Moderating Effects of the Relationship between Private Label Share and Store Loyalty

Nicole Koschate-Fischer, Johannes Cramer, Wayne D. Hoyer

Journal of Marketing · 2014 · Volume 78 · Issue 2

Abstract

A key benefit of private labels for retailers is their potential to increase customers’ store loyalty. However, previous research has not examined how this relationship varies across customers and situations. This study contributes to knowledge in this area by developing a conceptual framework that guides the investigation of the role of four moderating factors in strengthening the private label brand share–store loyalty link: (1) customers’ price-oriented behavior, (2) degree of commoditization of the product category, (3) product category involvement, and (4) the retailer's price positioning. This article draws on a large-scale empirical study using a household panel and questionnaire data for 35 diverse fast-moving consumer goods product categories. The results of this study show that the relationship between private label share and store loyalty is more complex than previous research has suggested. Specifically, the private label brand share–store loyalty link is stronger for customers with high price-oriented behavior, retailers with a low price positioning, and product categories that are less commoditized and have relatively higher involvement.

Keywords

private labels, store loyalty, moderating effects, retail strategy, private label strategy

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