Increased 'brand awareness' of private label and own-brand products will help to reduce consumer perceptions of inferior quality and increased risk, therefore increasing the customer base, say researchers.
The Spanish study suggests that in order to increase their customer base, retailers must invest in new communication strategies that increase the brand awareness of their store-brand products and make them appeal to quality conscious consumers.
Writing in Food Quality and Preference the research team noted that store brands (SBs) have become consolidated in the food market, and have achieved an objective quality similar to that of manufacturer brands with a competitive price.
"However, food retailers have invested little in communication about these brands, considering it enough to use proximity to the consumer and economies of scope derived from the presence of their own brands throughout the establishment," suggested the team, led by Natalia Rubio from the Autónoma University of Madrid, Spain.
The new research explored the consequences of this communication strategy on consumers' perception and identification of private-label brands - finding that inference brand awareness had negative effects on consumers, especially when quality of the product was considered, due to an increased perception of risk for SBs.
"This effect is substantially greater in quality conscious consumers, a key segment for retailers since it constitutes the target of their premium SBs," said Rubio and her colleagues - adding that their results suggest to retailers that "investment in communication of SBs is absolutely necessary to dismiss SB functional risk and expand customer base by appealing to quality conscious consumers."
"Brand communication contributes to brand awareness, and consumers use brand awareness on a great number of occasions as both a guarantee of quality and a risk-reduction strategy," the team added.
"The more aware consumers are of a brand and the more this awareness influences the attribution of quality to the brand, the greater the perceived risk in the proper functioning of SBs as compared with manufacturer brands."
Lessons for retail
Rubio and her team said their results have 'significant strategic implications' for food retailers, "since they show the importance of brand awareness as a strategy for reducing risk for buyers of SBs in general, and especially for quality-conscious buyers.
"Under no circumstances should retailers abandon the effort to achieve high identification with their brands, since brand identification is crucial to true loyalty to the brand," warned the researchers - who explained that their findings also warn that minimal investment in communication for store brands can have a negative effect on their perceived performance.
The team added that communication by retailers on their own brands throughout has been 'insufficient' to achieve changes in perceptions of quality that match the objective quality of the product.
"Retailers should engage in sufficient communication on the SB to increase its recognition and prestige and thus to encourage its connection with quality," said the Spanish team.
"It is true that such a strategy requires a certain level of investment and a sacrifice for the retail firm. But future gains in respect for the chain, trust, and value of the brand, satisfaction and identification are likely to reward that sacrifice," they added.
Source: Food Quality and Preference
Published online ahead of print, doi: 10.1016/j.foodqual.2013.09.006
"Brand awareness – brand quality inference and consumeŕs risk perception in store brands of food products"
Authors: Natalia Rubio, Javier Oubiña, Nieves Villaseñor