An empirical study of consumer behavior related to private labels and national brand promotions

Recent research has proved the existence of interesting and significant interactions between consumer purchase behavior related to national brand promotions and private labels, traditionally investigated as separate phenomena. Following this path, our work investigates the behavior of consumers concerning the purchase of private labels and the purchase of national brands sold on monetary and non-monetary promotions. The empirical research has been conducted in Italy, a country with a relatively low, but increasing, penetration of private labels. A sample of consumers has been interviewed in person, and data were analyzed in three steps. First, a principal component analysis was run on the three behaviors of interest and their antecedent variables. Second, factors relative to the antecedents were regressed on the factors relative to the dependent variables. Finally, a cluster analysis was operated on the factors related to the three dependent variables to segment consumers. The cluster analysis shows four segments that can be grouped in two macro-segments: consumers who use and who do not use private labels. Since the second macro-segment is larger than the first (56% vs. 44%), retailers who want to improve the performance of their brands could work on their penetration, trying to attract the 56% of consumers who do not use them. As these consumers use sales promotions, monetary and non-monetary, retailers could develop original promotional strategies, specifically targeted to each segment. Avenues for future research include a multi-country survey and separate investigations of individual promotion techniques, which have shown very distinctive characteristics.


Keywords:: private labels, national brand promotions, monetary promotions, non-monetary promotions