Consumers’ Responses to Private Labels: Evaluations Extrinsic Cues Imitations

Over the past few years, private labels have gained larger share in the organized retail sector. The influence of price similarity and dissimilarity on consumers’ judgments of a private label’s quality and purchase intention is studied using a controlled experiment with a sample of 356 respondents. Hypotheses are derived from relevant literature positing the effects of packaging and price on quality perception and willingness-to-buy. We hypothesize that higher price difference between private labels and national brands positively affect quality perceptions and inversely influence purchase intention. Experiments indicate that similarity of a private label packaging with a national brand has a significant effect on perceived quality and purchase intention. Likewise, the interaction effect of price and packaging strategies (imitation), in turn, positively influences the dependent variables. The results are significant the consumer packaged goods category (cookies). Theoretical and managerial implications are discussed followed by the limitation and future research.