garretson et al., 2002

Antecedents of private label attitude and national brand promotionattitude: similarities and differences

Judith A. Garretsona,*, Dan Fisherb, Scot Burtonc

aDepartment of Marketing, E.J. Ourso College of Business Administration, Louisiana State University, Baton Rouge, LA 70803, USAbDepartment of Marketing and Transportation, Sam M. Walton College of Business, University of Arkansas, Fayetteville, AR 72701, USAcDepartment of Marketing and Transportation, Sam M. Walton College of Business, University of Arkansas, Fayetteville, AR 72701, USA

Abstract

A model that addresses the similarities and differences in conceptual antecedents of attitudes toward private label grocery products andnational brand promotions is proposed and tested. The proposed model is tested using a sample of 300 consumers who were recruited fromgrocery stores, provided behavioral data from sales receipts of their shopping trip, and responded to a survey that contained multi-itemconstruct measures. We predict and find in the study that both price and nonprice related constructs impact both private label attitude andnational brand promotion attitude, but the directionality and strength of several of these relationships differ. Implications of these findingsfor retailers and national manufacturers are discussed. 2002 by New York University. All rights reserved.

Introduction

Since price deals on grocery items are offered in variousforms, consumers wanting to save money at grocery retail-ers have a number of alternatives from which to choose. Forinstance, consumers can redeem manufacturers coupons,take advantage of a stores advertised specials, search forshelf or display discounts, or buy private label brands.Broadly, however, consumers seeking to save money havetwo options. They can seek a national brand being marketedon deal. Alternatively, they can opt for a private label brandthat is typically priced below nonprice promoted nationallybranded goods.

Although deal or private label prone consumers sharethe goal to save money when they shop, we know littleabout the extent to which their savings behaviors sharesimilar patterns. Numerous prior studies have addressedthe characteristics of the deal prone shopper or the pri-vate label prone consumer separately (see Batra andSinha, 2000; Richardson, Jain, and Dick, 1996; Blattbergand Neslin, 1990). While a recent study by Ailawadi,Neslin, and Gedenk (2001) has identified some generalsimilarities and differences between the two groups, this

field of inquiry remains ripe for further exploration.Questions regarding why consumers with a common goalto save money have different attitudes toward and pur-chasing habits for national brand deals and private labelbrands remain unanswered.

The purpose of this research acquires particular rele-vance when the strategic implications are considered.Price oriented customers play an important role in affect-ing the balance of power between national brand manu-facturers and retailers. Retailers may employ their privatelabels strategically to decrease the space available fornational brands. They may also use private labels topressure manufacturers to compete more vigorously onprice in order to win back share lost to the private label.At the same time, the national brand manufacturer maybe seeking means to counter the increasing private labelincursion without eroding brand loyalty through exces-sive price promotions.

We believe that understanding more about why priceoriented consumers have different attitudes toward privatelabels and national brand promotions will have importantimplications for both manufacturers and retailers in theirbattle for this target market. Toward this end, we proposeand test a model that addresses the similarities and differ-ences between consumer attitudes toward national brandpromotions and private label brands and identifies whetherany distinctions affect brand loyalty.

* Corresponding author. Tel.: 1-225-578-6539.E-mail address: [email protected] (J.A. Garretson).

Pergamon

Journal of Retailing 78 (2002) 9199

0022-4359/02/$ see front matter 2002 by New York University. All rights reserved.PII: S0022-4359(02)00071-4

Two perspectives: national brand manufacturers andretailers

The relationship between manufacturers and retailers canbe characterized as both one of dependency and a strugglefor channel control. This curious amalgam creates uneasyalliances between the parties as they need each other and yetsimultaneously compete to maximize their share of channelprofit. Manufacturers build their power through customerloyalty. Loyal consumers are more likely to pay full pricefor their favorite brands and look for them in any store theyshop. If not found, they may shop elsewhere. If enoughconsumers act in this manner, retailers will be compelled tocarry the national brands and be vulnerable to terms notopen to much negotiation.

Retailers acquire power similarly through the strengthof their appeal to consumers. In recent years, privatelabel brands have aided this end by building uniqueconsumer interest in their stores. One consequence is thatprivate label brands now comprise 20% of all unit salesin the grocery channel in the United States. They alsorepresent a large portion of the current growth in super-market sales (Thompson, 1999) and occupy higher unitmarket share than the top national brands in 77 out of 250categories (Kahn and McAlister, 1997; Quelch and Har-ding, 1996; Wellman, 1997). Some forecast that privatelabels might attract 40% or more of US supermarket sales(Denitto, 1993). Since private labels typically carry ahigher per unit margin than national brands, retailershave an additional incentive to extend their proprietaryitems.

