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THE CONTRIBUTION OF OWN LABEL PRODUCTS TO ASUPERMARKET BRAND IN THE UK

Claudio Vignali1, Gianpaolo Vignali2, Jurica Pavii3

Recived: 24. 11. 2005. Preliminary communicationAccepted: 19. 3. 2006. UDC: 658.626 (410)

In retailing, consumers are faced with an abundance of products and stores to

choose from. Through own label products, supermarkets are attempting to

differentiate their brand offering from their competitors. As a unique offering, own

label brands are influential in attracting new customers and retaining current

customers (Miranda and Joshi, 2003). Own label products have developed from

an offering of low quality and low price products and are now a means of

achieving store loyalty through a differentiated offering of high quality own label

products (Corstjens, J. and Corstjens, M., 1999). This area of study was chosen

due to the change in the marketing of own label products and to assess how

important consumers perceive own label products in their choice of supermarket.Within the qualitative research, two supermarkets, ASDA and Sainsburys, were

selected due to their similar market share yet difference in store and product

offerings. The quantitative research does not focus on specific supermarkets but

investigates respondents attitudes towards their reasons for choice of supermarket

and the importance placed on own label products.

BRANDS IN RETAILING

In retailing, a brand name can be more than a name or make of product,

and is argued that it represents embodiments of special qualities, values and

1 Claudio Vignali, PhD, Professor, Leeds Metropolitan University The Arnold Zif, Chair in

Retail Marketing Management Leslie Silver International Faculty, Leeds LS1 3HE, Civic

Quarter Leeds LS1 3HE, Phone + 44 113 283 6722, E-mail: [email protected]

Gianpaolo Vignali, MSc, Lecturer Leeds Metropolitan University Leslie Silver International

Faculty3

Jurica Pavii, PhD, Associate Professor, Zagreb, University Graduate School of Economics

and Business

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Management, Vol. 11, 2006, 1, pp. 53-73C. Vignali, G. Vignali, J. Pavii: The contribution of own label products to a supermarket brand..

images (Gabriel and Lang, 1995, p.61). Klein (2000) further argues that brandsare not products but are now ideas, attitudes, values and experiences. Grace and

OCass (2002) argue that a brand name holds economic and symbolic values in

consumers eyes. This is further argued by OCass and Frost (2002) who argue

that a brand is more than a name and holds symbolic properties. It is these

symbolic properties that make brands attractive and give them status in

consumers eyes.

Brands are important in retailing for both consumers and retailers as a

brand name differentiates a product from its competitors. It is a name, symbol,

design or some combination which identifies the product of a particular

organisation as having a substantial differentiated advantage.(Omalley, 1991

p.107). This differentiation from competitors can be achieved through a fusion

of product packaging, brand name, price, quality and promotion. A brand can be

defined as an identifiable product, service, person or place, augmented in such

a way that the buyer or user perceives relevant, unique added values, which

match their needs most closely.(DeChernatony and McDonald, 1992 p. 237). It

is these unique added values that transform a product into a brand name.

For retailers, a brand provides identification of their products with unique

associations to the store and legally protects unique features (OCass and Frost,

2002). For consumers, a brand can identify quality and a recognised brand can

reduce search time in a buyers decision-making process. Corstjens, et al.

(1999) argue that a brand name has three roles of identity, trust and images andassociations. Randall (2000) expands on these three roles and identifies 5 main

functions of a brand as a form of identity, a shorthand summary, security,

differentiation and added value. Knee (2002) argues that consumers evaluate a

brand through the recognisability, meaning, legitimacy and consistency of the

offering.

A strong brand contributes to the image of a product and aids repeat

purchases, which consequently leads to brand loyalty. Rooney (1995) argues

that brands attract and keep consumers through the attributes offered by the

brand such as value, image, prestige or lifestyle. This is achieved as loyalty to a

strong brand is often an aspirational act, enhancing self-image and self-esteem;

it reinforces a sense of peer group membership, actual or desired; it reducesworry and uncertainty; and it simplifies choices and saves time (Wileham and

Jary, 1997 p.17). A brand name enhances the success of establishing a new

product as the association with a strong brand name reduces the risk of

purchasing a product of which the consumer has little or no knowledge

(Montgomery and Werkerfelt, 1992).

