Introducing NBs at discounters:
Implications for brand image
Bachelor Thesis Marketing
Word Count: 7,039
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 Contents
Chapter 1 Introduction
1.1 Problem Definition
1.2 Problem Statement
1.2.1 Research Questions
1.3 Research Background
1.4 Academic Relevance
1.5 Managerial Relevance
Chapter 2 Conceptual Model
2.1 Conceptual Framework
2.2 Defining Constructs
2.2.1 Brand Image
2.2.2 Quality Perception
2.2.2 Price Positioning
2.3 Control Variable: Type of Consumers
Chapter 3 Price Positioning
3.1 Price Perception & Pricing Strategies
3.2 Promotional Activities
3.2.2 Price Promotions
3.3 Chapter Summary
Chapter 4 Quality Perception
4.1 Context Effects of Display and Products
4.2 Context Effects of Store Image
4.3 Feature Advertising
4.4 Chapter Summary
Chapter 5 Conclusions
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...
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