What makes consumers willing to pay a price premium for national brands over private labels?

J.E.B.M. Steenkamp, H.J. van Heerde, I. Geyskens

Research output: Contribution to journalArticleScientificpeer-review

161 Citations (Scopus)

Abstract

The growing sales of private labels (PLs) pose significant challenges for national brands (NBs) around the world. A major question is whether consumers continue to be willing to pay a price premium for NBs over PLs. Using consumer survey data from 22,623 respondents from 23 countries in Asia, Europe, and the Americas across, on average, 63 consumer packaged goods categories per country, this article studies how marketing and manufacturing factors affect the price premium a consumer is willing to pay for an NB over a PL. These effects are mediated by consumer perceptions of the quality of NBs in relation to PLs. Although the results do not bode well for NBs in the sense that willingness to pay decreases as PLs mature, the authors offer several managerial recommendations to counter this trend. In countries in which PLs are more mature, the route to success is to go back to manufacturing basics. In PL development countries, there is a stronger role for marketing to enhance the willingness to pay for NBs.
Original languageEnglish
Pages (from-to)1011-1024
JournalJournal of Marketing Research
Volume47
Issue number6
Publication statusPublished - 2010

Fingerprint Dive into the research topics of 'What makes consumers willing to pay a price premium for national brands over private labels?'. Together they form a unique fingerprint.

  • Cite this