4-Vignali-Vignali-Pavicic (Credit To Authors Only)

THE CONTRIBUTION OF OWN LABEL PRODUCTS TO A SUPERMARKET BRAND IN THE UK
Claudio Vignali1, Gianpaolo Vignali2, Jurica Pavii3 Recived: 24. 11. 2005. Accepted: 19. 3. 2006. Preliminary communication UDC: 658.626 (410)
In retailing, consumers are faced with an abundance of products and stores to choose from. Through own label products, supermarkets are attempting to differentiate their brand offering from their competitors. As a unique offering, own label brands are influential in attracting new customers and retaining current customers (Miranda and Joshi, 2003). Own label products have developed from an offering of low quality and low price products and are now a means of achieving store loyalty through a differentiated offering of high quality own label products (Corstjens, J. and Corstjens, M., 1999). This area of study was chosen due to the change in the marketing of own label products and to assess how important consumers perceive own label products in their choice of supermarket. Within the qualitative research, two supermarkets, ASDA and Sainsburys, were selected due to their similar market share yet difference in store and product offerings. The quantitative research does not focus on specific supermarkets but investigates respondents attitudes towards their reasons for choice of supermarket and the importance placed on own label products.
BRANDS IN RETAILING In retailing, a brand name can be more than a name or make of product, and is argued that it represents embodiments of special qualities, values and
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Claudio Vignali, PhD, Professor, Leeds Metropolitan University The Arnold Zif, Chair in Retail Marketing Management Leslie Silver International Faculty, Leeds LS1 3HE, Civic Quarter Leeds LS1 3HE, Phone + 44 113 283 6722, E-mail: C.Vignali@leedsmet.ac.uk Gianpaolo Vignali, MSc, Lecturer Leeds Metropolitan University Leslie Silver International Faculty Jurica Pavii, PhD, Associate Professor, Zagreb, University Graduate School of Economics and Business
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Management, Vol. 11, 2006, 1, pp. 53-73 C. Vignali, G. Vignali, J. Pavii: The contribution of own label products to a supermarket brand..
images (Gabriel and Lang, 1995, p.61). Klein (2000) further argues that brands are not products but are now ideas, attitudes, values and experiences. Grace and OCass (2002) argue that a brand name holds economic and symbolic values in consumers eyes. This is further argued by OCass and Frost (2002) who argue that a brand is more than a name and holds symbolic properties. It is these symbolic properties that make brands attractive and give them status in consumers eyes. Brands are important in retailing for both consumers and retailers as a brand name differentiates a product from its competitors. It is a name, symbol, design or some combination which identifies the product of a particular organisation as having a substantial differentiated advantage.(Omalley, 1991 p.107). This differentiation from competitors can be achieved through a fusion of product packaging, brand name, price, quality and promotion. A brand can be defined as an identifiable product, service, person or place, augmented in such a way that the buyer or user perceives relevant, unique added values, which match their needs most closely.(DeChernatony and McDonald, 1992 p. 237). It is these unique added values that transform a product into a brand name. For retailers, a brand provides identification of their products with unique associations to the store and legally protects unique features (OCass and Frost, 2002). For consumers, a brand can identify quality and a recognised brand can reduce search time in a buyers decision-making process. Corstjens, et al. (1999) argue that a brand name has three roles of identity, trust and images and associations. Randall (2000) expands on these three roles and identifies 5 main functions of a brand as a form of identity, a shorthand summary, security, differentiation and added value. Knee (2002) argues that consumers evaluate a brand through the recognisability, meaning, legitimacy and consistency of the offering. A strong brand contributes to the image of a product and aids repeat purchases, which consequently leads to brand loyalty. Rooney (1995) argues that brands attract and keep consumers through the attributes offered by the brand such as value, image, prestige or lifestyle. This is achieved as loyalty to a strong brand is often an aspirational act, enhancing self-image and self-esteem; it reinforces a sense of peer group membership, actual or desired; it reduces worry and uncertainty; and it simplifies choices and saves time (Wileham and Jary, 1997 p.17). A brand name enhances the success of establishing a new product as the association with a strong brand name reduces the risk of purchasing a product of which the consumer has little or no knowledge (Montgomery and Werkerfelt, 1992).
