The Value Creation of Retail Brands
Retail brands, also called private label brands or store brands (Utgard, 2018), were initially introduced in the market as basic versions of products with low quality and low prices as alternative options to manufacturer or national brands, in order to meet the expectations of market segments with low purchasing power (Ailawadi & Keller, 2004). However, the increased competition and the proliferation of retail chains have forced retailers to increase quality, innovation and differentiation in their own brands and consequently the market share of these brands have been growing (Hyman, Kopf, & Lee, 2010). Grocery stores started developing exclusive own retail brands to meet consumer expectations regarding the quality/price relation and managing brand equity for their brands (Luo, 2018). The consumer perception that the products achieve this outcome has determined the attraction of new customers, satisfaction and store loyalty (Binninger, 2008). Customers understand currently that retail brands are valuable for the relation between price and quality and have a greater preference for them in several product categories and not only food, as it was initially (Hyman et al., 2010; Jara & Cliquet, 2011).
Some retailers have gained exclusive value for their own brands, associating them with certain differentiating attributes and levels of quality (Beristain & Zorrilla, 2011; Cuneo, Lopez, & Yague, 2012). The capital of the brand characterized by the consumers' subjective assessment of distribution value is added in these situations (Semeijn, 2004). These attributes grant the creation of consumer preferences and form a positive brand image (Jara & Cliquet, 2011). In fact, the main attractiveness for retailer own-brands are brand image, what launches a communication challenge to supermarket chains (Loureiro, 2017), considering the stigma associated by the entrance of this brands as low quality and low price options, some years ago (Hyman et al., 2010). The sophisticated packaging, the considerable innovation added and the wide variety of products of retail brands create value for consumers (Ailawadi & Keller, 2004). A study concluded that customer loyalty is higher to retail brands than private brands (Azad, Zarifi, & Hozouri, 2013), also because of the perception about its origin being commonly the same of the manufacturer brands (Cuneo, Milberg, Alarcon-del-Amo, & Lopez-Belbeze, 2019).