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Is product innovation as effective for private labels as it is for national brands

Abstract As an innovation strategy for competing with private labels, national brands traditionally launch new products. However, retailers are now also launching new products, to differentiate themselves from their competitors and to add value to their consumer franchise. This article aims to learn to what extent private labels influence consumer adoption of new products and to ascertain how consumers’ experiences with private labels affect their acceptance of new products. The results show that generally, private labels positively affect consumer adoption of new products, as measured by both the trial purchase level and the repurchase rate. However, a mixed effect is observed for households that have more experience with private labels. This research provides a more complete explanation of current market dynamics and clarifies the strength of the competitive advantage that national brands enjoy over private labels when launching new products.

Shopper marketing: a new challenge for Spanish community pharmacies.

BACKGROUND Changes that have occurred over the past few decades in retailing and in the health care sector--namely, a drastic reduction in drug profit-margins, and a more critical use of health services by patients--have created a scenario characterized by rising competitiveness. This new context is necessitating community pharmacies (hereafter, pharmacies) to improve their business model through new strategies. Shopper marketing has proven invaluable in other retail settings and therefore, could be a critical element for new practices in pharmacies. OBJECTIVES First, to analyze how shopping experiences in pharmacies based on new practices in shopper marketing affect shopping behavior. Second, to study the mediating effect of customer satisfaction on the relationship between shopping experiences and shopping behavior. METHODS A self-reported questionnaire was developed to measure four concepts: hedonic experience (enjoyable), functional experience (goal-oriented), customer satisfaction and shopping behavior. Data were collected from 28 different pharmacies dispersed throughout Spain. Structural equation modeling (SEM) was used to test the relationships in the theoretical model. First, the measurement model was estimated to assess model fit, reliability, convergent and discriminant validity. Then, the parameters of the structural model were estimated and the mediation effects were subsequently tested. RESULTS Functional experience and hedonic experience each significantly and positively correlate with consumer satisfaction and with customer shopping behavior (purchases and loyalty). Moreover, the effects of each type of experience on shopping behavior are partially mediated by customer satisfaction. CONCLUSIONS The results suggest that even in Spanish pharmacies, which have traditionally been considered as strictly functional retailers, ensuring customer satisfaction and enhancing shopping behavior now demand more than just functional experiences. Moreover, a customers experience at a pharmacy can itself trigger a shopping cycle; therefore, pharmacists should consider prioritizing investments in hedonic experiences.

The Effect of Product Innovation, Promotion, and Price on Consumer Switching to Private Labels

The channel conflict that exists between retailers and manufacturers of branded products has dynamically shifted as large retailers have expanded their offerings of private label products. This study investigates the ability of consumer packaged goods companies to exert influence in the channel by testing which marketing initiatives implemented by manufacturer brands are more efficient in preventing consumer switching to private labels. We use a hazard model to simultaneously measure the effects due to product innovation, promotion, and price on consumer switching and how strong those effects are. We find that as expected product innovation, promotion, and price exert a negative effect on the consumer likelihood of switching to private labels. However, we find the strongest effect on promotion suggesting the importance of understanding how consumers perceive value in the national brands offer.

Consumers Switching to Store Brands: Is Product Innovation Effective to Prevent it?

Product innovation is a critical activity for CPG companies to add value to consumers, enhance the equity of their brands and also to fight store brands. The purpose of this paper is to better understand whether product innovation is an effective strategy to prevent consumers switching to store brands and compare its effects to other marketing tools as promotion and price gap management.

It Is not the Awareness But the Familiarity! Revisiting Private Labels’ Brand Equity: An Abstract

Interest in private labels has increased and identifying factors that build private labels’ brand equity is a priority for academics and retailers (De Wulf et al. 2005; Cuneo et al. 2012). However, research into private labels’ brand equity is very recent and the few existent studies have not been able to empirically contrast the difference between brand awareness and brand associations (Beristain and Zorilla 2011; Cuneo et al. 2012; Calvo-Porral and Levy-Mangin 2014).

To Retain or to Recover National Brand Consumers? Effects of Price, Promotion and Product Innovation Strategies

This study addresses consumer switching between private labels and national brands. We empirically test the efficiency of product innovation, non-price promotions, and the price gap on two consumer-switching situations: recovering consumers that national brands lost to private labels and preventing consumers of national brands from migrating to private labels. We compare the effectiveness of these strategies using a Hazard model to simultaneously measure the effects on each consumer-switching situation. We find that the marketing strategies studied have different levels of effectiveness depending on whether the objective is to retain consumers or recover consumers lost to private labels. For example, reducing the price gap is a more effective strategy to prevent consumers from switching than to recover consumers from private labels. These results pose interesting managerial implications for both national brands and private labels.

Need for Touch and Multichannel Search and Purchase

This paper firstly analyses the relationship between the consumer’s need for touch and the channels used during search and purchase stages. The focus will be the fashion industry, characterised by offering highly hedonic products, where great importance is placed on the sense of touch. Secondly, the moderating effects produced by the type of touch (autotelic / instrumental) and by the types of shopping task (goal-oriented / experiential-oriented) are also analysed.

Autotelic and Instrumental Need for Touch: Searching for and Purchasing Apparel Online

Apparel is considered to be a category where haptic cues play a key role in evaluating product properties, and yet the consumer buying process in said retail channel is hindered by restricted product experience and evaluation due to the intrinsic absence of haptic options. The current research seeks to gain deeper insights into the knowledge and understanding of consumer autotelic and instrumental need for touch (NFT] in the search and purchase stages of buying apparel online. Using a self-reported questionnaire, data were collected from 227 subjects. Results indicate that consumers high in autotelic NFT and instrumental NFT show a lower likelihood to purchase apparel online. Also a significant moderating effect for utilitarian shopping orientation and instrumental NFT on online apparel search and purchase was also found. These findings have important implications for online retailers since overcoming the lack of NFT remains a major obstacle in the adoption of this channel. In addition, directions for future research are suggested.

Why is it Important for Private Labels to Innovate? : The Effects on Trust and WOM.

There is growing evidence that private label brands have become more innovative (DelVecchio, 2001; Mintel, 2009). Private labels have been considered of special importance in recent years for retailer strategy and have clearly evolved through time. Private labels are becoming more sophisticated and are delivering a broader and more complex portfolio (Kumar and Steenkamp, 2007). The latest generation of private labels is positioned around innovation and quality. They originated in the UK, where they are critical for the strategy of some of the most important retailers (Burt, 2000; Verhoef et al., 2004). Despite this new trend, the impact of private label innovativeness on store image and customer relationships has not yet been investigated. The purpose of this paper is to examine how consumer perceptions of private-label innovativeness influence retailers’ store image and their relationships with their customers.

El valor intangible de la innovación de las marcas del distribuidor

Private labels have experience extraordinary growth worldwide, reaching in Spain a market share close to 40%. Private labels have clearly evolved over time increasing the range, developing a more sophisticated portfolio and in many cases adopting innovation and quality improvement strategies. The objectives of this paper are: firstly to investigate consumer perceptions of private-label innovativeness and secondly to analyze how these perceptions influence the creation of intangible assets related to the perception of private labels, retailers and other consumers prescriptions.