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SUPERMARKETS AS A BRAND

A study by Arnold et al. (1983) identifies the most important factors in

supermarket choice as location, convenience, low price, fast check out, friendly

courteous service, best weekly specials and shopping environment (Kahn and

McAlister, 1997 p. 94). Supermarkets have further developed their offerings to

meet and exceed these expectations of consumers and through developing their

store as a brand have attempted to differentiate their offering in the market

place. A stores position in the market is based on the relative aspects of

customers and competitors, location, merchandise, atmosphere and marketing

mix elements (Ness, Gorton, and Kuznesof, 2002, p. 509).

Corstjens, et al. (1999) and Wileham et, al. (1997) argue that althoughlocation was once the only major differential in a stores offering, with the

increase in mobility of shoppers, location no longer dominates consumers

choice in supermarket. Wileham, et al. (1997) further this argument and contend

that location holds no brand differentiation in the market place, and this

differentiation can be achieved through range and price of products and service.

Supermarkets have differentiated their store offerings to create loyalty

among their shoppers. Once stores are differentiated one from another, retailers

can improve their profits.(Corstjens, et al. 1999, p. 138.) Newman and Cullen

(2002) expand on this argument and describe three methods a retailer can adopt

in order to turn their store into a brand and thus create a differentiated

advantage: develop a reputation for stocking quality branded product.

brand its stores on their competitiveness and price.

develop a range of own branded products.

It is argued that there are actually seven key elements in a retail brand

(Foxall, et al. 1994, Corstjens, 1995, Aaker, 1996, and Koskinene, 1999): the

store itself, service, fresh produce, own label ranges, communication, price and

quality positioning and access to the store, as cited in Landsverk, Hughes and

Fearne (2003).

Knee (2002) argues that a retailer must ensure that its brand offering must

include the characteristics of brand value, a brand system and a brand structure.A retailer can achieve a brand offering through the long term investment in

people and skills, in-store brand product development and quality control, in

marketing, in consumer research, and in supplier relationships. (Wileham, et al.

1999, p.19). Newman, et al. (2002) support this argument and argue that

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through these methods a retailer can maintain a differentiated position in themarket place, which may consequently increase customer loyalty.

Consumers evaluate a retailer on the attributes of store layout, fresh food,

own label ranges, service, location and price positioning (Landsverk, Hughes,

and Fearne, 2003). A retailers offering of a brand is the total service they offer

through the range and assortment of goods, the layout of the store and the

quality of the staff (Randall, 2000).

Own Label Brands

With the establishment of quality own label products, retailers are able to

differentiate their stock from other retailers and manufacturer/ national brand

products, while also holding a greater control over product quality, stock and

price, (Uncles and Ellis, 1989, p. 57) and with an outcome of higher gross

margins. Moore (1995), cited in Birtwistle and Freathy (1998) furthers this

argument, maintaining that these attributes make own label brands an effective

tool in gaining competitive advantage over other retailers as the own label

products provide the retailer with intangible, symbolic and differential

characteristics that a competitor can not imitate. Originally the low price, low

quality products were supported by the stores turnover, however it was the

introduction of higher quality, higher priced products which improved the

stores appeal (Corstjens, et al. 1999). Key Note (2003) uphold this argument

and that through the quality, guarantee of satisfaction and good value, own label

products can hold the success for retailers.

Own brands are influential in attracting new customers and retaining

current customers as they add depth and breadth to the retailers existing

ranges and provide a promotional pull(Miranda, et al. 2003 p. 44). Through

offering products and ranges different to that of their competitors, retailers

attempt to create a competitive advantage as exclusivity is built to the

supermarket through its unique offering of quality own label brands. It is the

high quality store brands that provide differentiation, store loyalty and

profitability. In contrast, low quality store brands allow the supermarket to

target the price sensitive segments (Corstjens and Lal 2000).

Own Labels in the Grocery Sector

The UK has one of the most developed own label markets. In the 1980s

own label products were significantly brought into the forefront of grocery

retailing with Marks and Spencer producing a higher quality of own label

products. The new ranges were appealing to consumers and marked a change in

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the way supermarkets were to compete on own label products. Waitrose aroseas a competitor to Marks and Spencer, offering the consumers an alternative

high quality of own label products (Key Note, 2001). Since then, all leading

supermarkets have firmly established higher quality own label products.