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SUPERMARKETS AS A BRAND A study by Arnold et al. (1983) identifies the most important factors in supermarket choice as location, convenience, low price, fast check out, friendly courteous service, best weekly specials and shopping environment (Kahn and McAlister, 1997 p. 94). Supermarkets have further developed their offerings to meet and exceed these expectations of consumers and through developing their store as a brand have attempted to differentiate their offering in the market place. A stores position in the market is based on the relative aspects of customers and competitors, location, merchandise, atmosphere and marketing mix elements (Ness, Gorton, and Kuznesof, 2002, p. 509). Corstjens, et al. (1999) and Wileham et, al. (1997) argue that although location was once the only major differential in a stores offering, with the increase in mobility of shoppers, location no longer dominates consumers choice in supermarket. Wileham, et al. (1997) further this argument and contend that location holds no brand differentiation in the market place, and this differentiation can be achieved through range and price of products and service. Supermarkets have differentiated their store offerings to create loyalty among their shoppers. Once stores are differentiated one from another, retailers can improve their profits.(Corstjens, et al. 1999, p. 138.) Newman and Cullen (2002) expand on this argument and describe three methods a retailer can adopt in order to turn their store into a brand and thus create a differentiated advantage: develop a reputation for stocking quality branded product. brand its stores on their competitiveness and price. develop a range of own branded products. It is argued that there are actually seven key elements in a retail brand (Foxall, et al. 1994, Corstjens, 1995, Aaker, 1996, and Koskinene, 1999): the store itself, service, fresh produce, own label ranges, communication, price and quality positioning and access to the store, as cited in Landsverk, Hughes and Fearne (2003). Knee (2002) argues that a retailer must ensure that its brand offering must include the characteristics of brand value, a brand system and a brand structure. A retailer can achieve a brand offering through the long term investment in people and skills, in-store brand product development and quality control, in marketing, in consumer research, and in supplier relationships. (Wileham, et al. 1999, p.19). Newman, et al. (2002) support this argument and argue that
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through these methods a retailer can maintain a differentiated position in the market place, which may consequently increase customer loyalty. Consumers evaluate a retailer on the attributes of store layout, fresh food, own label ranges, service, location and price positioning (Landsverk, Hughes, and Fearne, 2003). A retailers offering of a brand is the total service they offer through the range and assortment of goods, the layout of the store and the quality of the staff (Randall, 2000). Own Label Brands With the establishment of quality own label products, retailers are able to differentiate their stock from other retailers and manufacturer/ national brand products, while also holding a greater control over product quality, stock and price, (Uncles and Ellis, 1989, p. 57) and with an outcome of higher gross margins. Moore (1995), cited in Birtwistle and Freathy (1998) furthers this argument, maintaining that these attributes make own label brands an effective tool in gaining competitive advantage over other retailers as the own label products provide the retailer with intangible, symbolic and differential characteristics that a competitor can not imitate. Originally the low price, low quality products were supported by the stores turnover, however it was the introduction of higher quality, higher priced products which improved the stores appeal (Corstjens, et al. 1999). Key Note (2003) uphold this argument and that through the quality, guarantee of satisfaction and good value, own label products can hold the success for retailers. Own brands are influential in attracting new customers and retaining current customers as they add depth and breadth to the retailers existing ranges and provide a promotional pull(Miranda, et al. 2003 p. 44). Through offering products and ranges different to that of their competitors, retailers attempt to create a competitive advantage as exclusivity is built to the supermarket through its unique offering of quality own label brands. It is the high quality store brands that provide differentiation, store loyalty and profitability. In contrast, low quality store brands allow the supermarket to target the price sensitive segments (Corstjens and Lal 2000). Own Labels in the Grocery Sector The UK has one of the most developed own label markets. In the 1980s own label products were significantly brought into the forefront of grocery retailing with Marks and Spencer producing a higher quality of own label products. The new ranges were appealing to consumers and marked a change in
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the way supermarkets were to compete on own label products. Waitrose arose as a competitor to Marks and Spencer, offering the consumers an alternative high quality of own label products (Key Note, 2001). Since then, all leading supermarkets have firmly established higher quality own label products. Sainsburys Taste the Difference, Tescos Finest, and ASDAs Extra Special have all proved to be successful ranges and are clearly marketed as a superior product range through quality, packaging and logos. Own label products have evolved from the simple cost cutting offers and supermarkets now offer a range of own label products to target different segments of the market. It became advantageous for retailers to offer products at different levels of quality and price to attract a broader spectrum of consumers since it was seen that price was important for a certain group of shoppers, but relatively less important to others. Since retailers must go for many segments, they must find benefits which motivate each type of shopper to become loyal to the store. (Corstjens, et al. 1999, p.139). For these reasons, Mintel (2003) identifies the three basic own label offerings and the segments they are aimed at as: ECONOMY: for consumers who perceive quantity to be more important than quality. STANDARD OWN LABEL: for consumers who believe the branded equivalent is not worth the premium price. PREMIUM: for consumers looking for added quality. The development of own-label ranges has grown into new ranges of healthy eating, organic and ranges specifically tailored to children's needs. Mintel (2003) argues that these ranges have contributed to the changing perceptions of own label products and that consumers now have considerable trust in leading grocery retailers and their own label product ranges.