A common response to private labels by manufacturershas been to increase promotional spending in attempts tohalt the migration of value-conscious consumers. Sales pro-motions in recent years have accounted for an overwhelm-ing 74% of the total marketing budget of US packagedgoods manufacturers, an increase of 9% in the past decade(Cox Direct, 1998; Ailawadi, Neslin and Gedenk, 2001).While evidence suggests that national brand promotions,such as coupons, are effective deterrents of private labelpenetration (Sethuraman and Mittelstaedt, 1992; Blattbergand Wisniewski, 1989), other studies indicate that signifi-cant and frequent price promotions on national brands mayerode brand loyalty (Gedenk and Neslin, 1999). If sucherosion results, national brand counteroffensives to privatelabels may diminish brand loyalty. Procter and Gamblesattempted move to value pricing was based partially on thebelief that their promotions were undermining brand loyalty(Shapiro, 1992).

Arguably, there may be both significant economic andnoneconomic similarities and differences between con-structs that influence consumer attitudes toward nationalbrand promotions and private label brands. Value con-scious consumers are interested in saving money, ofcourse, but the monetary savings gained from buying anational brand on promotion (when available) versus a

private label brand may often be negligible. While theaverage private label brand retails for about 30% lessthan the national brand (Sethuraman, 1992), nationalbrand promotions typically deliver price discounts of 20to 30% (IRI Marketing Fact Book, 1996; Ailawadi, Nes-lin and Gedenk, 2001). This indicates the possibility offactors other than price at work that lead consumers tohave more favorable attitudes toward deals or privatelabel brands.

The proposed model: rationale and hypotheses

Private label attitude and national brand promotionattitude

Similarities or differences in consumer reactions to na-tional brand promotions and private labels may be ascer-tained by identifying antecedents to them both. As shown inFig. 1, we propose a set of such antecedents and hypothesizetheir effects on private label attitude and national brandpromotion attitude.

Value consciousness has been defined as a concern forpaying low prices subject to some quality constraint(Lichtenstein, Ridgway and Netemeyer, 1993, p. 235).Similarly, product value is often characterized as theratio of the perceived quality of a product divided by theprice paid for that product (Zeithaml, 1988). For privatelabel brands, promotional messages used by retailers of-ten focus on encouraging consumers to use product valueas the determinant attribute in private label evaluations,rather than absolute quality perceptions or quality infer-ences associated with national brand names. It also hasbeen suggested that where consumers balance price andquality there is a more favorable attitude toward privatelabels (e.g., Deveny, 1993; Liesse, 1993). Thus, given theliterature on price and value relationships (Zeithaml,1988) and empirical research that has identified value-related measures as positively related to private labelattitude (Burton et al., 1998; Richardson, Jain and Dick,1996), we conclude that consumer value consciousnessshould directly and positively affect attitudes toward pri-vate label products.

For promoted national brands, research drawing fromacquisition-transaction utility theory (Thaler, 1985) indi-cates that consumers with favorable attitudes toward dealstend to be value conscious (Blattberg and Neslin, 1990;Garretson and Burton, 1998), but do not necessarily con-sider a price reduction as a sign of poor product quality(e.g., Blattberg and Neslin, 1990; Lichtenstein, Ridgwayand Netemeyer, 1993). Arguably, they do not attribute atemporary price deal for a nationally branded product asindicative of a reduced level of quality, thus acquisitionutility is not affected. From this, we anticipate that thecombination of the original price cue (i.e., the normal retailprice consumers use as a reference) and the brand cue offset

92 J.A. Garretson et al. / Journal of Retailing 78 (2002) 9199

negative perceptions that could be attributed to the product.As such, we believe that consumers attitude toward na-tional brand promotions will also be directly and positivelyinfluenced by value consciousness.

Hypothesis 1a: Value consciousness will have a positiveeffect on private label attitude.

Hypothesis 1b: Value consciousness will have a positiveeffect on national brand promotion attitude.