Sainsburys Taste the Difference, Tescos Finest, and ASDAs Extra

Special have all proved to be successful ranges and are clearly marketed as a

superior product range through quality, packaging and logos. Own label

products have evolved from the simple cost cutting offers and supermarkets

now offer a range of own label products to target different segments of the

market. It became advantageous for retailers to offer products at different levels

of quality and price to attract a broader spectrum of consumers since it was seen

that price was important for a certain group of shoppers, but relatively less

important to others. Since retailers must go for many segments, they must find

benefits which motivate each type of shopper to become loyal to the store.

(Corstjens, et al. 1999, p.139). For these reasons, Mintel (2003) identifies the

three basic own label offerings and the segments they are aimed at as:

ECONOMY: for consumers who perceive quantity to be more important

than quality.

STANDARD OWN LABEL: for consumers who believe the branded

equivalent is not worth the premium price.

PREMIUM: for consumers looking for added quality.

The development of own-label ranges has grown into new ranges of

healthy eating, organic and ranges specifically tailored to children's needs.Mintel (2003) argues that these ranges have contributed to the changing

perceptions of own label products and that consumers now have considerable

trust in leading grocery retailers and their own label product ranges.

Table 1: Increase of economy own label products

SUPERMARKET OWN LABELECONOMY RANGE

Number of products in 2000 Number of products in 2002

ASDA:- Smart Price 300 640

Tesco:- Value 200 400

Sainsburys:- Economy 130 140

Source: Mintel 2003.

Although own label products have enjoyed a growth in the market, this

growth is not evenly spread across all product categories in the grocery sector.

Mintel (2003) identifies the chilled packaged goods as a strong sector of

penetration for own label products and claims that own label products even

dominate some categories to the virtual exclusion of national brands in the

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chilled foods sector.

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Hypotheses

As it was discussed earlier, there are many contributions to the image of a

supermarket, including own label products, store aesthetics, assortment and

variety of national product ranges, price of products, service and quality of

experience in store. There has been a clear improvement in own label brands

with the emphasis moving away from the economy ranges, therefore:

H1: Consumers now look to quality as the most important factor in thechoice of own label products.

Consumers are still cautious in some areas, and look to familiarity and trust in

national brands when a purchase is deemed risky, therefore:

H2: Consumers are still unwilling to buy own label products in certainproduct categories.

Supermarkets are developing their offering of a store into a brand offering. The

leading four supermarkets are positioning themselves through differentiation in

order to secure market share, therefore:

H3: Consumers are looking to a supermarket brand as a whole in theirchoice of supermarket.

Own label products are important to supermarkets in differentiating their brand

offering from the competitors' and build brand loyalty, therefore:

H4: Own label products are an important factor for consumers in theirchoice of supermarket.

Methodology

The research entailed in this article consisted of both primary and

secondary research. Through the secondary research - conceptual framework of

own label products in the grocery sector has been developed and through

primary research methods the issues surrounding own label have been

investigated.

It was necessary to collect responses from a broad range of age groups,

salary brackets and supermarkets visited, in order to gain a full understanding of

the market. The aim was to, through gaining information regarding the

respondents age group and salary bracket, gather the relevant information to

analyse the influential factors against the data collected. A proposed figure of

one hundred questionnaires to be collected was set in order to obtain a valid

result.

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The questionnaires were designed to fulfil the objective of analysing theperceptions of own label products through questions nine and ten. Question nine

was asked in order to understand which product categories of own label

products the respondents were willing to purchase. The question was

constructed from the information gained from ASDAs and Sainsburys

websites (www.asda.com and www.sainsburys.co.uk). In question ten,

respondents were asked to rank each factor according to the degree of

importance to them when purchasing own label products. A Likert scale was

used with 1= very important, 2= important, 3= somewhat important, 4=

neutral, 5= somewhat not important, 6=not important, 7= not at all

important. A scale of seven points was chosen as it allowed for a broader range

of respondents answers and therefore a clearer analysis of the importance placed

on the attributes of own label products.

To achieve the objective of determining the reasons for choice in

supermarket, question six was constructed from the information collected from

relevant literature (Kahn et al. 1997, Corstjens et al. 1999 and Newman et al.

2002). This information was converted into choices available for the

respondents to choose from.

One hundred questionnaires were administered and seventy questionnaires

were collected and the results were entered into SPSS for analysis. This gave a

response rate of 70%. Among the responses, 46 respondents were female and 24

male, which equates to 65.7% and 34.3% respectively.