Table 1: Increase of economy own label products
SUPERMARKET OWN LABEL ECONOMY RANGE ASDA:- Smart Price Tesco:- Value Sainsburys:- Economy Number of products in 2000 300 200 130 Number of products in 2002 640 400 140
Source: Mintel 2003.
Although own label products have enjoyed a growth in the market, this growth is not evenly spread across all product categories in the grocery sector. Mintel (2003) identifies the chilled packaged goods as a strong sector of penetration for own label products and claims that own label products even dominate some categories to the virtual exclusion of national brands in the
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chilled foods sector.
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Hypotheses As it was discussed earlier, there are many contributions to the image of a supermarket, including own label products, store aesthetics, assortment and variety of national product ranges, price of products, service and quality of experience in store. There has been a clear improvement in own label brands with the emphasis moving away from the economy ranges, therefore: H1: Consumers now look to quality as the most important factor in the choice of own label products. Consumers are still cautious in some areas, and look to familiarity and trust in national brands when a purchase is deemed risky, therefore: H2: Consumers are still unwilling to buy own label products in certain product categories. Supermarkets are developing their offering of a store into a brand offering. The leading four supermarkets are positioning themselves through differentiation in order to secure market share, therefore: H3: Consumers are looking to a supermarket brand as a whole in their choice of supermarket. Own label products are important to supermarkets in differentiating their brand offering from the competitors' and build brand loyalty, therefore: H4: Own label products are an important factor for consumers in their choice of supermarket. Methodology The research entailed in this article consisted of both primary and secondary research. Through the secondary research - conceptual framework of own label products in the grocery sector has been developed and through primary research methods the issues surrounding own label have been investigated. It was necessary to collect responses from a broad range of age groups, salary brackets and supermarkets visited, in order to gain a full understanding of the market. The aim was to, through gaining information regarding the respondents age group and salary bracket, gather the relevant information to analyse the influential factors against the data collected. A proposed figure of one hundred questionnaires to be collected was set in order to obtain a valid result.
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The questionnaires were designed to fulfil the objective of analysing the perceptions of own label products through questions nine and ten. Question nine was asked in order to understand which product categories of own label products the respondents were willing to purchase. The question was constructed from the information gained from ASDAs and Sainsburys websites (www.asda.com and www.sainsburys.co.uk). In question ten, respondents were asked to rank each factor according to the degree of importance to them when purchasing own label products. A Likert scale was used with 1= very important, 2= important, 3= somewhat important, 4= neutral, 5= somewhat not important, 6=not important, 7= not at all important. A scale of seven points was chosen as it allowed for a broader range of respondents answers and therefore a clearer analysis of the importance placed on the attributes of own label products. To achieve the objective of determining the reasons for choice in supermarket, question six was constructed from the information collected from relevant literature (Kahn et al. 1997, Corstjens et al. 1999 and Newman et al. 2002). This information was converted into choices available for the respondents to choose from. One hundred questionnaires were administered and seventy questionnaires were collected and the results were entered into SPSS for analysis. This gave a response rate of 70%. Among the responses, 46 respondents were female and 24 male, which equates to 65.7% and 34.3% respectively. From the seventy completed questionnaires, there was a heavy percentage of 18-25 year olds. This was to be expected as many questionnaires were administered at Leeds Metropolitan University among students. The percentage of respondents in the 42-49 and 50+ brackets were exactly the same with 20% each. The age brackets that were not as evenly represented were 26-34 with 12.8% and 35-41 with 5.71%. There were no responses from the under 18 bracket. Responses were obtained from every age bracket in the targeted sample. The largest percentage in the salary bracket of respondents is the under 10,000 group with 41.43%. This may be due to the amount of 18-25 year old respondents, who were mainly students and therefore not in full time jobs. This segment will be compared against the price of own label products to analyse whether these respondents are price sensitive. In order to gain an understanding of the frequency of respondents supermarket visits and ensure that participants visit a supermarket, the
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respondents were asked about the frequency of their visits. 91.43% of respondents visit a supermarket every two weeks or more frequently. Figure 1. illustrates that each major supermarket brand is represented by the respondents. This range of responses allows for an analysis of the market. Other supermarkets recorded as the main grocery shop included Marks and Spencer, CO-OP and Waitrose.
Location No. of respondents 80 60 40 20 0 Factors in choice of supermarke t Supermarket chain Price range Special offers Range of own brands Range of national brands Good service Good value Good quality of products Parking Figure 1: Factors in choice of supermarket
It is clear that respondents do consider more than one factor of a supermarket offering in their choice of patronage to a supermarket as supported by Kahn et al (1997), Randall (2000), Ness et al (2002). This question reveals which factors are influential to consumers in their choice of supermarket. However, it does not show the importance of these factors to consumers.
