European Journal of Marketing

Measuring private labels brand equity: a consumer perspective

Andres Cuneo, Pilar Lopez, Maria Jesus Yagüe,
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Andres Cuneo, Pilar Lopez, Maria Jesus Yagüe, (2012) "Measuring private labels brand equity:
a consumer perspective", European Journal of Marketing, Vol. 46 Issue: 7/8, pp.952-964, https://
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EJM
46,7/8
952
Received 29 July 2010
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European Journal of Marketing
Vol. 46 No. 7/8, 2012
pp. 952-964
q Emerald Group Publishing Limited
0309-0566
DOI 10.1108/03090561211230124
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0309-0566.htm
Measuring private labels brand
equity: a consumer perspective
Andres Cuneo
Escuela de Negocios, Universidad Adolfo Ibañez, Santiago, Chile
Pilar Lopez
Universitat Autonoma de Barcelona, Barcelona, Spain, and
Maria Jesus Yagüe
Universidad Autonoma de Madrid, Madrid, Spain
Abstract
Purpose – The purpose of this paper is to analyse whether private label brands (PLB) have been able
to build brand equity throughout their development. Specifically, it aims to develop and test a
measurement model that measures PLB brand equity across product lines.
Design/methodology/approach – A brand choice model is developed using a multinomial logit
model and it is calibrated using a consumer panel database of two product lines of yoghurt from 8,000
Spanish households for a three-year period.
Findings – Prior research has considered PLB as the unbranded alternative to manufacturer brands.
In this research empirical evidence is provided that PLB have built brand equity throughout their
development and that this equity varies across the different PLB offered in the market, and across
product lines.
Practical implications – These findings offer valuable insights to retailers on how to manage PLB
and to manufacturers on how to approach and compete against them.
Originality/value – The vast majority of academic research has not approached the PLB
phenomenon from a branding perspective. This research constitutes a first attempt to measure brand
equity on PLB. It measures PLB brand equity for each typology of PLB in the market.
Keywords Brand equity, Brand value, Private labels, Store brands, Generics, Choice models,
Multinomial logit
Paper type Research paper
Introduction
The growth of private label brands (PLB) in Europe over the last decade has been
impressive. The numbers speak for themselves; they are present in more than 90 percent
of the categories of consumer-packaged goods. Market shares across Europe have reached
on average 23 percent (TNS, 2009), but shares are higher in countries such as the UK (46
percent), Switzerland (45 percent), Germany (37 percent) and Spain (33 percent)
(Europanel, 2009). More interestingly, their growth is significantly higher than that
experienced by manufacturer brands (18 percent vs 4.5 percent). Moreover, a second
important trend in the market is the transformation of PLB, evolving from a
low-price/low-quality image to competing vis-à-vis the strongest brands in the market
The authors gratefully acknowledge the support of Kantar Worldpanel (Spain) and especially
Raquel Arribas for the data provided for the analysis. The authors also appreciate the valuable
comments and advice from Professor Sandra Milberg. This research has counted with the
financial support of project ECO2008-00488.
 (Kumar and Steenkamp, 2007). In some cases, they have left behind their value Measuring
propositions based on value-for-money and moved into less functional territories, private labels
traditionally owned by brand manufacturers. This is the case of some European retailers
such as Tesco, Sainsbury, Ahold or Carrefour, which have developed complex brand brand equity
architectures and portfolios of PLB, offering basic, premium and even symbolic products
to the market (Burt, 2000).
Surprisingly, even though the development of PLB is a hot topic in Europe, the 953
attention that it has received from brand researchers is still scarce. The vast majority
of academic research has not approached the PLB phenomenon from a branding
perspective but, mainly, from the perspective of retailers (Raju et al., 1995; Dhar and
Hoch, 1997; Gedenk and Neslin, 1999; Ailawadi and Harlam, 2002, 2004),
manufacturers (Hoch and Banerji, 1993; Hoch, 1996; Quelch and Harding, 1996;
Rajiv et al., 2002), consumers (Baltas, 1997; Baltas and Argouslidis, 2007; Ailawadi
et al., 2008), or from the competitive interactions amongst them (Sethuraman, 1996;
Cotterill et al., 2000; Ailawadi, Gedenk and Neslin, 2003; Bonfer and Chintagunta, 2004).
Moreover, the majority of research papers have considered manufacturer brands as
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“the real thing” whilst PLB have been associated with the unbranded alternatives to
penetrate price sensitive segments. This bias in the research literature may, in part, be
explained by the fact that the majority of PLB research has been conducted in the
United States. The US market for PLB has significant differences in terms of scale and
market structure when compared to Europe (Kapferer, 2005). The situation in Europe
shows higher levels of retail concentration, limited number of brands on the shelves,
and shorter assortments offered by retailers. These factors have strengthened the
power of PLB in Europe and have established a platform over which to acquire brand
legitimacy, differentiate from manufacturer brands and deliver value to consumers.
However, whether these brands have been able to build brand equity throughout
their development is still an open question. In the past, PLB price-points were the main
drivers for their growth. After their transformation, there is an open debate among
academics and practitioners about whether PLB have been able to build brand equity
in the different tiers where they compete. Therefore, the objective of this research is to
investigate whether PLB have developed brand equity throughout their evolution.
Specifically we develop and test a measurement model that measures PLB brand
equity. This is a first step to answer fundamental questions regarding PLB that have,
to date, not been thoroughly addressed by brand researchers.
We believe that this research will contribute to both academics and practitioners.
For academics, it fills a research gap by developing and testing a model that measures
PLB brand equity. This is a fundamental and important issue we address to advance
the research agenda on PLB. For practitioners, this study provides a better
understanding of the ability of PLB to create brand equity. It offers valuable insights to
retailers on how to manage PLB and, to manufacturers, on how to compete against
them. Further, a brand equity measure for PLB represents a valuable instrument to
track PLB performance, either for retailers or manufacturers.