From the seventy completed questionnaires, there was a heavy percentage

of 18-25 year olds. This was to be expected as many questionnaires were

administered at Leeds Metropolitan University among students. The percentage

of respondents in the 42-49 and 50+ brackets were exactly the same with 20%

each. The age brackets that were not as evenly represented were 26-34 with

12.8% and 35-41 with 5.71%. There were no responses from the under 18

bracket. Responses were obtained from every age bracket in the targeted

sample.

The largest percentage in the salary bracket of respondents is the under

10,000 group with 41.43%. This may be due to the amount of 18-25 year old

respondents, who were mainly students and therefore not in full time jobs. This

segment will be compared against the price of own label products to analyse

whether these respondents are price sensitive.

In order to gain an understanding of the frequency of respondents

supermarket visits and ensure that participants visit a supermarket, the

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respondents were asked about the frequency of their visits. 91.43% ofrespondents visit a supermarket every two weeks or more frequently.

Figure 1. illustrates that each major supermarket brand is represented by the

respondents. This range of responses allows for an analysis of the market. Other

supermarkets recorded as the main grocery shop included Marks and Spencer,

CO-OP and Waitrose.

0

20

40

60

80

Factors in choice of supermarket

No.of

respondents

Location

Supermarket chain

Price range

Special offers

Range of own brands

Range of nat ional brands

Good service

Good value

Good quality of p roducts

Figure 1: Factors in choice of supermarket

It is clear that respondents do consider more than one factor of a

supermarket offering in their choice of patronage to a supermarket as supported

by Kahn et al (1997), Randall (2000), Ness et al (2002). This question reveals

which factors are influential to consumers in their choice of supermarket.

However, it does not show the importance of these factors to consumers.

Table 2: Important factor in choice of supermarket (1)

35 50.7%

9 13.0%

8 11.6%

7 10.1%

4 5.8%

3 4.3%

2 2.9%

1 1.4%

Location

Good value

Good quality of products

Price range

Parking

Special offers

Own label range

National brand ranges

Importance of

factors in

choice of

supermarket

Count Col %

In total, eight factors were selected as respondents' most important choice

in supermarket. Location accounted for 50.7% of responses. Only supermarketchain and good service were not chosen as the first factor of choice in

supermarket. This data illustrates that location is very important in choice of

supermarket to respondents. However, just under 50% of respondents do not

consider location as the most important factor, which supports Corstjens et al

(1999) who argue that location is an important factor in consumers' choice of

supermarket but it does not predominantly influence all consumers.

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13 19.1%

10 14.7%

9 13.2%

8 11.8%

7 10.3%

7 10.3%

6 8.8%

5 7.4%

2 2.9%

1 1.5%

Good value

Price range

Special offers

Parking

Good service


Location


Supermarket Chain

Own label range

Importance offactors inchoice ofsupermarket

Count Col %

Ten factors were selected by respondents as their second most important

choice in supermarket. The most frequent response in this category was goodvalue with 19.1% of the share. Price range and special offers were claimed by

14.7% and 13.2% of respondents respectively. Good service accounted for

10.3% of respondents' second important factor, whereas it did not account for

any responses in the most important factor. The factors selected show a more

even spread of responses and do not illustrate a substantial preference for one

factor. Therefore, respondents are more aware of different factors in their

second factor of choice in supermarket.


11 17.7%

9 14.5%

9 14.5%

8 12.9%

6 9.7%

6 9.7%

5 8.1%

5 8.1%

2 3.2%

1 1.6%

Parking

Price range


Special offers

Location

Good value

Own label range


Other

Good service

Importance of

factors in

choice ofsupermarket

Count Col %

In respondents' third most important factor of supermarket choice, parking

accounted for the largest percentage share with 17.7%. Price range and good

quality of products both had an equal response of 14.5% of the responses each.

From these statistics it is clear that accessibility is an important factor in choice

of supermarket. Supermarket chain did not feature as a factor, however of thetwo other factors selected, these included familiarity of supermarket layout

which means the respondent visits the same store but not purely because of

supermarket chain. The second other factor was the overall range of all

products, which shows that equal importance was placed on national ranges and

own label ranges.