Table 2: Important factor in choice of supermarket (1)
Importance of factors in choice of supermarket Location Good value Good quality of products Price range Parking Special offers Own label range National brand ranges Count 35 9 8 7 4 3 2 1 Col % 50.7% 13.0% 11.6% 10.1% 5.8% 4.3% 2.9% 1.4%
In total, eight factors were selected as respondents' most important choice in supermarket. Location accounted for 50.7% of responses. Only supermarket chain and good service were not chosen as the first factor of choice in supermarket. This data illustrates that location is very important in choice of supermarket to respondents. However, just under 50% of respondents do not consider location as the most important factor, which supports Corstjens et al (1999) who argue that location is an important factor in consumers' choice of supermarket but it does not predominantly influence all consumers.
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Importance of factors in choice of supermarket Good value Price range Special offers Parking Good service Good quality of products Location National brand ranges Supermarket Chain Own label range Count 13 10 9 8 7 7 6 5 2 1 Col % 19.1% 14.7% 13.2% 11.8% 10.3% 10.3% 8.8% 7.4% 2.9% 1.5%
Ten factors were selected by respondents as their second most important choice in supermarket. The most frequent response in this category was good value with 19.1% of the share. Price range and special offers were claimed by 14.7% and 13.2% of respondents respectively. Good service accounted for 10.3% of respondents' second important factor, whereas it did not account for any responses in the most important factor. The factors selected show a more even spread of responses and do not illustrate a substantial preference for one factor. Therefore, respondents are more aware of different factors in their second factor of choice in supermarket.
Importance of factors in choice of supermarket Parking Price range Good quality of products Special offers Location Good value Own label range National brand ranges Other Good service Count 11 9 9 8 6 6 5 5 2 1 Col % 17.7% 14.5% 14.5% 12.9% 9.7% 9.7% 8.1% 8.1% 3.2% 1.6%
In respondents' third most important factor of supermarket choice, parking accounted for the largest percentage share with 17.7%. Price range and good quality of products both had an equal response of 14.5% of the responses each. From these statistics it is clear that accessibility is an important factor in choice of supermarket. Supermarket chain did not feature as a factor, however of the two other factors selected, these included familiarity of supermarket layout which means the respondent visits the same store but not purely because of supermarket chain. The second other factor was the overall range of all products, which shows that equal importance was placed on national ranges and own label ranges.
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Overall, the most important factor to respondents in choice of supermarket was location. The second most important factor was good value and the third was parking. Once location was accounted for, respondents considered a range of factors in choice of supermarket and in the offerings of a supermarket. Good value is clearly important to respondents but does not equate to purely low price. The range of both national brands and own label brands do not feature heavily as a factor in choice of supermarket. Therefore, it is clear that respondents do not look to the products on offer but to the offerings of the supermarket brand as a whole such as the value of shopping at a certain supermarket, or the overall price range, special offers and to the quality of products. Added values of service did feature as an important factor illustrating that respondents are considering their shopping experience as a whole and not purely basing their shopping location on the lowest price. Supermarket chain was only selected by one respondent. The second important factor in choice of supermarket however was selected by 15.7% of respondents in question six. This illustrates that consumers do not base their choice of supermarket on brand name alone but look to the brand offerings of the chain first. This data supports Kahn et al (1997) and Corstjens et al (1999) who both argue that location is the most important factor but following that other factors clearly are important in consumers 'choice of main grocery shopping. This clearly illustrates that retailers must do more than just find the right location as consumers look to the brand offering as a whole in their choice of supermarket
Baby Bakery & Cakes Beers, Wines & Spirits Biscuits Cereal Condiments Cooked Meats Dairy Frozen Fruit & Veg Laundry & Household Meat, poultry & fish Organic and 'Free From' Pet care Ready Meals Snacks & Crisps Soft Drinks Tinned & Packet Goods Toiletries & Pharmacy World Food Ranges Hot Drinks
45 40 35 No. of People 30 25 20 15 10 5 0 Categories of Ranges
Categories of Ranges
Figure 2: Categories of own label products purchased 64