Conceptual background and research propositions

Evolution of PLB
PLB have a long history with origins dating back to the 1970s. However, their speed of
growth and their transformation are quite a recent phenomenon. Their entry has
 EJM modified dramatically the competitive dynamics in the marketplace. For many years,
46,7/8 retailers were spectators in a market dominated by strong manufacturer brands. Retail
fragmentation and media concentration were key factors to foster manufacturer
brands growth (Kumar and Steenkamp, 2007). Manufacturer companies took
advantage of the market structure and built their brands through aggressive
advertising and intensive commercialization strategies (Corstjens and Corstjens, 1995).
954 Nowadays, the situation has changed considerably. Retailers have achieved a
dominant position over manufacturers all-around Europe. The process of consolidation
of the European retail system has reinforced their competitive position (TNS, 2009).
What accounts for PLB evolution? This evolution has been driven by a number of
benefits for retailers:
.
increases bargaining power over manufacturers (Farris and Ailawadi, 1992;
Pauwels and Srinivasan, 2002);
.
reactivates and expands stagnant categories (Hausser and Shugan, 1983; Scott
and Zettelmeyer, 2004);
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.
increases revenues, as PLB delivers superior margins to those delivered by
manufacturer brands (Hoch and Banerji, 1993; Ailawadi and Harlam, 2002, 2004);
and
.
delivers strategic benefits, such as improvement of store image, loyalty and
differentiation (Corstjens and Lal, 2000; Ailawadi et al., 2008).

