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Procedia - Social and Behavioral Sciences 175 (2015) 522 528

International Conference on Strategic Innovative Marketing, IC-SIM 2014, September 1-4, 2014,
Madrid, Spain

Identifying Drivers of Purchase Intention for Private Label Brands.


Preliminary Evidence from Greek Consumers
N. Kakkosa,*, P. Trivellasb, L. Sdroliasc
a,,c
b

Department of Business Administration, Technological Educational Institute of Thessalia, Larissa, Greece


Department of Logistics Management, Technological Educational Institute of Sterea Ellada, Thiva, Greece

Abstract
Much attention in the marketing literature has been placed on consumer behavior issues relating to branded products including
perceived value, purchase intentions and loyalty to brands. In light of an economic crisis context, this empirical study aims to
identify drivers of consumers intention to purchase private label (store) brands. Following a review of the relevant literature, a
survey was conducted among consumers in three supermarket chains offering private label products in Greece. Based on data
collected from a sample of 171 respondents, this study provides some preliminary evidence on various drivers of consumers
intention to buy store brands including brand awareness, perceived value, quality and risk while controlling for age, household
size and income effects. Intentions to purchase private labels are found to be influenced by perceptions of risk, value for money,
social value and brand awareness. These findings have useful managerial implications in terms of the marketing such brands in
the currently uncertain, due to the crisis, business context.

2015 The
TheAuthors.
Authors.Published
Published
Elsevier
2015
byby
Elsevier
Ltd.Ltd.
This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review
under responsibility of I-DAS- Institute for the Dissemination of Arts and Science.
Peer-review under responsibility of I-DAS- Institute for the Dissemination of Arts and Science.
Keywords : Private labels; purchase intention; brand awareness; perceived value; quality; perceived risk

1. Introduction
While branding can be seen as a mechanism whose key function is to differentiate products from others available
in order to remain competitive (Wood, 2000), there has been a noticeable shift during the last two decades in terms
of consumer preferences towards Private label (PL) or store brands (Semeijn et al.2004). In the food industry in

* Corresponding author. Tel.: +302410684648; fax: +302410684580.


E-mail address: n.kakkos@teilar.gr

1877-0428 2015 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).

Peer-review under responsibility of I-DAS- Institute for the Dissemination of Arts and Science.
doi:10.1016/j.sbspro.2015.01.1232

N. Kakkos et al. / Procedia - Social and Behavioral Sciences 175 (2015) 522 528

particular, there has been an increase in store brands market share globally. In the US alone, there has been a 40%
annual increase in PL sales during the last decade; in Europe, store brands constantly gain market share as shown by
a five country example where PL sales account for 40% of total sales (Private Label Manufacturer Association,
2011a,b). Indeed, customers benefit from store brands lower prices (by an average of 30%) relative to national
brands (ACNielsen, 2005). In Greece in particular, it is noted a PL product sales increase of about 20%and PL sales
growth estimates of about 28% (Skoufou, 2011).
Retailers also prefer PL brands because they can induce store traffic, offer higher control over shelf space, an
enhanced bargaining power over manufacturers (Garretson et al.2002) and higher profit margins (Ailawadi et
al.2008). This is mainly due to the economies of scale achieved, the smaller number of middle men (Olsen & Sallis,
2010) and the prices retailers pay that is close to marginal costs (Ailawadi et al., 2008). PL brands can create
competitive advantage for retailers as they can be found in specific stores only, increase store switching barriers,
strengthen retailers image and offer value for money, thereby contributing to customer loyalty (Anselmsson &
Johansson, 2009). Having acknowledged the above, this study focuses on identifying drivers of consumers
intentions to purchase store brands. In fact, the study undertakes a survey to investigate and provide empirical
evidence on likely links between Intentions to buy PL branded products with such factors as brand awareness,
perceived quality, value and risk in the context of supermarkets in Greece. While the findings are preliminary only
and should be treated with caution, they have useful implications for store brand management (see also section 5).
2. Literature review and research hypotheses development
2.1. Customers intention to purchase PL products.
Purchase intention represents the possibility that consumers will plan or be willing to purchase a certain
product or service in the future (Wu et al. 2011, p.32) and it is considered as the exactly precedent step from
indulging in the actual buying behavior (De Magistris and Gracia, 2008). Purchase intention measurements actually
reflect future buying behavior (Grewal et al., 1998), they are inexpensive, easily understood and interpreted and
thus, used in sales forecasting (Armstrong et al., 2000). Such data are widely used to predict demand for new
products (Park and Stoel, 2005) influencing at an operational level, production schedule regulation, advertising,
distribution and pricing policy (Morwitz et al., 2007). To study what drives intentions to purchase PL brands, one
needs to acknowledge first, that buying decisions can be influenced by various needs including physiological and/or
socio-psychological (e.g. prestige, recognition, comfort) in order to then, focus on factors likely to form customer
attitudes towards PL branded products.
2.2. Brand awareness
Brand awareness reflects ones ability to recall and recognize a brand within a given category in sufficient detail
to make the purchase (Kotler & Keller, 2006). High brand awareness among consumers suggests high familiarity
with a brand and reduced risk perceptions while consumers perceived product value tends to remain unaffected by
price (Lin, 2008). Indeed brand image and awareness help customers decisions when objective assessments of a
product cannot be made (Lin, 2008). Brand awareness has been linked to purchase intentions because consumers,
prior to a purchase, tend to extract from their memory products that are aware of. While consumers seem in general,
to be more familiar with national brands, than with PL brands (Garretson et al. 2002), the brand that is easier to
recall, is the one more likely to be bought (Radder & Huang, 2008).This is likely to apply in the store brand context,
too:
H1: Brand awareness is positively related to consumers intention to purchase PL products.
2.3. Perceived quality
Quality endorses all product attributes and features that are responsible for satisfying users needs (Mendez et
al. 2008). In effect, perceived quality is the way that consumers judge a product by relying on their recent
consumption experience. Perceived quality is a key criterion for product assessments; it influences buying decisions
and behavior and in effect, purchase intentions (Cronin et al. 2000). More specifically, products meeting or