This data does not support the argument that own label products are important in building loyalty to supermarkets, as argued by Kahn et al (1997) Corstjens et al (1999), Key Note (2003) and Miranda et al. (2003). Own label products only accounted for 15 responses, and was only selected by two respondents in the first most important factor, one respondent in the second important factor, and five respondents in third most important factor. This does illustrate that some consumers are looking to own label products in their choice of supermarket, but the majority are looking to the factors of location, value, parking, price and quality when choosing which supermarket to frequent. In order to provide an analysis of own label attributes it was necessary to asses whether respondents purchased own label products. Of the seventy respondents, 98.57% purchase own label products. Only one respondent did not purchase own label products. The most frequent response was Frozen Produce with 41 respondents claiming that here they were willing to purchase. Dairy had 40 responses and Bakery and Cakes had 39 responses. There was no clear outright product category which a strong majority of respondents would be willing to purchase. This illustrates that, although 98.57% of respondents do purchase own label products, there is no clear leadership of own label product ranges over national brands and there are categories in which respondents are not willing to purchase own label products. The categories with the lowest responses were Baby and Pet Care, with only 3 and 5 respondents respectively claiming they would be willing to buy own label products in these ranges. However these responses cannot be fully analysed due to the lack of knowledge regarding the respondents' background to ascertain whether they have a baby or pet. This is therefore an oversight in the collection method. Further investigation would be needed to find out the respondents' ownership of pets and parental status. The next lowest responses included Beers, Wines and Spirits and Hot Drinks, both with 13 responses. Therefore, 81.4% of respondents did not select these categories as the products they would be willing to purchase. This may be due to strong national brand loyalty in these categories or a perceived risk in the purchase in which the own label brand does not hold a strong perceived quality in the consumers' eyes and therefore make the purchase too risky to switch brands. Mintel (2003) identified alcoholic and carbonated drinks as categories where there was less own label penetration. This data to some extent supports these findings. However, carbonated drinks were not categorised as a single
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category but were intended to fall within soft drinks. This error in results collection obstructs the support of carbonated drinks as a category of improvement for own label products. This data supports the hypothesis that consumers are still unwilling to purchase own label products in certain categories. This may be due to consumers not evaluating own label brands to be of comparable quality compared to the established national brands in these categories. Further investigation would need to look at the reasons for consumers not purchasing these categories.
Table 5: Percentage table of importance placed on attributes of own label products
Attribute Quality Freshness Value Price Quantity Loyalty Image Packaging Advertising Cum percent of importance 97.1 97.1 94.2 84.1 75.4 42.4 36.4 17.9 17.9 Neutral percent 1.4 1.4 0 2.9 15.4 21.2 19.7 22.4 14.9 Cum percent of not important 1.4 1.4 5.7 12.9 9.2 36.4 43.9 59.7 67.2
Table 3. illustrates the cumulative percentages of the differing degrees of importance placed on the attributes of own label products, along with the neutral percent and the cumulative percent of the differing degrees of unimportant responses. The two most important attributes were quality and freshness. These were followed by value, price and quantity. The least important factors to respondents included advertising, packaging and image of the own label brand. From this data it is clear that price is no longer the determining factor in choice of own label products for all consumers, which supports the arguments of Corstjens et al (1999) and Blythe (1997). This data supports the hypothesis that consumers look for quality in their purchase of own label products. With 84.1 percent of respondents claiming differing degrees of importance regarding price in their purchase decision on own label products, price is still an important factor. However, it is the attributes of quality and freshness which received the highest percent of respondents claiming a degree of importance,
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both 97.1 percent. To further investigate the importance of price and quality, cross tabulation has been used against salary to assess whether salary bracket has an affect on the importance of these attributes. The row percentages show the responses for each salary bracket due to the uneven spread of results.
Table 6: Cross tabulation of importance of quality against salary bracket
Importance of quality of own label products somewhat very somewhat not important important important neutral important Row % Row % Row % Row % Row % under 10,000 31.0% 51.7% 13.8% 3.4% 10,001- 19,999 84.6% 7.7% 7.7% 20,000- 29,999 78.6% 21.4% 30,000- 39,999 85.7% 14.3% 40,000+ 66.7% 33.3%
Salary bracket of subject
Quality appears to have a degree of importance in all salary brackets. The highest percentage of respondents in all but under 10,000 bracket, claimed quality was very important In the under 10,000 bracket over half of these respondents claimed quality as important. The majority of all respondents in all salary brackets claimed quality was important and very important, this therefore supports the hypothesis that consumers do look for quality as an important factor in own label products. The importance of quality may explain respondents' unwillingness to purchase own label products in certain categories (Question nine). If consumers place such a high degree of importance on quality, own label brands may not hold the same weight in their brand name in comparison to national brands to overcome the risky purchase. As Batra et al. (2000) argue, consumers are purchasing own label products in low risk categories.