The introduction of PLB has led to a shift in manufacturers strategies and in the
relationship between manufacturers and retailers. More specifically, it has intensified
competition and has led to the need for manufacturers to develop more defensive
strategies. More importantly, the entry of PLB represents a shift in the relationship
between manufacturers and retailers. The retailer abandons its status of client to
become a direct competitor with whom to fight for consumer preference and market
share (Pauwels and Srinivasan, 2002).
The question that arises for manufacturers is whether PLB are a competitive threat.
Findings from several studies suggest that this may not be a concern for manufacturer
brands. For example, prior research indicates that consumers are willing to pay
premium prices for manufacturer brands because of superior quality cues relative to
PLB (Mills, 1995; Narasimhan and Wilcox, 1998). Moreover, when quality cues between
PLB and manufacturer brands are considered equal, consumers prefer manufacturer
brands because of the utilities derived from the intangible value delivered by them
(Sethuraman and Cole, 1997). However, these conclusions are true when referring to
predominantly premium manufacturer brands.
To the contrary, there is evidence that PLB should be a great concern to
manufacturer brands as they do pose a competitive threat at every level of the market.
For instance, when compared to second tier brands, consumers show proneness to
switch to PLB (Hoch and Lodish, 1998). Hence, second-tier territories represent a fertile
ground for PLB development (Sayman et al., 2002). Moreover, most international
retailers have started to develop portfolios of PLB using multi-tier strategies to access
either new segments of consumers or new territories of legitimacy, such as premium or
specialist (Planet Retail, 2007).
 Interestingly, this development challenges a wide range of manufacturer brands, Measuring
not only those selling mainstream products but also those targeting specific segments. private labels
PLB development represents an important threat for manufacturers, especially if PLB
are capable of building brand equity at different tiers. If this is the case, retailers have brand equity
to embrace a brand management approach. A discipline where retailers become
responsible for the procurement, production, commercialisation and promotion of their
brands, hence for brand success or brand failure (Dhar and Hoch, 1997). 955
Surprisingly, even though academic research has been investigating PLB from
different perspectives, not much attention has been given to PLB from a branding
perspective. Considering the evolution and transformation that PLB have gone
through, understanding PLB from the perspective of branding theories is something
that deserves far more attention (Ailawadi and Keller, 2004). For years companies have
been thinking of their brands as intangible assets and the concept of brand equity has
been an obsession for marketers and a top research priority for academics. Extensive
research has been done around its conceptualisation, management and measurement
(Aaker, 1991; Srivastava and Shocker, 1991; Keller, 1993, 2002; Keller and Lehmann,
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2003; Kapferer, 2005). However, the focus of this research has been on manufacturer
brands, leaving PLB aside. This fact constitutes a clear gap in the research literature.
As we point out in this literature review, retailers have started to develop their brands
in similar ways as manufacturer brands. Hence, several questions have to be answered
with respect to PLB. The measurement model of PLB brand equity that we develop and
test will help to answer important strategic questions such as the following.
Have PLB been able to build brand equity throughout their development? Or they
should still be considered the “unbranded alternative” as prior research has? Is it
appropriate to consider PLB as one single group of brands? Or alternatively, consider
each PLB as an individual brand that builds its own equity? Does the ability of PLB to
build equity vary across product lines or is PLB brand equity stable across product
lines? We derive the following research propositions from our literature review and the
market data that we have been able to analyse:
P1. PLB have built brand equity throughout their development.
P2. PLB brand equity varies among the different PLB of the market.
P3. PLB brand equity varies across product lines.

Methodology
Brand equity, is ultimately determined by the consumer. Value is not an objective
concept; hence there are many ways of measuring brand value from the consumer’s
perspective. The academic literature on brand equity measurements is extensive.
Marketing academics have approached brand equity measurements from two
perspectives:
(1) indirect measurements, focusing on the measurement of brand equity
components (Lassar et al., 1995; Yoo and Donthu, 2001; Netemeyer et al.,
2004); and
(2) direct measurements, focusing on brand equity outcomes (Kamakura and
Russell, 1993; Cobb-Walgren et al., 1995; Ailawadi, Lehmann and Neslin, 2003).
 EJM As a first attempt at measuring PLB brand equity, we consider Kamakura and
46,7/8 Russell’s (1993) utility method for measuring brand equity the most appropriate since
we are interested in measuring PLB equity from the consumer perspective, based on
purchase behaviour. This direct measurement of brand equity, estimates brand equity
as a component of the global utility delivered by the brand to the consumer, through a
brand choice model. The model is based on consumer behaviour and calculates the
956 implicit utility that each brand delivers to the consumer. The data we use comes from a
consumer panel, which gathers purchases of a set of 8,000 households in Spain.

