Consumer-level factors moderating the success of private label brands

Abstract We examine how different determinants of perceived risk help explain variations in purchasing preferences for national brands versus private label (store) brands (PLBs), across twelve different product categories. Such intercategory differences are the most important source of variation in PLB share across markets, retailers and categories (Dhar and Hoch, 1997) , but little prior consumer-level research has thus far tried to explain these crucial variations. Supporting theory-based expectations, we find that PLB purchases in a category increase when consumers perceive reduced consequences of making a mistake in brand choice in that category, and when that category has more “search” than “experience” characteristics. Theoretical and managerial implications of these results are discussed, especially the important role played by “experience” attributes in leading consumers to favor national brands over PLBs.

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