Table 7: Cross tabulation of importance of price against salary bracket
very important Row % Salary under 10,000 51.7% bracket of 10,001- 19,999 61.5% subject 20,000- 29,999 38.5% 30,000- 39,999 50.0% 40,000+ 16.7% Importance of price of own label products somewhat somewhat not not important important neutral important important Row % Row % Row % Row % Row % 34.5% 3.4% 10.3% 23.1% 15.4% 46.2% 7.7% 7.7% 12.5% 12.5% 50.0% 16.7% not at all important Row %
25.0% 16.7%
The cumulative percentages of respondents claiming a differing degree of importance in price clearly indicates that price sensitivity increases as salary bracket decreases. The highest cumulative percentage fell within the under
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10,000 salary bracket with 89.6%, in the 10,001-19,999 and 20,00029,999 salary bracket cumulatively 84.6% and 84.7% respectively, claimed a differing degree of importance in the price of own label products. The lowest cumulative percentages fell with the 30,000-39,999 salary bracket in which 75% of respondents claimed price was to any degree important to them and the 40,000+ salary bracket in which 66.7% of respondents claimed that price was to any degree important to them. In comparison to the cumulative percentages of price as not important to any degree, 25% of the 30,000-39,999 salary bracket claimed price was not at all important. The highest cumulative percentage fell with the 40,000+ salary bracket with 33.4% of respondents claiming price was to differing degrees not important. This data illustrates that a higher importance is placed on price in the lower salary brackets. As Corstjens et al (1999) argue, price is only important to certain shoppers and is less important to others. This data suggests that the importance of price is dependent on respondents' salary bracket and the importance decreases as salary increases.
60 No. of responses Budget 40 20 0 Range Standard Premium Dieting Organic Dietary needs Childrens
Figure 3: Product ranges purchased
This question was asked to gain an understanding of which ranges of own label products respondents were willing to purchase. Initially as own label products were introduced as a budget economy option, the question was intended to evaluate the purchase of the Budget range in comparison to the other own label ranges now available. Both the Standard and Premium ranges have a higher share of responses. 48 respondents claimed they would purchase a standard own label product which was the highest response with 68.6%. 44 respondents claimed they would purchase a premium own label range which equalled 62.9% of the respondents. 27 respondents claimed they would purchase a Budget range product; lower than both the response for the Standard and Premium ranges.
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The lowest response rate was the Dietary needs and Childrens ranges, with only six and seven respondents respectively claiming they would purchase these ranges. This data is not sufficient to claim that consumers are unwilling to purchase these own label products as there was no information gained about the respondents as to whether they had children or dietary needs. This oversight in collection precludes analysis of the purchase of these ranges and further investigation would be needed to ascertain whether respondents were purchasing for children or pets. The following cross tabulation results analyse the correlation between respondents' importance on quality and purchase of budget, standard and premium ranges in order to determine which ranges are purchased against the respondents needs for quality.
Table 6: Cross tabulation of importance of quality against purchase of budget own label ranges
Importance of quality of own label products somewhat very somewhat not important important important neutral important Col % Col % Col % Col % Col % 2.4% 68.3% 57.1% 20.0% 100.0% 29.3% 42.9% 80.0% 100.0%
Budget ranges
n y
(n= no, y= yes) From the above results it is shown that a higher percentage of consumers who claim quality is very important and important do not purchase budget own label ranges. A higher percentage of respondents who claim quality is somewhat important do purchase budget own label ranges. These respondents who place less emphasis on quality however did not indicate a degree of importance in desire for quality. This data indicates that the more quality sensitive respondents are, the less likely they are to purchase budget own label brands.
Table 7: Cross tabulation of importance of quantity against purchase of budget own label ranges
very important Col % 66.7% 33.3% Importance of quantity of own label products somewhat somewhat not not important important neutral important important Col % Col % Col % Col % Col % 61.1% 52.6% 50.0% 100.0% 38.9% 47.4% 50.0% 100.0% not at all important Col % 100.0%
Budget ranges
n y
Mintel (2003) argues that budget ranges are aimed at consumers who perceive quantity to be more important than quality. However, Table 10 does not support this as a lower percentage of respondents claiming quantity as
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having a degree of importance to them claim to purchase budget own label compared to those that do not.
Table 8: Cross tabulation of importance of quality against purchase of standard own label ranges
Importance of quality of own label products somewhat very somewhat not important important important neutral important Col % Col % Col % Col % Col % 2.4% 31.7% 23.8% 40.0% 65.9% 76.2% 60.0% 100.0% 100.0%
Standard ranges
n y
Table 8. shows the column percentages of the cross tabulation results for the importance of quality against the purchase of own label products. A higher percentage of respondents who claim a differing degree of importance in quality, purchase standard own label ranges. All 100% of respondents who claimed they were neutral and perceived quality as somewhat not important, purchase standard own label products. This data indicates that quality sensitive respondents are likely to purchase standard own label ranges. Supermarkets have been trying to improve the quality of their standard own label ranges and this appears to be successful with the quality conscious respondents purchasing own label products.