Discrete choice models

Consumers would choose those brands that offer value to them. Therefore, out of a set
of alternatives, they would choose the one that delivers the highest utility. Discrete
choice models allow the estimation of brand utilities for consumers. Therefore, these
models have been widely used to analyse brand value (Guadagni and Little, 1983, 2008;
Kamakura and Russell, 1993). Brand utilities are built based on random utility
functions formed by a deterministic part of the utility, defined as a function of the
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brand or the alternative brand’s attributes (price, promotional activities, advertising

expenditures, among others) and a random part that gathers elements of the
consumer’s decision, which are not explained by brand attributes.
Consumers assign utility functions to brand alternatives when confronted by a
choice. A brand is chosen when the consumer obtains a surplus. This is, when the
difference between the value assigned to the brand and the price paid for it is positive.
This positive difference is defined as the consumer’s surplus E hjt as it is stated in the
expression (1):

E hjt ¼ vhjt 2 phjt ð1Þ

where, vhjt represents the value given by a consumer/household, h, to a brand, j, in the

moment, t, and phjt is the price paid for it.
If there are J brands (j ¼ 1, 2, . . . J) and they are perfectly substitutable in the
occasion, t, consumers will choose the brand, j, that maximizes their utility. Then, the
positive difference for the consumer or consumer surplus represents the equity of the
brand in the market. Therefore, brand equity measurement is based on the utilities
delivered by the brands. Following this approach, we assume that the brand value is
compounded of two parts: one that is the average value of brand j in the market, and
the other that is a random variable that takes the value that each consumer/household
assigns to that brand in that particular moment (see expression (2)).

vhjt ¼ vj þ phjt ð2Þ

where, vj represents the average value given to the brand by the market, and phjt is a
random variable.
We represent the random variable with the form: phjt ¼ b1 1hjt where, b is a
parameter, and is an independent random term equally distributed among the brands.
Based on equations (1) and (2), we define a random utility function that is estimated by
the following Multinomial Logit Model (MNL) (Guadagni and Little, 1983, 2008):

bE hjt ¼ bvj 2 bphjt þ 1hjt

 where U hjt ¼ bE hjt and aj ¼ bvj , that is to say: Measuring
U hjt ¼ aj 2 bphjt þ 1hjt ð3Þ private labels
brand equity
MNL models have been widely used in marketing literature to explain brand choice
either from households or individuals (Russell and Kamakura, 1994; Gupta et al., 1996;
Song and Chintagunta, 2006; Song and Chintagunta, 2007).
In this case, b represents the sensitivity to the price of the utility, and aj the intrinsic 957
utility of the brand. This utility or intrinsic preference, when divided by the b
coefficient, indicates the relation

between the utility and the price that reflects the
average value of the brand, j, vj ¼ aj =b , accordingly to what was set out previously.
From the brand utility function (equation (3)), the probability of choosing a brand
can be set out through the following equation (McFadden, 1984):
exp U hjt
Probhjt ¼ ð4Þ
X
J
exp U hjt
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j¼1

Where is the determinist component of the utility of the brand j on the purchase
occasion t for household h according to the expression (3).

