Consumer misinformation and the brand premium

A private label blind taste test

J.-P. Dube, B.J.J.A.M. Bronnenberg, R.E. Sanders

Research output: Contribution to journalArticleScientificpeer-review

Abstract

We run in-store blind taste tests between a retailer's private label food brands and the leading national brand counterparts in three large CPG categories. In a survey administered during the taste test, subjects self-report very high expectations about the relative quality of the private labels relative to national brands. However, they predict a relatively low probability of choosing them in a blind taste test. Surprisingly however, an overwhelming majority systematically chooses the private label in the blinded test. During the week after the intervention, the tested private label product market shares increase by 15 share points, on top of a base share of 8 share points. However, the effect diminishes to 8 share points during the second to fourth week after the test, and to 2 share points during the second to fifth month after the test. Using a structural model of demand, we find that the intervention increases the preference for the private label brands, but decreases the preference for the national brands, relative to the outside good. The findings are consistent with a treatment effect of information on demand where the memory for this information decays slowly over time. Alternative explanations to the information treatment are ruled out.
Original languageEnglish
JournalMarketing Science
Publication statusAccepted/In press - 2019

Fingerprint

Private labels
Premium
National brands
Decay
Structural model
Treatment effects
Lower probabilities
Product market
Retailers
Market share
Food
Self-report

Keywords

  • private label
  • brand
  • information
  • demand

Cite this

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title = "Consumer misinformation and the brand premium: A private label blind taste test",
abstract = "We run in-store blind taste tests between a retailer's private label food brands and the leading national brand counterparts in three large CPG categories. In a survey administered during the taste test, subjects self-report very high expectations about the relative quality of the private labels relative to national brands. However, they predict a relatively low probability of choosing them in a blind taste test. Surprisingly however, an overwhelming majority systematically chooses the private label in the blinded test. During the week after the intervention, the tested private label product market shares increase by 15 share points, on top of a base share of 8 share points. However, the effect diminishes to 8 share points during the second to fourth week after the test, and to 2 share points during the second to fifth month after the test. Using a structural model of demand, we find that the intervention increases the preference for the private label brands, but decreases the preference for the national brands, relative to the outside good. The findings are consistent with a treatment effect of information on demand where the memory for this information decays slowly over time. Alternative explanations to the information treatment are ruled out.",
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Consumer misinformation and the brand premium : A private label blind taste test. / Dube, J.-P.; Bronnenberg, B.J.J.A.M.; Sanders, R.E.

In: Marketing Science, 2019.

Research output: Contribution to journalArticleScientificpeer-review

TY - JOUR

T1 - Consumer misinformation and the brand premium

T2 - A private label blind taste test

AU - Dube, J.-P.

AU - Bronnenberg, B.J.J.A.M.

AU - Sanders, R.E.

PY - 2019

Y1 - 2019

N2 - We run in-store blind taste tests between a retailer's private label food brands and the leading national brand counterparts in three large CPG categories. In a survey administered during the taste test, subjects self-report very high expectations about the relative quality of the private labels relative to national brands. However, they predict a relatively low probability of choosing them in a blind taste test. Surprisingly however, an overwhelming majority systematically chooses the private label in the blinded test. During the week after the intervention, the tested private label product market shares increase by 15 share points, on top of a base share of 8 share points. However, the effect diminishes to 8 share points during the second to fourth week after the test, and to 2 share points during the second to fifth month after the test. Using a structural model of demand, we find that the intervention increases the preference for the private label brands, but decreases the preference for the national brands, relative to the outside good. The findings are consistent with a treatment effect of information on demand where the memory for this information decays slowly over time. Alternative explanations to the information treatment are ruled out.

AB - We run in-store blind taste tests between a retailer's private label food brands and the leading national brand counterparts in three large CPG categories. In a survey administered during the taste test, subjects self-report very high expectations about the relative quality of the private labels relative to national brands. However, they predict a relatively low probability of choosing them in a blind taste test. Surprisingly however, an overwhelming majority systematically chooses the private label in the blinded test. During the week after the intervention, the tested private label product market shares increase by 15 share points, on top of a base share of 8 share points. However, the effect diminishes to 8 share points during the second to fourth week after the test, and to 2 share points during the second to fifth month after the test. Using a structural model of demand, we find that the intervention increases the preference for the private label brands, but decreases the preference for the national brands, relative to the outside good. The findings are consistent with a treatment effect of information on demand where the memory for this information decays slowly over time. Alternative explanations to the information treatment are ruled out.

KW - private label

KW - brand

KW - information

KW - demand

M3 - Article

JO - Marketing Science

JF - Marketing Science

SN - 0732-2399

ER -