Table 9: Cross tabulation of importance of quality against purchase of premium own label ranges
Importance of quality of own label products somewhat very somewhat not important important important neutral important Col % Col % Col % Col % Col % 2.4% 29.3% 28.6% 100.0% 100.0% 68.3% 71.4% 100.0%
Premium ranges
n y
Table 9. shows the column percentages from the cross tabulation of the purchase of premium own label ranges against the importance of quality. From this data it is clear that quality is important to respondents and a higher percentage of respondents who claim quality is very important and important purchase premium ranges than those who do not purchase premium ranges. Premium ranges are positioned as the highest quality of an own label offering and therefore cater for the quality conscious. From the three tables, it is clear how important quality is to consumers. It also shows an increase in the purchase of own label products against the
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increase in quality of the ranges. The figures for standard and premium purchases are similar and indicate that supermarkets own label offerings are improving not only in premium ranges but also in the standard range offering. Even the budget ranges, originally seen purely a cheap and basic offering are purchased by the quality conscious respondents. Raju (1995) argued that own label products were purchased by price and value sensitive consumers, however this data illustrates that quality conscious consumers now purchase own label products.
Importance of own label products to choice of supermarket brand Frequency 6 5 16 17 6 8 12 70 Percent 8.6 7.1 22.9 24.3 8.6 11.4 17.1 100.0 Valid Percent 8.6 7.1 22.9 24.3 8.6 11.4 17.1 100.0 Cumulative Percent 8.6 15.7 38.6 62.9 71.4 82.9 100.0
Table 10: Importance of own label products
Valid
very important important somewhat important neutral somewhat not important not important not at all important Total
The highest response to this question fell with 24.3% of respondents claiming they were neutral. The cumulative percentage of respondents who claimed own label products were to any degree important was 38.6% compared to the cumulative percentage of respondents who claimed own label products were to any degree not important being 37.1%. This figure shows that there is a marginal preference for importance of own label products. This spread of figures illustrates that consumers, although purchasing own label products, still do not look to own label products as a predominant determinant factor in their choice of supermarket. This data does not allow for a complete justification of the hypothesis that own label products are an important factor to consumers in their choice of supermarket. Although a higher percentage of respondents fall into the important categories than the unimportant categories, the number of respondents who claim to be neutral diminishes from this figure. This is in comparison to question six where only 21.4% of respondents claimed that they considered own label products in their choice of supermarket. In this question, 38.6% claimed that own label products were to differing degrees important. This may be due to the wording of the question. In question six, respondents were given a list of options to choose from, whereas this question gave them the opportunity to rate the level of importance of own label products. This may be interpreted that consumers do consider the brand offering as a whole, but own label products are growing in importance with consumers.
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It is argued that own label products build loyalty with consumers (Kahn et al 1997, Corstjens et al 1999, Miranda et al. 2003 and Key Note 2003). This data neither fully supports this argument nor does it support Richardson et al (1994) who argue that consumers do not distinguish among the different offerings of supermarkets. This data shows, with 38.6% of respondents claiming a degree of importance of own label products in their choice of supermarket, that there is still the potential of growth within this sector of supermarket retailing. CONCLUSION From the research conducted it was apparent that own label brands were not the only method of achieving a brand offering. Consumers are looking to a range of attributes and with the supermarket industry being so competitive, consumers are able to demand more from their supermarket. Own label products are growing in importance in consumers' choice of supermarket. However, they are not the sole determinant in choice of supermarket. This research has therefore highlighted that own label products are still growing in importance and retailers must continue to build their offering into a brand offering if they are to secure and increase their market share. Through the use of questionnaires, it became apparent that consumers are not as willing to purchase certain categories of own label products. This data therefore supports Batra et al. (2000) that consumers are prone to purchase own label products in low risk categories. It is within the high risk categories that supermarkets can continue their expansion of own label ranges. To do this, the retailer must build consumer confidence with the overall supermarket brand, therefore transferring confidence to the own label ranges. As Aaker (1996) argues, a strong brand name can aid consumers in their choice of brands. REFERENCES 1. 2. 3. 4. Aaker, D. A. (1996) Building Strong Brands, New York, Free Press. Barbour, S. & Kitzinger, J. (1999) Developing Focus Group Research: Politics, Theory, & Practice. London, Sage Publications Ltd. Batra, R. & Sinha, I. (2000) Consumer-level factors moderating the sources of private label brands across product categories: the role of perceived risk. Journal of Retailing. 76 (2) pp.175-191. Birtwistle, G. & Freathy, P. (1998) More than just a name above the shop: a comparison of the branding strategies of two UK fashion retailers. International Journal of Retail & Distribution Management, 26 (8), pp. 318-323.