Description of the data

The data analysed consists of 150 weeks of consumer panel purchases of yoghurts in
Spain, collected by Kantar Worldpanel (former TNS), spanning from January 2005 to
November 2008. This panel covers purchases made by a panel of 8,000 Spanish
households all-around Spain selected through a stratified random sampling.
Out of the data obtained for each purchase, the following information was
considered:
.
brand chosen;
.
product type chosen;
.
unit price paid at the time of the purchase (converted to the standard unit of
125grs.); and
.
advertising pressure (measured as the number of GRP’s invested by each brand
monthly).
To test our model we chose the yoghurt market in Spain. This choice was made for
several reasons. On the one hand, it is a mature market. It is one of the categories in
which PLB have grown the most in the last few years, reaching a market share in 2008
of 45.5 per cent (Alimarket, 2008). There exists a widely developed offer in terms of
brands and breath of product lines, spanning from functional to symbolic benefits for
the consumer. However, two main product lines account for the largest part of the
volume; “regular” (72.4 per cent), which stand for basic product ranges, and
“functional” products (27.3 per cent) which correspond to products that deliver
“high-end healthy” benefits for the consumer. On the other hand, the yoghurt market
has gone through a strong process of concentration in terms of brands and distribution
systems. The brand offer is strongly polarised between the leading manufacturer
brand (SOM: 47 per cent) and PLB (SOM: 46 per cent). The remainder of the market is
 EJM controlled by a set of regional manufacturers and niche players. Interestingly, the
46,7/8 range of PLB is wide and the performance of two of them is remarkable, reaching a
jointly 30 percent of the market. Distribution systems are also concentrated, with three
channels accounting for close to 100 percent of the sales volume; supermarkets (57.1
percent), hypermarkets (17.8 percent) and discount stores (23.2 percent). Three retail
chains account for almost 50 percent of the purchases of yoghurt. Thus, there is fierce
958 competition between manufacturer brands and PLB.
For the purposes of this research and the propositions to be investigated we split the
database in two groups: “regular” yoghurts and “functional” yoghurts. We do this to
measure equity across product categories with different levels of involvement, assuming
“basic” yoghurts as low involvement products and “functional” yoghurts as high
involvement products. The first one consists of 122,258 purchases made by 1,636
households throughout the period of analysis; the second one consists of 66,861 purchases
made by 933 households throughout the same time period. A household was selected if it
made more than 20 purchases during the period of analysis in each product line.
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Analysis
The analysis focuses on eight alternatives. We individualise the leading manufacturer
brand (LMB), five PLB (PLB1 . . . PLB5) and create two additional categories, a
composite “other manufacturer brands (OMB)” for manufacturer brands with less than
1.5 per cent and a composite “other PLB (OPL)” for PLB with less than 1.0 per cent (see
Table I). This last group of brands is assimilated to the generic product type (utility-0).
The leading manufacturer brand (LMB) has a strong market leadership in both
product lines: “regular” and “functional”, but considerably higher in the “functional”
product line. On PLB, two brands get together the largest part of PLB share. In
“regular”, PLB2 has a share of 17.8 per cent, but in “functional” it drops to 10.7 per cent.
On the other side PLB3, has a share of 12.6 per cent in “regular” but its position in the
“functional” is slightly higher (13.7 per cent). The rest of the brands vary between 6.7
per cent and 1.0 per cent.
Table II shows, shows market shares and average prices. As it is expected, price
levels for “regular” yoghurts are lower than for “functional”, because of the
differentiation between both product lines. Regarding brands, PLB price-points are
also lower than manufacturer brands.

Alternatives
Brand Store type Brand strategy

LMB – Sub-branding
PLB1 Supermarket Different from store brand
PLB2 Discount Same from store brand
PLB3 Hypermarket Same from store brand
PLB4 Supermarket Same from store brand
PLB5 Hypermarket Different from store brand
OMB – –
OPL Various Various
Table I.
Description of the Notes: Product type – Regular: Observations ¼ 122,258 Panelists ¼ 1,636; Product type –
databases Functional: Observations ¼ 66,861 Panelists ¼ 933
 Measuring
Regular Functional
SOM (%) Unit price S.D. SOM (%) Unit price S.D. private labels
LMF 39.4 0.300 0.07 60.8 0.442 0.05
brand equity
PLB1 1.6 0.138 0.01 13.7 0.235 0.02
PLB2 17.8 0.173 0.04 10.7 0.198 0.02
PLB3 3.7 0.133 0.01 2.2 2.17 0.02 959
PLB4 3.5 0.133 0.01 6.7 0.213 0.01
PLB5 2.0 0.130 0.01 1.0 0.206 0.01
OMB 10.0 0.324 0.05 2.7 0.388 0.03 Table II.
OPL 10.5 0.142 0.01 2.2 0.208 0.02 Database descriptives

