An Empirical Investigation of Consumer Price Perception and Reputation Dimensions’ Effects on Attitude Toward Private Label Brands

University essay from Umeå universitet/Handelshögskolan vid Umeå universitet; Umeå universitet/Handelshögskolan vid Umeå universitet

Abstract:

The study empirically investigated the effects of consumer price perception dimension and reputation dimension on attitude toward private label brands among young Swedish consumers. Consumer price perception dimension includes value consciousness, price consciousness, and price-quality association factors. Reputation dimension includes retailer’s reputation, existence of word-of-mouth (WOM), positive WOM, and negative WOM.

Previous studies have found that factors under the consumer price perception dimension have an impact on attitude toward private label brands. The current study argues, based on theoretical framework, reputation dimension could also be considered as having an impact on attitude toward private label brands but that this has not been investigated before.

Measurement scales for consumer price perception dimensions were taken from Baltas (1997) and Burton et al. (1998). New measurement scales were developed for factors under the reputation dimension. The reliability and validity of all the factors used in the study have been discussed.

A multiple regression analysis was conducted where the private label attitude was the dependent variable and all factors under the two dimensions investigated in the study were the independent variables. The results of the analysis showed that value consciousness and price consciousness factors under the consumer price perception dimension have significant relationships with attitude toward private label brands. Similarly, retailer’s reputation, positive WOM, and negative WOM under the reputation dimension have significant relationships with attitude toward private label brands. Specifically, these three reputation dimension factors were found to have more influence on attitude toward private label brands among young Swedish consumers than the two factors found significant under the consumer price perception dimension.

The major implication for the Swedish retailers is that they should put more emphasis on their own reputation (retailer’s reputation factor) and on positive WOM to develop favorable attitude toward private label brands among young Swedish consumers. They should also fight any negative WOM about their private label brands. In addition, the Swedish retailers should try to promote the quality aspect of their private label brands to the young Swedish consumers as value consciousness was found to be a significant determinant across the most of the demographic variables studied here.

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