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Blaxter, L., Hughes, C. & Tight, M. (2001) How to Research. Second Edition. California, Sage Publications Inc. Blythe, J. (1997) The Essence of Consumer Behaviour. Hemel Hempstead, Prentice Hall. Burns, R. B., (2000) Introduction to Research Methods. Fourth Edition. London, Sage Publications Ltd. Corstjens, J., & Corstjens, M. (1999) Store Wars: The Battle for Mindspace and Shelfspace. Chichester, John Wiley & Sons Ltd. Corstjens, M. & Lal, R. (2000) Building Store Loyalty Through Store Brands. Journal of Marketing Research. 37 (3) August, pp.281-292. Chrzanowska, J. (2002) Interviewing Groups and Individuals in Qualitative Market Research. London, Sage Publications Ltd. De Chertony, L., & McDonald, M. H. B., (1992) Creating Powerful Brands. Oxford, Butterworth Heinemann. Denscombe, M. (1998) The Good Research Guide: for small-scale social research projects. Buckingham, Open University Press. Fowler, F. J. (1993) Survey Research Methods. Second Edition. London, Sage Publications Ltd. Gabriel, Y. & Lang, T. (1995) The unmanageable consumer: Contemporary Consumption and its Fragmentations. London, Sage Publications Ltd. Grace, D. & OCass, A. (2002) Brand associations: looking through the eye of the beholder. Qualitative Market Research: An International Journal, 5 (2), pp. 96-111. Hakim, C. (1987) Research Design: Strategies and choices in the design of social research. London, Routeledge. Hind, D. (1994) Transferable Personal Skills. UK, Business Educational Publishers Ltd. Kahn, B. E. & McAlister, L. (1997) Grocery Revolution: The New Focus on the Consumer. Reading, Addison-Wesley Educational Publishers Ltd. Key Note (2001) Own Brands. Ninth Edition. Hampton, Key Note Publications. Key Note (2003) Own Brands.[Internet] Tenth Edition. Hampton, Key Note Publications. Available from:<http/www.keynote.co.uk/kn2k1/>[Accessed 3 March 2004] Klein, N. (2000) No Logo. London, Harper Collins Publishers. Knee, C., (2002) Learning from experience: five challenges for retailers. Journal of Retail & Distribution Management, 30 (11) pp. 518-529. Krueger, R. A. & Casey, M. A. (2000) Focus Groups: A practical Guide for applied research. Third Edition. London, Sage Publications Ltd.
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Tesch, R. (1990) Qualitative Research: Analysis Types and Software Tools. New York, Falmer. Uncles, M. & Ellis, K. (1989) The Buying of Own Labels. European Journal of Marketing, 23 (3), pp. 57-70. Walsh, M. (2001) Research Made Real: A guide for students . Cheltnam, Nelson Thornes Ltd. Wileham, A. & Jary, M. (1997) Retail Power Plays: From Trading to Brand Leadership. Basingstoke, Macmillan Press Ltd. www.asda.com[Internet] Available from: <http://www.asda.com> [Accessed 12 December, 2005] www.sainsburys.co.uk [Internet} Available from: <http://www. sainsburys.co.uk>[Accessed 12 December, 2005]
DOPRINOS VLASTITIH TRGOVAKIH MARKI RAZVOJU TRINE MARKE SUPERMARKETA U VELIKOJ BRITANIJI Saetak
Potroai se u maloprodaji suoavaju s obiljem proizvoda i maloprodajnih lokacija. Uz pomo vlastitih trgovakih marki, supermarketi pokuavaju diferencirati ponudu svoje trine marke u odnosu na konkurente. Kao jedinstveni oblik marketinke ponude, vlastite trgovake marke mogu posluiti kao uinkoviti oblik privlaenja novih, te zadravanja postojeih kupaca. Iako su se razvile iz ponuda niske kvalitete i niske cijene, danas trgovake marke predstavljaju nain zadravanja lojalnosti kupaca uz pomo diferencirane ponude visoke kvalitete. U ovom je radu izabrana opisana problematika istraivanja zbog promjena u marketingu proizvoda vlastitih trgovakih marki, kao i potrebe za procjenom koliko su kupcima vane vlastite trgovake marke u izboru supermarketa. Kvantitativna metodologija uz pomo koje je provedeno istraivanje ne usredotoava se na specifine supermarkete, ve utvruje stavove ispitanika povezane s izborom supermarketa i znaajem kojeg pridaju vlastitim trgovakim markama.
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THE CONTRIBUTION OF OWN LABEL PRODUCTS TO A SUPERMARKET BRAND IN THE UK

Source: Mintel 2003.

chilled foods sector.

Table 3: Important factor in choice of supermarket (2)

45 40 35 No. of People 30 25 20 15 10 5 0 Categories of Ranges

Figure 2: Categories of own label products purchased 64

Salary bracket of subject

Figure 3: Product ranges purchased

Table 10: Importance of own label products

24. 25. 26. 27. 28. 29. 30. 31.

32. 33. 34. 35. 36. 37. 38. 39. 40.

41. 42. 43. 44. 45. 46.

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