While we expect value consciousness to influence bothprivate label attitude and national brand promotion atti-tude positively, we believe that a price-quality associa-tion will negatively impact private label attitude andpositively affect national brand promotion attitude. Thisprice-quality construct has been defined as the general-ized belief across product categories that the level of aprice cue is related positively to the quality level of theproduct (Lichtenstein, Ridgway and Netemeyer, 1993).Drawing from attribution theory (Sawyer and Dickson,1984), a low price for private label brands may be attrib-uted to some problematic aspect of the product, which isthen perceived as inferior in the overall level of quality.

Such concerns have led many retailers and private labelmanufacturers in the U.S. to focus upon improvements inquality and, where possible, demonstrations of quality(Dhar and Hoch, 1997). Still, the continuously low pricescombined with the infrequent professionally developedadvertising campaigns might offer more evidence forthose who associate price with quality that private labelbrands are undesirable.

In contrast to the predicted negative effect of price-quality association on private label attitude, we expectthat price-quality association will positively impact indi-viduals general attitude toward national brand promo-tions. Behavioral evidence for this effect is found inBlattberg and Wisniewskis (1989) discovery of asym-metric price competition. Price deals on higher-price,higher quality brands are found to steal share from com-parable brands in the same price-quality tier and alsofrom lower tier brands, including private label brands.Price promoted lower-tier brands, however, do not stealshare away from higher tier brands, but only impactcomparable brands within their own price-quality tier.

Fig. 1. Conceptual model of the antecedents of private label attitude and national brand promotion attitude.

93J.A. Garretson et al. / Journal of Retailing 78 (2002) 9199

Unlike for private label brands, the low price representsa temporary price reduction and national advertising cov-erage serves to reaffirm positive attributes and quality,making the reduced price unlikely to be attributed toinferior quality. Based on the above discussion, the hy-potheses concerning price-quality association are offeredbelow.

Hypothesis 2a: A price-quality association will have anegative effect on private label attitude.

Hypothesis 2b: A price-quality association will have apositive effect on national brand promotion attitude.

In addition to more rational price-perception variables,more ego-related variables are directly and positivelyexpected to impact private label attitude and attitudetoward national brand promotions. Recent empirical re-search in sales promotion has identified the potentialimportance of these types of variables (Ailawadi, Neslin,and Gedenk, 2001; Chandon, Wansink, and Laurent,2000). One such psychological construct is smart shopperself-perception, an ego-related variable pertaining to con-sumers need for intrinsic rewards from price savingsachieved through shopping (Schindler, 1992). Unlike thepsychological constructs including mavenism and inno-vativeness addressed in the research reported by Aila-wadi, Neslin and Gedenk (2001), smart shopper self-perception represents more ego-related benefits such as asense of accomplishment, a boost in self-esteem, andpride in shopping savoir fare (Mano and Elliott, 1997;Schindler, 1988). Previous work dealing specifically withthis ego-related variable reveals that consumers differ intheir need to receive such psychological benefits from theshopping act, and such differences in felt needs may bereflected in manifest purchase behaviors. For example,nonutilitarian value associated with achieving a lowerprice has been linked to those who are prone to deals(Schindler, 1992; Chandon, Wansink, and Laurent, 1999;Garretson and Burton, 1998).

While we expect that smart shopper self-perception willfavorably impact both attitude toward both private labelproducts and national brand promotions, we predict a morepositive effect of this ego-related construct on attitude to-ward national brand promotions. Retailers typically marketstore brands as lower price options. As such, these storebrands are consistently priced at lower levels, thus requiringno effort on the consumers part to locate a deal. In contrast,nationally branded products are not always offered at onelow price.

Contrarily, shoppers cannot expect to find nationallybranded products on promotion each time they patronize aretail store. More importantly, the locating of bargains onnational brands may represent more of a challenge andbecome more of an ego-gratifying experience than merelypicking up continuously low priced private label products.Because of this, we expect smart shopper self-perception to

affect consumers attitude toward national brand promotionsmore positively than their attitude toward private labels.

Hypothesis 3a: Smart shopper self-perception will havea positive effect on private label attitude.

Hypothesis 3b: Smart shopper self-perception will havea positive effect on national brand promotion attitude.

Hypothesis 3c: The effect of smart shopper self-percep-tion on national brand promotion attitude will be morepositive than its effect on private label attitude.