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exceeding customers quality expectations strongly motivate repurchase behavior and inhibit switching behavior
(Deng et al. 2010). This should also apply in the case for PL products, although likely skepticism about store brands
quality may discourage a greater number of consumers to turn to them, too (Gonzalez et al. 2006). Hence:
H2: Perceived quality is positively related to consumers intention to purchase PL products.
2.4. Perceived risk
Perceived risk relates to the likely negative outcome resulting from a purchase, in case the products or services
actual performance does not meet expectations (Lin, 2008). To reduce risk perceptions, customers prefer brands of
enhanced image (Wu et al. 2011) yet, when undesirable outcomes are expected, customers tend to turn to national
brands that still bear a smaller risk in comparison (Liljander et al. 2009). In this context, customers doubts about a
products quality may trigger risk perceptions linked to a situation which most people by definition, would try to
avoid (Erdem et al., 2004).Given the fact that consumers may still view store brands as inferior in terms of quality,
may well explain why such brands are still viewed as bearing higher risk in comparison. Risk perceptions are
considered a key driver of PL product proneness (Liljander et al. 2009); moreover, higher perceived risk makes
customers reluctant to buy PL brands (Wu et al.2011). Therefore:
H3: Lower perceived risk associated with PL products is positively related to consumers intention to purchase
such products.
2.5. Perceived Value in terms of Money, Benefits and Social value.
Perceived value for money refers to how consumers evaluate a product relative to its price (Wu et al. 2011). For
instance, between two similar products in terms of price level, the greatest value for money is thought to be offered
by that with the most advantageous features compared to the product that has inferior cues. Perceived value for
money influences consumers intentions to purchase products (Dodds et al. 1991) and services (Cronin et al. 2000).
The value for money concept also applies to a PL context, where it has been considered the most significant factor
for customers loyalty (Anselmsson & Johansson, 2009).Regarding PL brands in particular, consumers seem more
prone to purchase them when the relationship between price and quality is getting weaker (Ailawadi et al. 2008);
hence, perceptions on value for money get stronger. In line with the above:
H4: Higher perceived value for money is positively related with intentions to purchase PL brands.
2.6. Perceived value in terms of benefits received.
Perceived value from the benefits perspective reflects the overall sacrifices made besides money (e.g. purchase
time, transaction costs, and search costs) to receive product benefits (McDougall and Levesque, 2000). In other
words, product evaluations take into account the difference between all benefits obtained by product attributes,
relative to total costs (Caruana & Ewing, 2010). Perceived value has a key role in consumers decisions and
consumers willingness to obtain possession of a product (Grewal et al., 1998). The link between perceived value
and purchase intention has been supported in the service sector, too (Cronin et al. 1997).For example, convenience
is important for consumers in terms of allowing them to save time and effort when buying or using products (Berry
et al., 2002). If one considers convenience costs (e.g. time, money and energy expenditure) as minimal, then he/she
may decide to purchase a PL brand. In line with the above:
H5: Perceived value benefits are positively related with consumers intention to purchase PL brands
2.7. Perceived social value
DelVechhio (2001) claims that branded products are often seen as products whose strong brand name serves as
social value (or status)indicator that is injectedto the products owner. Social value indicates the perceived
enhanced self-concept on strictly social grounds that a consumer receivesfrom the utility of a
product(SweeneyandSoutar,2001). Likewise, Moliner et al. (2007, p. 1399), argue that the social dimension reflects
the value generated from the social image transmitted by the use of the product or service. Given that national
brands are considered in general as socially acceptable goods, DelVechhio, (2001) argued that consumers

