Effect of socio-economic, personal and perceptual variables on Taiwanese consumers’ private brands purchase behaviour: an integrated framework
Abstract
Private branding strategy plays an important role for international retailers
entering Asian grocery markets since there is a consensus that it helps
retailers not only improve the store profitability but also differentiate
themselves from other competitors. However, our present understanding of
consumer responses to private brand (PB) is mainly based on studies of
Western markets that have long PB development history. Generally speaking,
European and American consumers have sophomore purchase experience
and well familiarity with local retailers and their own brand products. Little
scholarly research has examined factors influencing consumers’ selection of
private brands offered by international retailers in Asian countries such as
Taiwan.
The purpose of this thesis is to identify how individual characteristics can be
used in predicting Taiwanese consumers’ preferences for private brands
since a successful marketing strategy is always based on well understanding
how preferences vary with consumer factors. This thesis first reviews
previous studies of PB and presents the results of six focus groups in Taiwan.
These results identify six key consumer characteristic variables (i.e. price
consciousness, perceived PB quality, perceived PB risk, store reputation
reliance, innovativeness and familiarity with PB) influencing consumers’ PB
attitude and purchase intention. This thesis then proposes a model that
integrates these six consumer characteristic variables.
In view of the potential store difference, data were collected from two
international retailers, Carrefour and 7-11, in Taiwan. A total of 409 useable
questionnaires (222 from the on-line surveys and 187 from face-to-face
interviewing) were collected and analyzed. The findings revealed that
Taiwanese consumers are more concerned about the quality than the price of
these international retailers’ PB products. The results also demonstrate that
when consumers are more familiar with international retailers’ PB, they
have more confidence in evaluating product quality, reducing perceived PB
risk and enhancing price consciousness of PB in the same time. Similarly,
when consumers perceived better store reputation, they will perceive better quality of the PB and have better PB attitude and higher purchase intention
toward the retailer’s PB.
More importantly, this paper verified that innovative private brand can
increase consumers’ perception of private brand quality and ultimately
increase their intention to buy it. Also, this thesis finds that some consumer
characteristics variables have more correlation with PB purchase intention
and the contribution of the variables varies from Carrefour to 7-11. In
general, however, perceptual variables have stronger prediction power than
personal and socio-economic variables.
These findings highlight the importance of consumers’ familiarity with PB
and perceived quality of PB and suggest that managers should increase
various promotional activities to facilitate consumers’ familiarity with their
PB. For example, they can offer free samples or tasting at the point of sale,
to increase consumers’ familiarity with their PB products in the future. More
academic and managerial implications and suggestions for future research
are discussed in the conclusion chapter.