The role of brand loyalty

As shown in Fig. 1, we expect that brand loyalty tenden-cies will be negatively related to both attitude toward pri-vate label brands and national brand promotions. Brandloyal consumers display a stronger tendency to purchase thesame brands they have always bought and, compared tothose who are more likely to seek variety, are less likely toswitch to new and unfamiliar brands. Past researchers havesuggested that consumers concerned with paying lowerprices are less loyal toward specific brands (Blattberg andNeslin, 1990), and instead, tend to exhibit stronger varietyseeking tendencies (Garretson and Burton, 1998). Gener-ally, these consumers may be more concerned with thetransactional utility associated with product purchases thanwith benefits associated with the repetitive purchase of anyparticular brand.

However, we expect that the impact of brand loyalty onprivate label attitude will be more negative than that onnational brand promotion attitude. While existing researchdemonstrates that brand loyal consumers are not likely toengage in significant variety seeking behaviors, it is feasibleto anticipate that loyal consumers will hold more negativeattitudes toward private label brands than toward nationalbrands. Unlike national brands, store brands are likely to beless familiar to consumers because few store brands arepromoted with professionally developed national cam-paigns. While brand loyal consumers should generally holda negative attitude toward purchasing national brands ondeal, they are less likely to perceive deals on their preferredbrands as unfavorable (Krishnamurthi and Raj, 1991). Thiscombined with consumers unfamiliarity and lack of estab-lished favorable associations for private label brands shouldresult in more negative attitudes toward private labels.

Hypothesis 4a: The presence of brand loyalty will havea negative effect on private label attitude.

Hypothesis 4b: The presence of brand loyalty will havea negative effect on national brand promotion attitude.

Hypothesis 4c: The effect of brand loyalty on privatelabel attitude will be more negative than its effect onnational brand promotion attitude.

In addition, we argue that this proclivity to purchasespecific brands on a more consistent basis, relative to theconsumer norm, will be positively influenced by a belief in


the price-quality relationship (Blattberg and Neslin, 1990)and negatively influenced by value consciousness (Lichten-stein, Netemeyer and Burton, 1990). These predictions areconsistent with value conceptualizations that suggest thatvalue conscious consumers are more inclined to search forproducts with superior combinations of price and quality,and in a price competitive and dynamic marketplace are lesslikely to engage in routinized brand choice behavior. H5follows.

Hypothesis 5a: Value consciousness will have a negativeeffect on brand loyalty.

Hypothesis 5b: Price-quality associations will have apositive effect on brand loyalty.

Impact on market place behaviors

The final paths in the model indicate relationshipsbetween the two primary constructs of private label atti-tude and consumers attitude toward national brand pro-motions and the respective purchase behavior related toeach construct. Previous research indicates that such alink may be attenuated due to a variety of factors (e.g.,situational influences, attitude accessibility at the time ofthe behavior, involvement, differences due to level ofabstraction). However, attitude theory suggests that thegeneral attitudes toward private labels and national brandpromotions will be manifested (at least to some degree)in actual market place behavior. Thus, we predict thatprivate label attitude will be positively related to thepercentage of private label brands purchased and attitudetoward national brand promotions will be positively re-

lated to the percentage of products purchased on promo-tion on a given shopping trip.

Hypothesis 6a: Private label attitude will positively in-fluence the percentage of private label products pur-chased.

Hypothesis 6b: National brand promotion attitude willpositively influence the percentage of promoted productspurchased.

Methodology

Study sample and procedure

Our sample consisted of shoppers from a grocery storechain in the Midwest. As the shoppers were exiting thestore, they were approached by interviewers and asked ifthey would participate in a university-sponsored projectregarding shopping attitudes and behaviors. Those whoagreed to participate were asked to relinquish their scanner-based receipts. These receipts contained behavioral pur-chase information, including the total number of privatelabel products, total number of promoted products, and totalnumber of products purchased by each shopper. Respon-dents were then provided with a self-administered surveyand postage paid envelope so that they could complete theremaining questions at home.

Of approximately 900 surveys distributed, 300 providedcomplete information for all of the multi-item measures inthe model (response rate of 33%). The median householdincome category ranged from $35,000 to $49,999, and 78%of the respondents were women.

Table 1Overview of the multi-item measures

Multi-Item Scale Measures Coefficient

# ofItems

Sample Items

Private Label Attitude .89 6 When I buy a private label brand, I always feel that I am getting a good deal.I love it when private label brands are available for the product categories I purchase.