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occasionally exhibit an attitude characterized by hesitation towards PL brands, out of fear for likely negative social
consequences that their product choices may bring. Although the notion of social value is recognized as an
influential driver of purchase intention (Chi & Kilduff, 2011), it is uncommon among studies in a grocery (PL)
product context. By implication:
H6: Perceived social value is positively related with consumers intention to purchase PLbrands.
2.8. Demographic characteristics
Regarding consumer demographics link to behavior, views are conflicting. ACNielsen (2005) point out there is
no difference between age groups in terms of preference for PL brands. In contrast, Richardson et al. (1996), argue
that older people are more likely to buy PLs due to their experienced use of the correct criteria to assess products,
while younger ones purchase decisions are based mainly on extrinsic cues (e.g. brand name, price). Also, high
income customers seem less prone to get store brands (ACNielsen, 2005) while Baltas and Argouslidis (2006) claim
that even higher income (and better educated) consumers prefer PLs, due to these brands improved image. In light
of the above, demographics such as Age and Household Income are used as control variables, here.
3. Research Methodology
A structured questionnaire was developed by adopting reliable, multi-dimensional scales from the literature (see
Table 1), reflecting the solid academic foundation of the constructs operationalized.
Table 1: Basic References and Reliability Assessment scores for Multi-item measures used
Measures

Items

Basic References

Cronbachs alpha

Customers Purchase Intention

3 items from Baoet al. (2011),


2 items from Chen (2007)

0.767

Independent Variables
Brand Awareness

0.818

Perceived Quality
Perceived Risk
Perceived Value for Money
Perceived Value Benefits

4
7
4
3

Perceived Social Value

2 items from Del Vecchio (2001),


2 items from Nguyen et al. (2011).
Baoet al. (2011)
Tuu et al. (2007)
Sweeney and Soutar (2001)
Chen (2007)
2 items from Oliver and Lee (2010)
1 item from Sweeney &Soutar (2001)

Dependent Variables

0.884
0.891
0.864
0.410
0.660

The instruments cognitive relevance to the respondents was evaluated prior to data collection. Also, inter-item
analysis was performed for all multi-item scales used to ensure that the reliability criteria are met prior to using them
in the regression analyses performed. Table 1 shows the respective Cronbachs a statistics, most of which are close,
or well-over the minimum acceptable level of 0.70.Regarding sampling, a non-probabilistic sample was drawn
conveniently among customers of three of the largest super markets based on a densely populated Greek city. All
three super market chains offer almost a balanced product variety of PL and national/global brands (which was the
main criterion for their selection). Two of these are of foreign ownership while the third is Greek owned, one of the
largest in the country. Data were collected at different times of the day, different days of the week in three different
locations by using an intercept survey to boost response (Hickson et al. 2007). Out of 703 consumers intercepted to
elicit participation, 179 agreed to participate, resulting into171 valid responses and a response rate of about 25%.
The sample consists of male (37%) and female (63%) consumers, of which 74% are less than 45 years old, married
(55%), leaving in a household of 1-2 (49%) or 3-5 people (49%) and whose monthly household income does not
exceed 3000 (92%).
4. Statistical Analysis Results
First, descriptive analysis was conducted to statistically describe the variables involved (see Table 2). It is
evident the relatively high mean scores of the perceived value and purchase intention variables studied. Second,