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Overall, the most important factor to respondents in choice of supermarketwas location. The second most important factor was good value and the third

was parking. Once location was accounted for, respondents considered a range

of factors in choice of supermarket and in the offerings of a supermarket. Good

value is clearly important to respondents but does not equate to purely low

price. The range of both national brands and own label brands do not feature

heavily as a factor in choice of supermarket. Therefore, it is clear that

respondents do not look to the products on offer but to the offerings of the

supermarket brand as a whole such as the value of shopping at a certain

supermarket, or the overall price range, special offers and to the quality of

products. Added values of service did feature as an important factor illustrating

that respondents are considering their shopping experience as a whole and not

purely basing their shopping location on the lowest price. Supermarket chain

was only selected by one respondent. The second important factor in choice of

supermarket however was selected by 15.7% of respondents in question six.

This illustrates that consumers do not base their choice of supermarket on brand

name alone but look to the brand offerings of the chain first.

This data supports Kahn et al (1997) and Corstjens et al (1999) who both

argue that location is the most important factor but following that other factors

clearly are important in consumers 'choice of main grocery shopping. This

clearly illustrates that retailers must do more than just find the right location as

consumers look to the brand offering as a whole in their choice of supermarket

ategories of Ranges

Baby

Bakery & Cakes

Beers, Wines & Spirits

Biscuits

Cereal

Condiments

Cooked Meats

Dairy

Frozen

Fruit & Veg

Laundry & Household

Meat, poultry & fish

Organic and 'Free From'

Pet care

Ready Meals

Snacks & Crisps

Soft Drinks

Tinned & Packet Goods

Toiletries & Pharmacy

World Food Ranges

Hot Drinks

0

5

10

15

20

25

30

35

40

45

Categories of Ranges

No.ofPeopl

Figure 2: Categories of own label products purchased

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This data does not support the argument that own label products areimportant in building loyalty to supermarkets, as argued by Kahn et al (1997)

Corstjens et al (1999), Key Note (2003) and Miranda et al. (2003). Own label

products only accounted for 15 responses, and was only selected by two

respondents in the first most important factor, one respondent in the second

important factor, and five respondents in third most important factor. This does

illustrate that some consumers are looking to own label products in their choice

of supermarket, but the majority are looking to the factors of location, value,

parking, price and quality when choosing which supermarket to frequent. In

order to provide an analysis of own label attributes it was necessary to asses

whether respondents purchased own label products. Of the seventy respondents,

98.57% purchase own label products. Only one respondent did not purchase

own label products.

The most frequent response was Frozen Produce with 41 respondents

claiming that here they were willing to purchase. Dairy had 40 responses and

Bakery and Cakes had 39 responses. There was no clear outright product

category which a strong majority of respondents would be willing to purchase.

This illustrates that, although 98.57% of respondents do purchase own label

products, there is no clear leadership of own label product ranges over national

brands and there are categories in which respondents are not willing to purchase

own label products.

The categories with the lowest responses were Baby and Pet Care, with

only 3 and 5 respondents respectively claiming they would be willing to buyown label products in these ranges. However these responses cannot be fully

analysed due to the lack of knowledge regarding the respondents' background to

ascertain whether they have a baby or pet. This is therefore an oversight in the

collection method. Further investigation would be needed to find out the

respondents' ownership of pets and parental status.

The next lowest responses included Beers, Wines and Spirits and Hot

Drinks, both with 13 responses. Therefore, 81.4% of respondents did not select

these categories as the products they would be willing to purchase. This may be

due to strong national brand loyalty in these categories or a perceived risk in

the purchase in which the own label brand does not hold a strong perceived

quality in the consumers' eyes and therefore make the purchase too risky to

switch brands.

Mintel (2003) identified alcoholic and carbonated drinks as categories

where there was less own label penetration. This data to some extent supports

these findings. However, carbonated drinks were not categorised as a single

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category but were intended to fall within soft drinks. This error in resultscollection obstructs the support of carbonated drinks as a category of

improvement for own label products.

This data supports the hypothesis that consumers are still unwilling to

purchase own label products in certain categories. This may be due to

consumers not evaluating own label brands to be of comparable quality

compared to the established national brands in these categories. Further

investigation would need to look at the reasons for consumers not purchasing

these categories.

Table 5: Percentage table of importance placed on attributes of own label products

Attribute Cum percent of importance

Neutralpercent

Cum percent of notimportant

Quality 97.1 1.4 1.4

Freshness 97.1 1.4 1.4

Value 94.2 0 5.7

Price 84.1 2.9 12.9

Quantity 75.4 15.4 9.2

Loyalty 42.4 21.2 36.4

Image 36.4 19.7 43.9

Packaging 17.9 22.4 59.7

Advertising 17.9 14.9 67.2

Table 3. illustrates the cumulative percentages of the differing degrees of

importance placed on the attributes of own label products, along with the

neutral percent and the cumulative percent of the differing degrees of

unimportant responses. The two most important attributes were quality and

freshness. These were followed by value, price and quantity. The least

important factors to respondents included advertising, packaging and image of

the own label brand.