Value Consciousness .86 7 When purchasing a product, I always try to maximize the quality I get for the money Ispend.I generally shop around for lower prices on products, but they still must meet qualityrequirements before I buy them.

Price-Quality Association .85 4 The old saying you get what you pay for is generally true.The price of a product is a good indicator of its quality.

Smart Shopper Self-Perception .94 4 When I go shopping, I take a lot of pride in making smart purchases.When I shop smartly, I feel like a winner.

Brand Loyalty .91 5 Once I have made a choice on which brand to purchase, I am likely to continue topurchase it without considering other brands.Even though certain products are available in a number of different brands, I alwaystend to buy the same brand.

National Brand Promotion .90 8 I love special promotional offers for products.Attitude Im usually not motivated to respond to promotional deals on products. (Reverse

coded)


Overview of the measures

Reliabilities (coefficient alphas), number of items, andsample items for each of the multi-item measures are shownin Table 1. A six-item private label attitude measure wasdrawn from Burton et al. (1998). Other measures were takenfrom prior research and/or existing compilations of latentconstruct measures (e.g., Bearden and Netemeyer, 1998;Lichtenstein, Ridgway and Netemeyer, 1993). Both the per-centage of private label purchases and percentage of pro-moted product purchases were single item measures derivedfrom the information provided on the sales receipt. Percent-age of private label purchases was calculated as the numberof private label items purchased divided by the total numberof items purchased. The number of items purchased on saleor with a coupon divided by the total number of the itemspurchased represented the percentage of promoted productspurchased.

Results

Measurement properties

We used confirmatory factor analysis to assess the mea-surement model consisting of all items designed to measurethe six latent constructs. Standardized factor loadings fromthis analysis ranged from 0.58 to 0.95 (all t-values 10.50,p .001), with one exception. (One item of value con-sciousness produced a standardized loading of only 0.41

(t 7.08, p .001) and was weaker than desired.) Thecomparative fit index (CFI), Tucker-Lewis index (TLI), androot mean squared error (RMSEA) were 0.91, 0.90, and0.06, respectively, and each meets or exceeds advocatedlevels (Bollen, 1989). Given the large number of indicatorsin the model and sample size, these results are consideredsupportive of the construct measures (Gerbing and Ander-son, 1992).

Discriminant validity between constructs was next as-sessed using standard advocated tests (e.g., comparing av-erage variance extracted estimates for each pair of con-structs to the square of the phi correlations (N2)). All testsof discriminant validity were met. In sum, we concludedthat our results on convergence among items and discrimi-nant validity were acceptable.

Structural model results and tests of hypothesesconcerning proposed paths

Results pertaining to overall model fit and structural pathestimates are shown in Table 2. The overall fit statistics(CFI 0.91; TLI 0.90; RMSEA 0.059) indicate anacceptable level of fit between the hypothesized model andthese data.2 In general, the pattern of the path estimates isconsistent with the hypothesized model shown in Fig. 1.3 Ofthe fourteen hypothesized relationships, thirteen are in thepredicted direction and significant (p .025 or better). Asexpected, the antecedents to private label attitude and na-tional brand promotion attitude differ in terms of strengthand directionality. For example, the impact of price-quality

Table 2Model fit and tests of proposed relationships in the model

Model Fit Statistics 21198.09

df581

GFI.82

AGFI.79

CFI.91

TLI.90

Structural Relationships:Hypothesized Paths Proposed

RelationshipCompletelyStandardizedCoefficients

t-value

H1a: Value Consciousness 3 Private Label Attitude positive .17 2.40aH1b: Value Consciousness 3 National Brand Promotion Attitude positive .13 2.03bH2a: Price-Quality Association 3 Private Label Attitude negative .15 2.24bH2b: Price-Quality Association 3 National Brand Promotion Attitude positive .22 3.45aH3a: Smart Shopper Self-Perception 3 Private Label Attitude positive .16 2.52aH3b: Smart Shopper Self-Perception 3 National Brand Promotion Attitude positive .48 6.90aH3c: H3bH3a more positive 4.77a,cH4a: Brand Loyalty 3 Private Label Attitude negative .16 2.44aH4b: Brand Loyalty 3 National Brand Promotion Attitude negative .08 1.25H4c: H4a H4b more negative 3.15a,cH5a: Value Consciousness 3 Brand Loyalty negative .25 4.03aH5b: Price-Quality Association 3 Brand Loyalty positive .28 4.30aH6a: Private Label Attitude 3 Percent of Private Label Products positive .22 3.68aH6b: National Brand Promotion Attitude 3 Percent of Promoted Products positive .14 2.30b

a p .01b p .025c The t-values for both H3c and H4c were calculated to determine the significance of the differences between the hypothesized paths using the coefficients

as outlined in Cohen and Cohen (1983, pgs. 5657).


