Retailers' multitier private brand strategy and consumers' perceptions of private brand quality

Historically in the United States, national brands make up the majority of sales related to consumer packaged goods whereas brands owned by retailers, known as private brands, continue to grow in both sales and importance to the U.S. consumer. For many years, private brands in the United States consisted only of the standard private brand, which is often a national brand equivalent in quality and equal to or lower than the national brand in price. Recently in the United States, retailers have begun to adopt a strategy used by retailers in the United Kingdom in which private brands are offered in multiple quality tiers that can include a premium private brand and/or an economy private brand. This study focused on understanding if consumers perceive quality differently between a retailer's private brand offerings and between two competing retailers' private brands. The results of the study were that consumers did perceive quality to be different between the standard and economy private brand offerings of one retailer but did not perceive quality to be different between the standard and economy private brand offerings of the other retailer. In addition, the study results indicated consumers did not perceive a quality difference between each retailer's standard and economy private brands.