Model specification and results

We define the following model specification to illustrate the utility given by a
consumer, h, to a brand, j, in a moment, t, as:
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U hjt ¼ aj þ bp P hjt þ bBL BLhjt þ bGRP GRP jt þ 1hjt

where:
aj component of brand equity for brand j.
phjt unit price paid for the brand j by the consumer h at the time t.
BLhjt represents brand loyalty of the consumer h towards brand j.
GRP jt Gross rating points invested by brand j in moment t.
1hjt random part of the utility delivered by brand j to the consumer h in moment
t, which is not explained by any of the variables used by the model.
To study the contribution of each variable to the probability of choice we estimate the
model in a progressive way until reaching the final model that has been defined above.
Table III shows the results only of the final model, out of the five different specifications
that were run for both databases. The interpretation of the coefficients is not a direct one.
Coefficients do not indicate probabilities of choice. However, the signs of the coefficients
do indicate magnitudes and the direction of the change. Whether the sign is positive or
negative depends on whether the brand delivers more or less utility compared to the
brand that is considered utility-0 or generic (OPL). Hence, a positive coefficient signals
brand equity creation. To the contrary, a negative coefficient represent that the brand
has not been able to build equity over the generic brand alternative.
Results from the “functional” product line show that four brands have been able to
build equity; the LBM, the composite OBM and two PLB. The LMB, drives preference
in this market representing the highest utility for consumers (0.902), far from the 0.297
showed by OMB. Interestingly, the second brand with most value in this market is a
PLB. PLB1 (0.311) has even higher value than other manufacturer brands, which are
followed by PLB2 (0.037). The rest of PLB are not able to build brand equity in this
product line and remain in an uncertain position regarding the role they want to
perform in the marketplace. These results lend support to propositions 1 and 2,
showing that some PLB have been able to build brand equity and that brand equity
varies (increase/decrease) across product lines.
 EJM
Variable “regular” “functional”
46,7/8
a_LMB 20.241 * 0.902 *
(0.021) (0.068)
a_PLB1 20.721 * 0.311 *
(0.026) (0.052)
960 a_PLB2 20.657 * 0.037
(0.026) (0.052)
a_PLB3 21.119 * 2 0.405 *
(0.023) (0.048)
a_PLB4 21.676 * 2 1.123 *
(0.032) (0.065)
a_PLB5 21.278 * 2 0.104 *
(0.024) (0.045)
a_OBM 20.335 * 0.297 *
(0.030) (0.071)
b_Price 21.667 * 2 2.341 *
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(0.091) (0.251)
b _Loyalty 4.993 * 4.824 *
(0.015) (0.022)
b _GRP’s 0.906 0.137
(0.662) (0.113)
Log-likelihood 2100,384.1 2 32,496.9
R-squared adjusted 0.524 0.628
Observations 122,258 66,861
Table III.
Results of the MNL Note: * . 0.001

However, when we analyse results from the “regular” product line the picture is
considerably different. In this product line, none of the brands in the market have been
able to create superior utilities for consumers (brand equity) to those delivered by generic
brands (OPL). Nevertheless, the results indicate that the negative effects for the equity of
all brands is not equal. Specifically, the negative effects on manufacturer brand equities
are less than those of PLB (LMB: 20.241 and OBM: 20.335). Interestingly, when
analysing PLB competition, results presents high variability within PLB. Two PLB are
considerably detached from the rest PLB1 (20.721) and PLB2 (20.657) have much
higher values than other PLB. These results support proposition 3, showing that PLB
brand equity varies across product lines. Moreover, comparing results from “functional”
and “regular” we can further support proposition 2 as brand equity varies.
In addition, several other interesting results emerged from the analyses. In relation
with the values obtained from the parameters of the explanatory variables, the effect of
brand loyalty is remarkable. This coefficient provides evidence that loyalty has a large
effect on brand choice, affecting brand choice positively for both product lines; “regular”
(4.993) and “functional” (4.824). Price is also a relevant variable that affects brand choice,
however, negatively. Interestingly, the effect is higher on “functional” yoghurts (22.341)
than on “regular” (21.667). Advertising pressure, measured in terms of the GRP’s
invested by the brands, has a positive effect on brand choice, both for “regular” and
“functional”, as might be expected, however, is not statistically significant.
In order to measure the goodness of fit of the models and to identify significant
differences between them, we used the Log-Likelihood and R 2 adjusted, as well as the
 log- likelihood statistic tests to compare the models. For “regular” yoghurts the value Measuring
for the statistic R 2 adjusted is 0.529 but it improves considerably in the case of private labels
“functional” yoghurts. Therefore, both models could be considered to have an
acceptable goodness of fit. brand equity