From this data it is clear that price is no longer the determining factor in

choice of own label products for all consumers, which supports the arguments

of Corstjens et al (1999) and Blythe (1997). This data supports the hypothesis

that consumers look for quality in their purchase of own label products.

With 84.1 percent of respondents claiming differing degrees of importance

regarding price in their purchase decision on own label products, price is still an

important factor. However, it is the attributes of quality and freshness which

received the highest percent of respondents claiming a degree of importance,

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both 97.1 percent. To further investigate the importance of price and quality,cross tabulation has been used against salary to assess whether salary bracket

has an affect on the importance of these attributes. The row percentages show

the responses for each salary bracket due to the uneven spread of results.

Table 6: Cross tabulation of importance of quality against salary bracket

31.0% 51.7% 13.8% 3.4%

84.6% 7.7% 7.7%

78.6% 21.4%85.7% 14.3%

66.7% 33.3%

under 10,000

10,001- 19,999

20,000- 29,99930,000- 39,999

40,000+

Salarybracket ofsubject

Row %

veryimportant

Row %

important

Row %

somewhatimportant

Row %

neutral

Row %

somewhatnot

important

Importance of quality of own label products

Quality appears to have a degree of importance in all salary brackets. The

highest percentage of respondents in all but under 10,000 bracket, claimed

quality was very important In the under 10,000 bracket over half of these

respondents claimed quality as important. The majority of all respondents in

all salary brackets claimed quality was important and very important, this

therefore supports the hypothesis that consumers do look for quality as an

important factor in own label products.

The importance of quality may explain respondents' unwillingness to

purchase own label products in certain categories (Question nine). If consumersplace such a high degree of importance on quality, own label brands may not

hold the same weight in their brand name in comparison to national brands to

overcome the risky purchase. As Batra et al. (2000) argue, consumers are

purchasing own label products in low risk categories.

Table 7: Cross tabulation of importance of price against salary bracket

51.7% 34.5% 3.4% 10.3%

61.5% 23.1% 15.4%

38.5% 46.2% 7.7% 7.7%

50.0% 12.5% 12.5% 25.0%

16.7% 50.0% 16.7% 16.7%

under 10,000

10,001- 19,999

20,000- 29,999

30,000- 39,999

40,000+

Salarybracke t of

subject

Row %

veryimportant

Row %

important

Row %

somewhatimportant

Row %

neutral

Row %

somewhatnot

important

Row %

notimportant

Row %

not at allimportant

Importance of price of own label products

The cumulative percentages of respondents claiming a differing degree of

importance in price clearly indicates that price sensitivity increases as salary

bracket decreases. The highest cumulative percentage fell within the under

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10,000 salary bracket with 89.6%, in the 10,001-19,999 and 20,000-29,999 salary bracket cumulatively 84.6% and 84.7% respectively, claimed a

differing degree of importance in the price of own label products. The lowest

cumulative percentages fell with the 30,000-39,999 salary bracket in which

75% of respondents claimed price was to any degree important to them and the

40,000+ salary bracket in which 66.7% of respondents claimed that price was

to any degree important to them.

In comparison to the cumulative percentages of price as not important to

any degree, 25% of the 30,000-39,999 salary bracket claimed price was not

at all important. The highest cumulative percentage fell with the 40,000+

salary bracket with 33.4% of respondents claiming price was to differing

degrees not important. This data illustrates that a higher importance is placed on

price in the lower salary brackets. As Corstjens et al (1999) argue, price is only

important to certain shoppers and is less important to others. This data suggests

that the importance of price is dependent on respondents' salary bracket and the

importance decreases as salary increases.

0

20

40

60

Range

No

.ofresponses

Budget

Standard

Premium

DietingOrganic

Dietary needs

Childrens

Figure 3: Product ranges purchased

This question was asked to gain an understanding of which ranges of own

label products respondents were willing to purchase. Initially as own label

products were introduced as a budget economy option, the question was

intended to evaluate the purchase of the Budget range in comparison to the

other own label ranges now available.

