Consumer perception of private labels

Abstract

The study is aimed at identifying perceptions of consumers towards private labels. Private labels are defined as the retailer s own brands. These can be classified as generic, copycat, premium and value innovators. The share of private labels has been increasing across the world. Retail chains like Wal-Mart, Tesco, Carrefour etc. have successfully introduced private labels in many categories and these account for a major share of revenues for retail chains. In India, private labels were revolutionised by Pantaloons. Today many players like Westside, Food Bazaar, Shopper s Stop etc. have ventured into private labels in their respective categories. This study on was done for the apparel industry for the jeans category. The study revealed few hidden notions about private labels. Consumers try to equate the quality of private labels with the store image because of lack of awareness. So, retailers should adopt new strategies to increase awareness. Also, the perception about private labels differs between people who buy private labels vis-à-vis people who buy national brands. The study also found out that there are quality tiers within private labels and hence retailers can differentiae their private labels based on quality rather than just price. One of the important part of this study involved determination of attributes that govern the value perception of national brands and private labels. It was found that consumers value aspects like quality, fit, design and status value in a national brand. But when it comes to private labels, quality becomes the single most important factor. The report also gives strategic recommendations to retailers and manufacturers of national brands. We conclude by exploring areas for further research in private labels