic cues and would buy any other brand that offers a similar product. However, the find-ings for co-branding PPL showed that suggestions to apply traditional branding strategies in order to increase (premium) PL success should gain more attention from academia and retailers.

• Olivier Reimann(University of Vienna, Austria)
• Udo Wagner(University of Vienna, Austria)