Both the Standard and Premium ranges have a higher share of

responses. 48 respondents claimed they would purchase a standard own label

product which was the highest response with 68.6%. 44 respondents claimed

they would purchase a premium own label range which equalled 62.9% of the

respondents. 27 respondents claimed they would purchase a Budget range

product; lower than both the response for the Standard and Premium ranges.

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The lowest response rate was the Dietary needs and Childrens ranges,with only six and seven respondents respectively claiming they would purchase

these ranges. This data is not sufficient to claim that consumers are unwilling to

purchase these own label products as there was no information gained about the

respondents as to whether they had children or dietary needs. This oversight in

collection precludes analysis of the purchase of these ranges and further

investigation would be needed to ascertain whether respondents were

purchasing for children or pets. The following cross tabulation results analyse

the correlation between respondents' importance on quality and purchase of

budget, standard and premium ranges in order to determine which ranges are

purchased against the respondents needs for quality.

Table 6: Cross tabulation of importance of quality against purchaseof budget own label ranges

2.4%

68.3% 57.1% 20.0% 100.0%

29.3% 42.9% 80.0% 100.0%

n

y

Budgetranges

Col %

veryimportant

Col %

important

Col %

somewhatimportant

Col %

neutral

Col %

somewhatnot

important


(n= no, y= yes)From the above results it is shown that a higher percentage of consumers

who claim quality is very important and important do not purchase budget

own label ranges. A higher percentage of respondents who claim quality issomewhat important do purchase budget own label ranges. These respondents

who place less emphasis on quality however did not indicate a degree of

importance in desire for quality. This data indicates that the more quality

sensitive respondents are, the less likely they are to purchase budget own label

brands.

Table 7: Cross tabulation of importance of quantity against purchase

of budget own label ranges

66.7% 61.1% 52.6% 50.0% 100.0% 100.0%

33.3% 38.9% 47.4% 50.0% 100.0%

n

y

Budgetranges

Col %

veryimportant

Col %

important

Col %

somewhatimportant

Col %

neutral

Col %

somewhatnot

important

Col %

notimportant

Col %

not at allimportant

Importance of quantity of own label products

Mintel (2003) argues that budget ranges are aimed at consumers who

perceive quantity to be more important than quality. However, Table 10 does

not support this as a lower percentage of respondents claiming quantity as

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having a degree of importance to them claim to purchase budget own labelcompared to those that do not.

Table 8: Cross tabulation of importance of quality against purchase

of standard own label ranges

2.4%

31.7% 23.8% 40.0%

65.9% 76.2% 60.0% 100.0% 100.0%

n

y

Standard

ranges

Col %

very

important

Col %

important

Col %

somewhat

important

Col %

neutral

Col %

somewhat

not

important


Table 8. shows the column percentages of the cross tabulation results for theimportance of quality against the purchase of own label products. A higher

percentage of respondents who claim a differing degree of importance in

quality, purchase standard own label ranges. All 100% of respondents who

claimed they were neutral and perceived quality as somewhat not important,

purchase standard own label products. This data indicates that quality sensitive

respondents are likely to purchase standard own label ranges. Supermarkets

have been trying to improve the quality of their standard own label ranges and

this appears to be successful with the quality conscious respondents purchasing

own label products.

Table 9: Cross tabulation of importance of quality against purchase

of premium own label ranges

2.4%

29.3% 28.6% 100.0% 100.0%

68.3% 71.4% 100.0%

n

y

Premium

ranges

Col %

very

important

Col %

important

Col %

somewhat

important

Col %

neutral

Col %

somewhat

not

important


Table 9. shows the column percentages from the cross tabulation of the

purchase of premium own label ranges against the importance of quality. From

this data it is clear that quality is important to respondents and a higher

percentage of respondents who claim quality is very important and important

purchase premium ranges than those who do not purchase premium ranges.

Premium ranges are positioned as the highest quality of an own label offering

and therefore cater for the quality conscious.

From the three tables, it is clear how important quality is to consumers. It

also shows an increase in the purchase of own label products against the

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increase in quality of the ranges. The figures for standard and premiumpurchases are similar and indicate that supermarkets own label offerings are

improving not only in premium ranges but also in the standard range offering.

Even the budget ranges, originally seen purely a cheap and basic offering are

purchased by the quality conscious respondents. Raju (1995) argued that own

label products were purchased by price and value sensitive consumers, however

this data illustrates that quality conscious consumers now purchase own label

products.

