The Impact Of Marketing Strategy Of Private Brand On Consumer's Willingness To Pay A Premium

As retailers start to beyond the manufacturers in terms of scale, private brands around the world show robust growth momentum. Private brands are popular with retail business, especially the chain supermarket. Early, private brands compete with the manufacturer brands through poor quality, low price and similar packaging. Later, in order to avoid the product homogeneity competition, realize the differentiation strategy, and earn a premium paid in the meantime, retailers are starting to develop top-end private brands, such as President's Choice series of Loblaws in Canada, Sam's Choice series of wal-mart in America, Watson Water series developed by Watson group in Hong Kong,"SEVEN PREMIUM" series of ito-yokado supermarket. In the development of top-end private brands, retailers are trying to improve their marketing ability, such as active engagement in the design of the product packaging, advertising, store image and so on, to convey the product positioning of "high quality, high price", enhance their brand image, and further promote the overall consumer perception of private brands. The pricing of high-end private brands is higher than mainstream brands on the market, and they are becoming the synonym for "high quality, good service" in the minds of consumers gradually. Now more and more consumers are willing to buy them at a premium. So how to explain the premium phenomenon of private brands, whether marketing strategy of private brand will promote consume perception of private brand and further increase consumer's willingness to pay a premium. It's the important topic worth studying.At present, a large number of research findings about private brand have been made both at home and abroad. And they are embodied in the following aspects: the reason for private brand succeed, the motivation of developing private brand, consumer attitude toward private brand, the influence factors of private brand purchase intention, manufacturer's strategy choice when facing private brand and so on. The object of study focused on the type of low price (including the low quality at the low price, the same quality at same price, the good quality at the low price), and they paid little attention to the top-end private brand which is growing popularity. So far, there has been no scholar can aim at the private brands premium phenomenon, and study the factors that influence consumer' willingness to pay a premium for private brand. This study makes an in-depth exploration around the issue, and tries to supplement and perfect private brand theory.The research content of this paper consists of six chapters:Chapter1, the introduction, mainly include the elaborating of research background, purpose, content, value, concept definition, study object and study scope, and the description of technical route, research methods and innovations.Chapter2, the literature overview, respectively review the research literatures of consumer' brand willingness to pay a premium, perceived quality of private brand, the gap of perceived quality of private brand, brand emotion, marketing strategy of private brand, and finds the research angle for the dissertation.Chapter3, the conceptual model building and research hypothesis putting forward, builds a conceptual model about marketing strategy of private brand affecting consumer's willingness to pay a premium combined with research achievement of the traditional brand and private brand, then puts forward research hypothesis through theoretical deduction and derivation.Chapter4, the research design and data collection, introduces the process of questionnaire design, operational definition of variable, measurement of variable, data collection and data analysis method.Chapter5, the empirical test and results discussion, includes data descriptive statistics analysis, reliability and validity of the items test, common method bias test, variables correlation analysis, empirical test of the main effect, control effect, mediation effects and moderating effect of the theoretical model, then the empirical results are discussed.Chapter6, the conclusion and prospect, highly refine and elaborate on the research conclusion and puts forward the corresponding management revelation, then dissects the shortages existing in research and points out the future research direction.The research conclusions of this paper are as follows:(1) There is a significantly negative correlation between advertisement expenditure, or store image and the gap of perceived quality of private brand, and the significance of store image is greater than advertisement expenditure. But there is a significantly positive correlation between price promotion and the gap of perceived quality of private brand. And there is not significant correlation between distinct packaging and the gap of perceived quality of private brand.(2) There is a significantly positive correlation between distinct packaging, or advertisement expenditure, or store image and the affective perception of private brand. Among them, store image is significant mostly, the advertisement expenditure comes second. While there is a significantly negative correlation between price promotion and affective perception of private brand, and the significance of negative impact of price promotion on affective perception is greater than the significance of positive impact of store image on affective perception.(3) There is a significantly negative correlation between the gap of perceived quality of private brand and consumer's willingness to pay a premium, but there is a significantly positive correlation between affective perception of private brand and consumer's willingness to pay a premium. And the significance of affective perception of private brand is greater than the gap of perceived quality of private brand.(4) The gap of perceived quality of private brand and affective perception of private brand are two important intermediary variables. The gap of perceived quality of private brand and affective perception of private brand act partial mediating effect between distinct packaging and consumer's willingness to pay a premium, and they act completely mediating effect between advertisement expenditure, or price promotion, or store image and consumer's willingness to pay a premium. The mediation effect of affective perception of private brand is greater than the gap of perceived quality of private brand.(5) Consumer price-quality model doesn't have a moderating effect on the relationship between the gap of perceived quality of private brand and consumer's willingness to pay a premium, and the moderating effect is mainly manifested in the relationship between affective perception of private brand and consumer's willingness to pay a premium. The relevant conclusions based on theory and empirical research make us have a more comprehensive and in-depth understanding of the relationship and the action mechanism between the marketing strategy of private brand and consumer's willingness to pay a premium.The innovations in this paper are embodied in the four aspects as follows: (1) This study object is the top-end private brands, and it enriches the existing private brand theory. Different from the past research focus on the generic or copycat private brands, this study will research the phenomenon of top-end or premium private brand that retailers develop. In addition, this study is no longer limited to explore for the consumer purchase attitude or intention of private brand, but try to study the factors which affect consumer's willingness to pay a premium for private brand.(2) This study extends the definition on the connotation of consumer perception of private brand in existing literature. At present the achievement of literature about discussing the consumer perception of private brand at home and abroad is more reflected in the perception of quality, but there is less research literature about the perception of attitude or emotion, In fact, brand emotion represents the brand image to a great extent, and is one of the important sources of brand premium. This study uses the variable of "the gap of perceived quality of private brand" to instead of the variable of "perceived quality of private brand" which is commonly used in literature. It can more directly reflect the differences in quality between private brand and the manufacturer brand, and will have stronger explanatory power to consumer's willingness to pay a premium for private brands.(3) This study extracts four key variables of marketing strategy of private brand. Due to previous literature of private brands mostly make the generic or copycat private brands as the research object, scholars often ignore the importance of marketing strategy of private brand. In fact, the marketing strategy of private brand is important to set up the image of private brand and convey the high-end positioning of private brand. Through literature review and combining with marketing practice of top-end private brand and consumer interviews, this study extracts four key variables about marketing strategy of private brand from the perspective of consumer perception, including distinct packaging, advertisement expenditure, price promotion and store image. Empirical test shows that these four marketing variables are key antecedent variables which affect consumer perception of private brand. This study enriches existing theory about marketing strategy of private brand.(4) This study introduces the perceived variable of private brand as intervening variables of the model, establishes a conceptual model about marketing strategy of private brand affecting consumer's willingness to pay a premium, further elaborates the action mechanism of marketing efforts of private brand how to affect consumer's willingness to pay a premium. This study tries to open the black box about the relationship between the marketing stimuli of private brand and consumer's willingness to pay a premium from the aspect of the gap of perceived quality and affective perception of private brand. The empirical test shows that:the gap of perceived quality of private brand and affective perception of private brand have important intermediary role between each variable of marketing strategy of private brand and the variable of consumer's willingness to pay a premium, and the mediation effect of affective perception of private brand is greater than the gap of perceived quality of private brand.The shortages of this paper include:(1) This study doesn't consider product category variable of private brand. Actually the impact of marketing strategy on consumer perception of private brand and consumer's willing to pay at a premium varies with the different product categories.(2) In the aspect of data collection, this study doesn't take the objective data, and the data is measured from the perspective of consumer perception. The above shortages will serve as the further research in the future.