Perceptual categorization of private labels and national brands

Purpose – This paper seeks to compare how brand users and non‐brand users currently position private labels and national brands in three packaged goods categories. It aims to provide guidelines for positioning strategies for both private labels and national brands through the outcomes. Design/methodology/approach – Data were collected in a telephone survey of 600 randomly recruited primary shoppers. Binary logistic regression was used to examine the informational cues consumers use to categorize private labels and national brands. The memory structures of users and non‐users of private labels were then separately modelled. Findings – Results suggest that the perceptual categorization into private label brands and national brands differs once private labels have been purchased. Users of private label brands did not see them as being any less trustworthy than national brands. However, non‐users of private labels did use trust to discriminate between the two types of brands, and tended to use negative attribute information to categorize the brands into groups. Regardless of experience, however, private labels form a subgroup in consumers' memory, with low price and low quality as the main drivers of this categorization. Originality/value – This paper extends past studies by measuring the perceptions of private labels as individual brands within a market, which more closely represents actual consumer memory structures. It also uses both positive and negative product attributes, which has not featured in prior work on private labels perceptions. The findings have implications for retailers looking to launch and manage private labels and manufacturers who need to compete with them.