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multivariate analysis has been employed to test the hypotheses set and assess the strength of the cause and effect
relationships among the variables. The multivariate regression performed, uses purchase intention of PL brands as a
dependent variable (see Table 3).
Table 2: Descriptive Statistics for all Multi-item measures used.
Measures
Dependent Variables
Customers purchase intention
Independent Variables
Brand awareness
Perceived quality
Perceived risk
Perceived value for money
Perceived value in terms of benefits
Perceived social value

Items

Min

Max

Mean

S.D

1
1
1
1
1
1
1
1

7
7
7
7
7
7
7
7

5,2

1,25

4,8
4,9
4,4
5,2
5,4
4,5

1,37
1,37
1,27
1,19
1,39
1,18

4
4
7
4
3
3

The model includes six factors (independent variables) and explains about 52% of the variance (see Table 3).
Unlike the perceived value in terms of benefits received, the rest of the factors are found to have an impact on
customers intentions to purchase PL goods.
Table 3: Regression results on the Determinants of consumers Intention to Purchase PL brands.
Results for 1st Regression model
Independent
variables

Dependent variable
Intention to Purchase PL Brands
Stand. betas
.161**
-.023
.364***
.154**
-.056
.358***

Brand awareness
Perceived quality
Perceived risk
Perceived value for money
Perceived value in terms of benefits
Perceived social value
Control variables
Age
-.131**
Household Income
.052
Adjusted R2
0.532***
** Significant at the 0.05, *** Significant at the 0.01, (Valid N=171)

The (lower) perceived risk exhibits a significant, positive relationship with intentions to purchase PL brands
(b=0.364, p<0.01), followed by the social value associated with such brands (b=0.358, p<0.01).Also, brand
awareness (b=0.161, p<0.05) and the value for money obtained from buying store brands (b=0.154, p<0.05) exhibit
significant positive relationships with purchase intentions. Last, the variable Age, rather than Income, seems to
influence the relationship between purchase intention and its drivers, reflecting younger aged consumers likely
impact on the links tested.
5. Discussion and Conclusion
Against the above findings, four (out of six) hypotheses involving intentions to purchase store brands (i.e. H1,
H3, H4, H6) have been supported. The findings regarding the notions of Risk (H3), perceived Value for money (H4)
and social value (H6), highlight the fact that customers intention to purchase PLs is primarily driven by perceptions
of risk, social value and value for money. This is not found to be also the case for the value in terms of the benefits
received from using PLs (H5),although the average mean score(see Table 2) for such benefits is quite high (see also
limitations). Perceived quality of PLs is not identified as a driver of purchase intentions; hence, (H2) has been
rejected. Indeed consumers decisions may also place emphasis on other factors than quality per se, such as for
example, the brand (see H1).The higher the brand awareness, meaning the more familiar one is with store brands,
the greater the intention to buy such brands; in line with the literature, (H1) is supported. Last, unlike Age, income is
not found to affect the relationships tested. These findings have obvious implications for the marketing of PL
brands. First, retailers wishing to boost sales should consider ways to reduce customers risk perceptions while

N. Kakkos et al. / Procedia - Social and Behavioral Sciences 175 (2015) 522 528

improving value for money and social value perceptions for PLs. Second, store brand management should
emphasise on enhancing PL brand awareness. Bear in mind however, that the above are preliminary findings only
and should be treated with caution, particularly in this currently, uncertain business context.
6. Contribution, Limitations and Directions for Further Research
In addition to the foregoing suggestions, note that this study has also determined empirically, a link between
perceived social value and intention to purchase store brands, a relationship that to the best of the authors
knowledge has not been studied before in a grocery product context. Future research should further investigate the
former relationship as well as study a greater number of factors (and interrelationships among them) to understand
the drivers of customers intentions to purchase PL brands. Such interrelationships have not been studied in this
study. The latter is limited in terms of not investigating different product categories, too. Products differ in terms of
various characteristics (e.g. quality, design, price) and consumers attitudes towards different PL product categories
may well differ, too. The fact that (H5) relating to value benefits for example, has not found support, might be due
to such benefits (e.g. say, convenience, saving time/effort, losing weight and/or controlling calories intake) not being
clearly stated and explained for each product category, separately. Thus, future research should also look into the
drivers of store brand buying behaviour per product category. Furthermore, it would be interesting to undertake
studies looking for changes in the purchase intention and the consumption of PL goods before and after recession.
Last, due to the conveniently collected sample drawn, generalisations of these (preliminary) findings cannot be
made. Future studies should employ larger scale surveys by developing a probabilistic research design and
increasing the sample size to enhance the external validity of the findings.
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