Discussion
PLB are a major issue throughout Europe. Understanding PLB from the perspective of 961
branding theories contributes to both academics and practitioners. For academics it
fills a critical research gap. To our knowledge, no brand equity measure of PLB has
been developed to date. This is a fundamental and important issue to address, prior to
conducting further research on PLB from a branding perspective. The results that we
provide from the different models analysed in this study, confirm that PLB have built
brand equity throughout their development. However, there are considerable
differences across different product lines.
Those product lines with high levels of differentiation represent an opportunity for
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PLB to build brand equity. To the contrary, in less differentiated product lines building
brand equity represent a challenge for PLB as well as for manufacturer brands. In
those product lines where either perceived risk exist or where brand confidence is
relevant for consumers to believe the benefits of the products (“functional”), the
capitalisation of brand value is evident. However, in product categories where
shopping is done routinely (“regular”), consumer preferences and loyal behaviours
seem to be a direct consequence of past experiences with the brand or the reactions to
marketing actions, such as pricing or communication.
Our results also show high variability on brand equities. Not only across product
lines but also within the different PLB competing in the market. Interesting
conclusions can be drawn from this fact. On the one hand, from the consumer
perspective there are no differences between PLB and manufacturer brands.
Differences are made only when evaluating brand utilities. For the consumer, all
brands are alternatives to be evaluated when confronted to a brand choice. Whether the
brand is owned by a retailer or a manufacturer seems to be irrelevant for the consumer.
On the other hand, this finding has clear implications for researchers. Prior research on
PLB have considered PLB as one single category. Our research indicates that PLB
brand equity is built individually, therefore treating PLB as one single composite of
brands should be avoided in future studies.
These findings make evident that theories of PLB should be revisited, incorporating
the fact that PLB have brand equity. They no longer represent just the price alternative
to consumers. It is imperative that retailers and manufacturers are conscious of this
shift. Retailers should also be aware that developing portfolios of PLB and complex
brand architectures require that they enter the domain of brand management. This
new approach represents a challenge in their approach to managing the business.
Brand management requires not only additional skills but also a new management
vision. The measure of brand equity that we have developed represents a valuable tool
for them to measure whether their PLB have created brand equity across product lines.
For retailers, it would, no doubt become a must to track PLB performance over time.
On the other side, manufacturers have wondered whether PLB represent a competitive
threat to their brands. This is a reality. They must become aware that they are
competing against “real brands” (with equity), in fact, PLB are able to compete in the
 EJM same territories where manufacturer brands have been historically dominant. Hence,
46,7/8 brand managers should change their vision on PLB and revisit their branding
strategies to compete successfully against them.
Even though this study reveals that PLB have built brand equity, we should point out
some limitations that could drive future research directions. We test the research
propositions on the yoghurt market in Spain. However, to generalise our results further
962 research should consider other product categories and other countries, where PLB are at
different stages of development. Although consumer panels provide a good set of data to
measure brand equity from a behavioural point of view, the introduction of some
attitudinal variables would certainly provide more insights about the components of PLB
brand equity from the consumer perspective. Similarly, using the socio-demographic data
from the panel could be useful to analyse PLB brand equity across segments of consumers.
In conclusion, this research constitutes a first attempt to understand PLB from the
perspective of brand theories, however there are many open questions to be tackled in
future. We are positive that conducting research on PLB from a branding perspective
should become indeed, a fruitful stream for future research.
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cross-national analysis”, International Journal of Market Research, Vol. 5 No. 14, pp. 501-19.

Corresponding author
Andres Cuneo can be contacted at: andres.cuneo@uai.cl

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