association on these constructs differs in terms of direction-ality. Also, both smart shopper self-perception and brandloyalty influence these two constructs differently in terms ofstrength. Furthermore, the model shows interesting relation-ships between brand loyalty and various constructs, and thehypothesized paths between the attitudes and market placebehaviors are both significant.4

Discussion

In this research we investigate similarities and differ-ences between the antecedents of national brand promotionattitude and private label attitude. To our knowledge, thisstudy is the first empirical test of a model that incorporatesprivate label and consumer promotion attitude scales, actualbehavioral measures, and latent construct antecedents, suchas price-quality associations and the ego-related, smartshopper self-perception.

Key similarities and differences toward off-price buying

A key empirical finding in our study is that value-con-sciousness is positively related to attitudes towards bothprivate labels and national brand promotions. Thus, whilevalue-consciousness helps explain why some shoppers payless, it does little to distinguish attitudes toward nationalbrand promotions and private label brands. With coeffi-cients nearly identical for both relationships, value-con-sciousness is a motivation for consumers who have positiveattitudes toward national brands or private label brands.

While value-consciousness is a commonality amongconsumers who seek price savings, the perception of pricein terms of its relationship to product quality, had the op-posite effect. For these consumers, the lower average pricesof the private labels cause such products to be regarded asless attractive. Quite likely, the low price on private labelssignals inferior quality for consumers. In contrast, thesesame buyers viewed national brands on price promotionmore favorably. For these consumers, price promotions mayrepresent a way to achieve savings without feeling thatquality was being sacrificed. This finding is both consistentwith, and further illuminates, prior behavioral research ex-amining national brand price promotions and private labelmarket share (Blattberg and Wisniewski, 1989; Sethuramanand Mittelstaedt, 1992).

Consistent with our expectations, we found smart shop-per self-perception to represent another basis for differenti-ation in attitudes toward national brand promotions andprivate labels. Smart-shoppers are interested in savingmoney, of course, but how they go about saving this moneyis also important to them. Unlike previous work concerningdifferences between store brand and national brand consum-ers (Ailawadi, Neslin and Gedenk, 2001), we tested thedirect impact of this ego-related construct on attitudes to-ward private labels and national brand promotions. Our

results show the path between smart shopper self-perceptionand national brand promotion attitude to be significantlymore positive than that between smart shopper self-percep-tion and private label attitude (p .01).

Prior empirical results have established an underlyingego-dimension to consumers deal proneness and suggestedthat it is an important determinant of deal prone behavior(Schindler, 1992; Chandon, Wansink, and Laurent, 1999).However, we show this powerful, ego-related dimension ofsmart shopping to be less influential for private labels.Because many consumer promotions may not be availableto all consumers or at all times, and may involve somesearch, smart shoppers may find the excitement of the huntto be a major reinforcement of their favorable attitude to-ward these type of promotions.

The question of brand loyalty

From a theoretical perspective, we show the market forproducts sold at price discounts to comprise a complexsegment largely drawn to buying for value. However, a keyfinding is that within this group value-conscious consumersare less loyal to national brands and inclined to switching orbuying private labels. In other words, value-conscious con-sumers may be favorably predisposed both to national brandpromotions, private label brands, or a combination of both.

Another finding provides further clarification for theabove result. Specifically, shoppers who see a linkage be-tween the price of a brand and its quality, or perceive ofthemselves as smart-shoppers, are more likely to seek pricesavings in promotions of national brands. Consumers whoseek pure value, however, or who have no pretensions withrespect to their shopping acumen, find that private labelssatisfy their needs. These shoppers may carry an unadornedneed for a consistent lower price and thereby exhibit littlesystematic loyalty to national brands.

