Introducing National Brands at Discount Retailers: Implications for Brand Image

Topics: Brand, Marketing, Brand management Pages: 24 (7958 words) Published: October 17, 2012
Introducing NBs at discounters:

Implications for brand image

Bachelor Thesis Marketing
Word Count: 7,039

Emiel Hoosemans
Anr: 881442

Tilburg University
Marketing Department
Supervisor: F. Sotgiu

The continued growth of the discount grocery industry has caused manufacturers of national brands to consider introducing their products at these discount stores. Little research has been done on the effects this has on the performance of the national brand. The objective of this study is to examine the implications of brand image when introducing the national brand. Consequences to brand image play a crucial role in determining the success of the launch. Manufacturers need to pay particular attention to the price positioning and the quality perception of the national brand with respect to private labels. Firstly, we examine the research background and acknowledge the type of consumers as a control variable. Then, two independent variables price positioning and quality perception are examined. We find evidence for pricing constraints and construct pricing strategies that affect brand image positively and negatively. The perception of quality is approached from the contexts effects literature. Drawing on branding, retailing, and pricing literature, we find promotional activities that can enhance brand image at discounters (i.e. advertising, packaging, innovation) or are potentially harmful for brand image (price promotion, display). Table of Contents

Table of Contents3
Chapter 1 Introduction4
1.1 Problem Definition4
1.2 Problem Statement4
1.2.1 Research Questions5
1.3 Research Background5
1.4 Academic Relevance6
1.5 Managerial Relevance7
1.6 Structure7
Chapter 2 Conceptual Model8
2.1 Conceptual Framework8
2.2 Defining Constructs8
2.2.1 Brand Image8
2.2.2 Quality Perception9
2.2.2 Price Positioning10
2.3 Control Variable: Type of Consumers10
Chapter 3 Price Positioning12
3.1 Price Perception & Pricing Strategies12
3.2 Promotional Activities15
3.2.1 Advertising15
3.2.2 Price Promotions15
3.3 Chapter Summary16
Chapter 4 Quality Perception17
4.1 Context Effects of Display and Products17
4.2 Context Effects of Store Image18
4.3 Feature Advertising18
4.4 Chapter Summary19
Chapter 5 Conclusions20
5.1 Conclusion20
5.2 Discussion21
5.2 Recommendations21

Chapter 1 Introduction

1.1 Problem Definition
In the fierce competitive world of supermarkets and adding to this the economic regression, hard discount stores seem to be growing at an explosive rate. Many brand manufacturers have been reluctant to enter the hard discounters segment either put off by high entry barriers or by having insufficient information about the market (Nielsen, 2007). However, managers of national brands (NBs) are coming around to realise entering into the discount channel is a great opportunity (Deleersnyder, Dekimpe, Steenkamp & Koll, 2007). Although the hard discounter’s segment is receiving an increasing amount of attention in the academic field, not much is known about the effects of adding NBs to the discounters’ assortment. In particular, there is little information available on what this exactly means for the brand image of NBs. This insecurity poses a real challenge for developing marketing strategies and methodologies to introduce NBs at the discount channel.

1.2 Problem Statement
Drawing from the past literature on the discount grocery industry and brand management, this study seeks to provide further insights about how brand image is affected when introducing NBs at discount stores. The perception of brand image of NBs influences how managers can position their brands at discounters. Two of the most important variables to consider are price and quality positioning of the NBs. These variables determine how...