Table 10: Importance of own label products

6 8.6 8.6 8.65 7.1 7.1 15.7

16 22.9 22.9 38.6

17 24.3 24.3 62.9

6 8.6 8.6 71.4

8 11.4 11.4 82.9

12 17.1 17.1 100.0

70 100.0 100.0

very importantimportant

somewhat important

neutral

somewhat not important

not important

not at all important

Total

Valid

Frequency Percent Valid Percent

Cumulative

Percent

The highest response to this question fell with 24.3% of respondents

claiming they were neutral. The cumulative percentage of respondents who

claimed own label products were to any degree important was 38.6% compared

to the cumulative percentage of respondents who claimed own label products

were to any degree not important being 37.1%. This figure shows that there is a

marginal preference for importance of own label products.

This spread of figures illustrates that consumers, although purchasing own

label products, still do not look to own label products as a predominant

determinant factor in their choice of supermarket. This data does not allow for a

complete justification of the hypothesis that own label products are an

important factor to consumers in their choice of supermarket. Although a

higher percentage of respondents fall into the important categories than the

unimportant categories, the number of respondents who claim to be neutral

diminishes from this figure. This is in comparison to question six where only

21.4% of respondents claimed that they considered own label products in their

choice of supermarket. In this question, 38.6% claimed that own label products

were to differing degrees important. This may be due to the wording of the

question. In question six, respondents were given a list of options to choose

from, whereas this question gave them the opportunity to rate the level of

importance of own label products. This may be interpreted that consumers do

consider the brand offering as a whole, but own label products are growing in

importance with consumers.

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It is argued that own label products build loyalty with consumers (Kahn etal 1997, Corstjens et al 1999, Miranda et al. 2003 and Key Note 2003). This

data neither fully supports this argument nor does it support Richardson et al

(1994) who argue that consumers do not distinguish among the different

offerings of supermarkets. This data shows, with 38.6% of respondents claiming

a degree of importance of own label products in their choice of supermarket,

that there is still the potential of growth within this sector of supermarket

retailing.

CONCLUSION

From the research conducted it was apparent that own label brands werenot the only method of achieving a brand offering. Consumers are looking to a

range of attributes and with the supermarket industry being so competitive,

consumers are able to demand more from their supermarket. Own label

products are growing in importance in consumers' choice of supermarket.

However, they are not the sole determinant in choice of supermarket. This

research has therefore highlighted that own label products are still growing in

importance and retailers must continue to build their offering into a brand

offering if they are to secure and increase their market share.

Through the use of questionnaires, it became apparent that consumers are

not as willing to purchase certain categories of own label products. This data

therefore supports Batra et al. (2000) that consumers are prone to purchase ownlabel products in low risk categories. It is within the high risk categories that

supermarkets can continue their expansion of own label ranges. To do this, the

retailer must build consumer confidence with the overall supermarket brand,

therefore transferring confidence to the own label ranges. As Aaker (1996)

argues, a strong brand name can aid consumers in their choice of brands.

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DOPRINOS VLASTITIH TRGOVAKIH MARKI RAZVOJU TRINEMARKE SUPERMARKETA U VELIKOJ BRITANIJI

Saetak

Potroai se u maloprodaji suoavaju s obiljem proizvoda i maloprodajnih lokacija. Uz

pomo vlastitih trgovakih marki, supermarketi pokuavaju diferencirati ponudu svojetrine marke u odnosu na konkurente. Kao jedinstveni oblik marketinke ponude,

vlastite trgovake marke mogu posluiti kao uinkoviti oblik privlaenja novih, tezadravanja postojeih kupaca. Iako su se razvile iz ponuda niske kvalitete i niske

cijene, danas trgovake marke predstavljaju nain zadravanja lojalnosti kupaca uzpomo diferencirane ponude visoke kvalitete. U ovom je radu izabrana opisana

problematika istraivanja zbog promjena u marketingu proizvoda vlastitih trgovakihmarki, kao i potrebe za procjenom koliko su kupcima vane vlastite trgovake marke u

izboru supermarketa. Kvantitativna metodologija uz pomo koje je provedenoistraivanje ne usredotoava se na specifine supermarkete, ve utvruje stavove

ispitanika povezane s izborom supermarketa i znaajem kojeg pridaju vlastitimtrgovakim markama.

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