Surprisingly, and against our hypothesis, consumers withbrand loyal tendencies appear not to have negative attitudestoward promotions of these private label brands. While therelationship between brand loyalty and private label attitudeis significant and negative, the negative path from brandloyalty to national brand promotion attitude did not reachsignificance. Krishnamurthi and Raj (1991) offer a possibleexplanation for the nonsignificant path in their study thatexamined the relationship between brand loyalty and na-tional brand promotion attitude. They found that brand loyalconsumers are interested in price promotions for their pre-ferred brands. Consumers anticipate promotions for theirfavorite brands and use these occasions to stockpile inven-tory. We conclude from this that many brand loyal consum-ers are less adverse toward promotions because of the pricesavings for brands they prefer.

In sum, we find off-price shopping preferences to bedriven by a complex set of factors. Value consciousness ispart of this set, but attitudes toward national brand promo-tions and private labels are also influenced by additional


factors, specifically price-quality associations and smartshopper self-perception.

These findings hold insights as to strategies that thedifferent members of the channel may employ to strengthentheir positions. In particular, manufacturers may employpromotions to appeal, either explicitly or implicitly, to con-sumers who like to perceive of themselves as smart shop-pers. It may even be possible to design promotions toaccentuate the skill that is associated with finding the bestdeals. Throughout all, a subtle echoing of the relationship ofquality to the price may prove additionally attractive. Morebroadly, strategic efforts to limit promotional activities mayresult in the loss of customers who added marginal profit tosuppliers through the purchase of their brands on deal.

At the same time, retailers may gain sales for theirprivate label brands by continuously seeking to improvecustomer perceptions of quality. We see the negative per-ceptions of private label quality to be a major roadblock toincreased volume. Efforts to improve quality perceptions ofprivate labels might be accomplished by upgrading thetangible quality of the product, improving the packaging,innovation, and educating consumers about the how qualityis built into the product. Mimicking national brand promo-tional practices, a promotional practice that may be increas-ing, might also have the same effect.

Limitations and future research

Refinements to our empirical research may be made on anumber of fronts. The behavioral measures of private labelpurchases and promoted product purchases were based ononly one shopping trip and situational variables maystrongly affect purchases on any single occasion. Whilepurchase behavior findings were significant, measurementover many trips would provide results that would carrymore confidence.

Also, we used a six-item scale to measure private labelattitude. Other research has employed an index measure forprivate label usage (e.g., never, sometimes, often, always)across different product classes (Ailawadi, Neslin and Ge-denk, 2001; Richardson et al., 1996). Hence, it is not clearhow our results would compare to prior research.

There are numerous opportunities to contribute to thisstream of research. To benefit national brand manufacturers,more research is necessary to understand which promotiontypes most contribute to smart-shopper self-perception. Re-lated to this, future investigations concerning the impact ofdifferent price promotions on short-term and long-termbrand loyalty may offer insight to manufacturers. Somestudies suggest that price promotions will harm brand loy-alty (perhaps weakening perceptions of superior quality)while others suggest that they help stave off private labelpenetration and result in loyal consumers loading up ontheir favorite brands during promotion events.

Retailers may benefit from research that specifically ad-dresses strategies that strengthen the value perceptions as-

sociated with private labels while concurrently demonstrat-ing that lower prices of private label brands are notassociated with inferior quality. Future research should ad-dress the effectiveness of different promotion and packag-ing techniques in changing quality perceptions, inferencesabout the price-quality relationship, and the overall percep-tion of value delivered by private label brands.

Notes

1. All items used, means and correlations for all mea-sures, detailed results from a confirmatory factor anal-ysis of the scales, and tests of discriminant validity areavailable upon request from the first author.

2. Acceptable fit is further supported by the results of theequation offered by Maiti and Mukherjee (1990) thataddresses the maximum GFI for a given model. Basedon this equation, which takes into account the sensi-tivity of both the number of indicators and sample sizein the calculation of GFI, the best GFI this modelcould produce is 0.904. The GFI of our model is 0.82or 91% of the best possible result for this model.

3. Two additional models were also performed to assessthe relationships from private label attitude to nationalbrand promotion attitude and from national brand pro-motion attitude to private label attitude. In each case,the path estimate between these two constructs wasnonsignificant and did not improve the model fit.

4. As suggested by a reviewer, two versions of the modelwere run to assess the presence of paths from (1)national brand promotion attitude to percentage ofprivate label purchases and (2) private label attitude topercentage of promoted product purchases. The resultsof both models revealed nonsignificant paths.

Acknowledgments

The authors would like to thank L.P. Bucklin and thereviewers for their helpful comments.

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