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1. Introduction
Since the introduction of private label products, there has been a substantial increase in their market share. The annual sales revenue of private label brands worldwide now approaches one trillion US dollars (Kumar and Steenkamp, 2007; Wu et al., 2011) with penetration highest in Europe (Hoch, 1996; De Wulf et al., 2005). This is due in part to higher retailing concentration, private labels’ evolution in quality, and positive reception by the majority of consumers (Ailawadi and Keller, 2004; Anselmsson et al., 2007). Private labels brands, also known as store brands, retailer brands, and distributor brands are owned, developed, and managed by one retailer (Kotler and Armstrong, 1996). Retailers build and develop private labels in order to increase profit and differentiation (Richardson et al., 1996; Wu et al., 2011), retain customers, and increase market share (Hoch, 1996; Wu et al., 2011). As a result retailers have develop their brands into an alternative brand choice available to customers by offering a wider variety of private label products, improving their quality and image (Choi and Huddleston, 2013). However, private labels brands were traditionally perceived as a low-quality alternative with their primary appeal rooted in lower prices than manufacturer brands (Bao et al., 2011).
Due to the growing importance of private label brands, conceptual and empirical research has expanded its focus beyond manufacturer brands to more deeply investigate these phenomena (Ailawadi, 2001; Karry and Zaccour, 2006). More specifically, research on private labels addresses consumer proneness to purchase private labels compared to manufacturer brands (Hoch, 1996; Ailawadi, 2001; Garretson et al., 2002); and is related to the variables influencing consumers’ attitude and preferences toward private labels and their consumption (Baltas, 2003; Semeijn et al., 2004).
New factors may become relevant to the private label brands’ success and growth, since they have expanded their appeal beyond price consciousness (Vahie and Paswan, 2006; Wu et al., 2011). First, consumers increasingly use store image and retailer corporate reputation as cues for reducing the purchasing risk associated with private label brands (Semeijn et al., 2004). Second, it is becoming more common for the current manufacturers of private label products to be revealed to consumers, either through manufacturer identification programs on product...