Premium Retail Brands in the Food Retail Industry : A Customer Based Study of ICA Selection

Abstract: This study concerns retail brands in the food retail industry and focuses on premium products. The research is investigating how ICA can best use premium products to increase their profitability. The study is thus based on their brand ICA Selection and investigates three sub purposes concerning the customers’ perception of the products, their purchase behavior and their willingness to pay a price premium.   To investigate, theory concerning brand resources was utilized, involving both brand equity and brand management. To measure brand equity, the authors adapted a customer mind set and utilized Aaker’s framework and the specific industry developments made by Anselmsson, Johansson and Persson. Accordingly, this theory is based on five brand equity attributes: perceived quality, brand associations, loyalty, awareness and uniqueness. These attributes were thereafter developed to explain food premium products. The brand management theory used was Kapferer’s brand management strategies, in order to assess ICA’s strategic advantages and disadvantages.   The research was quantitative and the authors utilized a visit self completion questionnaire, in order to describe and investigate the purpose. The questionnaire was handed out according to a systematic sampling method, to customers at the 4 different concept ICA stores in Umeå.   Based on the findings, the authors concluded that in order to increase the profitability of ICAs food premium products, the following strategies should be considered. First, the customer awareness of ICA Selection must be increased and the customers must be educated about the benefits of the product. Moreover, the premium brand should aim to provide value for money, high intrinsic product quality (i.e. taste, ingredients etc) and an improved store image. These factors will help defend the price premium.  Furthermore, to attract buyers, the brand has to have a high enough brand status and a sufficiently attractive and functional packaging. This research has therefore concluded how to efficiently allocate the resources and obtain an increased customer satisfaction. This may in turn increase the profitability of ICA Selection. However, it is of course important to also take into account the external environment, such as the recession and competition, when deciding on the brand strategy.