How do consumers respond to price gaps in private brand agrifood products?

PurposeThere is a range around reference prices, the so-called latitude of price acceptance, where consumers seem insensitive to changes into prices, with these ranges being wider for buyers of private brands. This paper analyses objective price gap between two product alternatives as a main driver of consumer behaviour. Therefore, the authors shed light on whether the price gap conditions consumer-switching behaviour and at what point the price gap triggers a switching pattern.Design/methodology/approachShopping data on two product alternatives of olive oil were obtained from a household scanner panel of Spanish consumers (607 households) with weekly price tracking, and multilevel regression models were performed.FindingsThe results suggest that the price gap has a fundamental effect on the consumers' choice. In this case, up to 1 euro/litre the demand seems almost inelastic; beyond that price gap, the demand for the finer product plummets.Research limitations/implicationsThis study focussed on olive oil products. The research needs to be extended other food products.Originality/valueThe authors contribute to the literature by documenting how the price context measured in terms of a price gap is a relevant stimulus in consumer choices, with a focus on the change in price sensitivity between product alternatives when competing brands are not involved but private brands are.

A Study of Psychological and Behavioral Correlates of Brand Loyalty

The study aimed at understanding psychological variables and behavioral variables having their effect on brand loyalty particularly in terms of food & grocery private label brand in Indian market. A number of psychological variables and behavioral variables were taken up from an established scale developed by Prof Scot Burton, University of Arkansas, available in public domain for the study. It was found that the psychological variables and behavioral variables both have impact on loyalty towards private label brands. It shows consumer thought process maturing towards private brands

The Influence of Private Label on Customer Loyalty, the Mediating Role of Customer Satisfaction

Current study aimed at examining the influence of PL on customer loyalty through the mediating factor of customer satisfaction. Depending on quantitative approach; and distributing (197) questionnaires on individuals; results of study indicated that private label has the ability to increase loyalty if it was accompanied by high customer satisfaction. Among variables chosen, it appeared that product quality and store followed by price are influential in increasing satisfaction and leading to better loyalty. Study recommended taking extra attention in managing and manufacturing private brands in order to increase loyalty through satisfying customers.