Comparison of Perceptions of International and Local Premium Private Labels: A Qualitative Exploration of Premium Private Labels' Brand Equity in Finland

Abstract

Objectives

The main objectives of this study were to compare perceptions of international and local premium private labels in terms of brand equity, to find out brand equity dimensions for premium private labels, and to find out what types of effects the country of origin of a premium private label has on consumer-based brand equity.

Summary

Due to ever-increasing globalization and technological development, the retail industry around the world is going through important changes. One of the most important strategies for retailers is to differentiate themselves from other retailers by offering products that are not sold anywhere else. In past decades, it was a commonly held belief that exclusively sold private labels are the best strategy of gaining differentiation. However, it was soon realized that cheap prices and mimicking products are not enough for differentiation – the only private label capable of delivering differentiation between retailers was found to be premium private labels, which refers to private labels that are of superior quality and sold at higher prices.

Conclusions

The main findings of this study can be divided into three sections. First, consumers’ overall perceptions of local premium private labels tend to be more favorable compared to international premium private labels. Local premium private labels were perceived to be a safe, reliable and clean choice, thus being able to enjoy a price premium. Second, store image was found to be one of the most important determinants for the price premium of premium private labels, and it was added as the sixth dimension of consumer-based brand equity of premium private labels. Lastly, country-of-origin had clear effects on consumer-based brand equity as the local origin of a premium private label clearly increased consumers’ willingness to pay a price premium.