Consumer Evaluation of Private Label Branding Strategies

Private label brands (PLBs) have emerged as a global phenomenon and have created considerable interest among the scholars and practitioners. They have become a serious threat to national brands. Retailers regularly introduce PLBs to compete with national brands and other rival retail chains. While introducing a new product should retailers use an extended brand or a new brand? The existing branding theories do not provide a ready answer in the private label context. This study attempts to answer the question which launching strategy- extended brand or new brand- is effective in terms of eliciting favorable evaluations from customers? A quasi-experimental design was adapted to test the hypothesis that extended brand name will be more favorably evaluated than new brand name. The main independent variable branding strategies which is in two levels as Extended brand (E) and New brand (N), was paired with a blocking variable namely product type in two levels as Functional (F) and Prestige (P) product. These four experimental treatments (EF, EP, NF, NP) were manipulated by writing suitable brand descriptions and were presented to a random sample of 275 shoppers for evaluation. The evaluations were captured by a 7 item scale involving cognitive, affective and behavioral dimensions. A 5-point rating scale was used to record the responses. A 2x2 factorial ANOVA was performed to analyses the responses. The F ratios for branding strategies (F 1,271 = 3.902; p = 0.049), and for product types (F 1,271 = 7.890; p = 0.005) are significant beyond 5% level and the interaction (F 1,271 = 0.155; p = 0.694) is not significant. The results of this empirical study indicate that, in general, consumers evaluate brand extensions of private labels more favorably. The central contribution of this research is that Private label Extension (PLE) strategy appears to be more viable than new private label (NPL) strategy for retailers. While launching new products, retailers must consider brand extension as a vital guiding strategy since consumers respond more favorably to it.
It is important for the success of the study to look into what is published in the literature previously looking into consumer value and attitudes towards SMS marketing. This is vital for hypothesis, research question and problem statement formation as part of research methodology section. The study will be discussing the themes in various articles and groupings in the literature based on the theme.
The research methodology opted for a survey consists of 28 questions, based on the variables mentioned above. Different questions have been asked regarding the same variable across to get an unambiguous and reliable understanding behind each variable; this way it gave the option to test more of the variables using SPSS to determine their statistical significance. Due to the time constraint of the research the population and the sample size had to be curtailed though ensuring the quality of the results by bringing in variability and reliability in the data collection as normally done to overcome the small sample size and population. The sample of 50 participants was chosen before the results were exported into SPSS. This target was achieved as a total number of 50 respondents answered the survey which consisted of 19 females and 31 males which would enable the study to investigate the impact of gender and age on the variables mentioned above. Furthermore, in terms of the targeted age groups it was considered; that since every member of society who has a mobile phone is a potential recipient of SMS marketing messages the study should open the survey to all age groups. At the close of the survey, it was found that 60% of respondents were aged between 18 and 25 and 34% of respondents were aged between 26 to 34, thus since 94% of respondents were within the age category of 18-34 it gave a good insight on the perceived values and attitudes for teenagers and young adults in the UAE. This will be very beneficial for marketers in the UAE as they will be able to see based on this research findings if traditional SMS marketing methods could be used and the potential. implications or benefits encountered with the generation that is soon to dominate the workforce.
Population: The population for this study was focused on primarily the younger group mostly aged between 18-36 as it was evident from the literature review that most users of the mobile phones susceptible to SMS marketing belong to this group. The variation in sample based on different gender, age and regions were done to achieve research validity, reliability and repeatability to offset the limitation of small sample size due to time constraint however, another researchers could decide to increase the sample size and a larger population over a longerperiod unhindered by the time constraint which this study faced it would be interesting to see if their findings targeted at the same age and gender group would be the same.