References: Ailawadi, K. L., Neslin, S. A., Gedenk, K. (2001). “Pursuing the value-conscious consumer: Store brands versus national brand promotions”, Journal of Marketing, 65 (January), 71-89.
Ailawadi, Kusum L. & Kevin L. Keller. (2004). “Understanding retail branding: Conceptualizing insights and research priorities”, Journal of Retailing, 80, 331-342.
Bell, D. R., Chiang, J., Padmanabhan, V., (1999). “The decomposition of promotional response: An empirical generalization”. Marketing Science 18 (4), 504-526.
Bell, D. R., Lattin, J. M. (1998). “Shopping behavior and consumer response to retail price format: Why large basket shoppers prefer EDLP”, Marketing Science, 17 (1), 66-88.
Bodapati, A. V., Shrinivasan, V. (2006). ”The impact of feature advertising on customer store choice”. Research paper No. 1935, Stanford Graduate School of Business, May 2006.
Buchanan, L., Simmons, C. J., Bickart, B. A. (1999). “Brand equity dilution: Retailer display and context brand effects”. Journal of Marketing Research, 36 (3), 345-355.
Buchanan, L., Simmons, C. J., Bickart, B. A. (2000). “Leveraging equity across the brand portfolio”. Marketing Letters, 11 (3), 210-220.
Choi, S. C., Coughlan, A. T. (2006). “Private label positioning: Quality versus feature differentiation from the national brand”. Journal of Retailing, 82 (2), 79-93.
Cleeren, K., Verboven, F., Dekimpe, M. G., Gielens, K. (2010). “Intra- and interformat competition among discounters and supermarkets”, Marketing Science, 29 (3), 456-473.
Cotterill, R. W., Putsis, W. P., (2000). ”Market share and price setting behavior for private labels and NBs”, Review of Industrial Organization, 17 (1), 17-39.
Crewal, D., Krishnan, R., Baker, J., Borin, N. (1998). “The effect of store name, brand name and price discounts on consumers evaluations and purchase intentions”. Journal of Retailing, 74 (3), 331-352.
Deleersnyder, B., Dekimpe, M. G., Steenkamp, J-B. E. M. and Koll, O. (2007), "Win- win strategies at discount stores," Journal of Retailing and Consumer Services, 14 (5), 309-318.
Dobni, D., Zinkhan, G. M. (1990), "In search of brand image: A foundation analysis", Advances in Consumer Research, volume 17, 110-119.
Geyskens, I., Gielens, K. and Gijsbrechts, E. (2010), "Proliferating private label portfolios: How introducing economy and premium private labels influences brand choice", Journal of Marketing Research, 47(5), 791-807.
Hoyer, W. D., Brown, S. P. (1990). “Effects of brand awareness for a common, repeat purchase product”. Journal of Consumer Research, 17, 141-148.
Hunt, K. A., Keaveney, S. M. (1994). “A process model of the effects of price promotions on brand image”. Psychology & Marketing, 11 (6), 511-533.
Kalyanram, G., Winer, R. (1995). “Empirical generalizations from reference
price research,” Marketing Science, 14 (3), 161-169.
Karray, S., Martín-Herrán, G. (2007). “A dynamic model for advertising and pricing competition between national and store brands”. European Journal of operational research, 193 (2009), 452-467.
Keller, K. L. (1998). “Strategic brand management: Building, measuring and managing brand equity”, New Jersey, NY: Prentice Hall.
Lamey, L., Deleersnyder, B., Dekimpe, G. D., Steenkamp, J-B, E. M. (2007). “How business cycles contribute to private-label success: Evidence from the United States and Europe”. Journal of Marketing, 71 (January), 1-15.
Nielsen, A. C. (2007), "The hard discounter report: An overview of Aldi and Lidle in Europe", Consumer insights the Nielsen company. URL:
Nijs, V
Richardson, P. S., Dick, A. S., Jain, A. K. (1994). “Extrinsic and intrinsic cue effects on perceptions of store brand quality”, Journal of Marketing, 58 (October), 28-36.
Richardson, P. S., Dick, A. S., Jain, A. K. (1996). “Household store brand proneness: A framework”. Journal of Retailing, 72 (2), 159-185.
Sethuraman, R. (2003). “Measuring national brand’ equity over store brands”, Review of Marketing Science, 1(2), 1-28.
Sethuraman, R. (2001).”What makes consumer pay more for NBs than fore store brands: Image or quality?”, Review of Marketing Science, WP No. 318.
Sethuraman, R., Cole, C. (1999) “Factors influencing the price premiums that consumers pay for national brands over store brands”. Journal of Product & Brand Management, 8 (4), 340 – 351.
Simon, C., Sullivan, M.W., (1993). “The measurement and determinant of brand equity: A financial approach”. Marketing Science, 12, 28-52.
Sinha, I., Batra, R. (1999). “The effect of consumer price consciousness on private label purchase”. International Journal of Research in Marketing, 16, 237-251.
Steenkamp, E. M., van Heerde, H. J., Geyskens, I. (2010). “What makes consumers pay a price premium for NBs over store brands”, Journal of Marketing Research, 47, 1011-1024.
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Consumer Perceptions of Store Brands Versus National Brands Essay
  • Brand Essay
  • brand Essay
  • Brand Essay
  • brand Essay
  • Brand Audit Proposal Essay
  • Brand Management Dockers Essay
  • Brand Management Essay

Become a StudyMode Member

Sign Up - It's Free
Josh Duhamel | MacBreakZ 5.31 | Anjos e Demônios (Angels & Demons) 2009