Two-Tier Store Brands: The Benefic Impact of a Value Brand on Perceptions of a Premium Brand

• Published in: Journal of retailing 2011-12, Vol.87 (4), p.540-548
• Main Authors: Palmeira, Mauricio M., Thomas, Dominic
• Format: Article
• Language: English
• Subjects: Brand equity; Brand preferences; Consumer behavior; Consumers; House brands; Hypotheses; Inference; Marketing; Multi-tier; Perceptions; Product quality; Quality perceptions; Retail stores; Retailing industry; Store brands; Studies
• ISSN: 0022-4359; 1873-3271
• DOI: 10.1016/j.jretai.2011.09.004

[Display omitted] ► We contrast expectations for one versus two store brands (SB) in the same category. ► When only a premium SB is carried, consumers expect it to be of lower quality. ► Quality perception of a premium SB increases in the presence of a value SB. ► Quality perceptions of a value SB are not affected by the presence of a premium SB. ► Results for price expectations replicate those for quality perception. A recent trend in the retail industry is the emergence of multi-tier store brands. In the current article, we contrast consumers’ expectations in a retailing context in which a single store brand is present to one in which two store brands are offered in the same category. We propose that when a retailer offers a single store brand, consumers expect it to be of lower quality even when it is described as a premium brand. On the other hand, quality perception of a premium store brand increases in the presence of a value store brand. Importantly, quality perceptions of a value store brand are not affected by the presence of a premium store brand. In two studies we find support for our hypotheses showing the benefic impact of a value store brand on quality perceptions of a premium store brand.