Influences Behind the Success or Failure of Private Label Goods : A Study of Four Private Label Products

Abstract: Background and Problem: Consumer behavior has become a topic of great interest in today’s society. Considering todays competitive markets it is imperative that companies understand the needs and actions of their customers. There are many influences behind consumers’ decisions of choosing one brand over another. This thesis investigates Swedish consumers and why some private label products succeed, while others fail within different product categories. Purpose: The purpose of this thesis is to investigate how the nature of the good influences Swedish consumers in their decision between private label and national brand goods. Frame of reference: Three theories are applied in order to understand consumer choices: brand loyalty, perceived risk factor and social risk factor. Method: Both a quantitative survey and qualitative interviews have been carried out and applied to the three theories. Coding of interviews was used to understand how the level of influence varies amongst different product types. In order to respond to the research questions, these findings were compared to sales statistics received from Swedish supermarkets. Conclusion: It can be concluded that the three influences affect consumer choices differently,depending on the type of good. Private label brands succeed in low loyalty, low social risk, and low perceived risk goods, while national brands take the lead in high brand loyalty, high social pressure and high associated risk good categories.