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Private Labels: The role of Manufacturer Identification, Brand Loyalty and

Image on Purchase Intention

Article in British Food Journal · March 2015

DOI: 10.1108/BFJ-06-2014-0216

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BFJ
117,2
506
Received 22 June 2014
Revised 27 August 2014
Accepted 3 September 2014
British Food Journal
Vol. 117 No. 2, 2015
pp. 506-522
© Emerald Group Publishing Limited
0007-070X
DOI 10.1108/BFJ-06-2014-0216
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0007-070X.htm
THEMED PAPER
Private labels
The role of manufacturer identification, brand
loyalty and image on purchase intention
Cristina Calvo Porral
Department of Marketing, University of La Coruña, La Coruña, Spain, and
Mark F. Lang
Department of Food Marketing, Saint Joseph’s University, Philadelphia,
Pennsylvania, USA
Abstract
Purpose – In today’s highly competitive consumer marketplace, developing and managing successful
private label offerings has become a priority for many retailing companies. The purpose of this paper is
to analyze product, retailer, and individual factors from the private label brand that influence
consumers’ loyalty and purchase intention; along with the influence of the manufacturer identification
on the product package on purchase intention.
Design/methodology/approach – A structural equation model is run on a sample of 362 consumers,
and a multi-group comparison is developed to study the role of manufacturer identification.
Findings – Findings indicate that the influence of private label image and perceived quality on
purchase intention are partially mediated by loyalty and moderated by manufacturer identification.
Results also reveal that store image and corporate reputation enhance private label image and
perceived quality.
Originality/value – This study provides useful insights to advance the understanding of private
label branding and guidance to retailers who should consider store image and company reputation
when designing branding strategies.
Keywords Retailing, Purchase intention, Loyalty, Private label, Manufacturer identification
Paper type Research paper
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 Role of
research has expanded its focus beyond manufacturer brands to more deeply manufacturer
investigate these phenomena (Ailawadi, 2001; Karry and Zaccour, 2006). More
specifically, research on private labels addresses consumer proneness to purchase
identification
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 507
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 packages in some European retailers,
or either through co-branding relationships in the USA; leading to the reduction of the
perceived purchase risk (Purohit and Srivastava, 2001). Third, as a wider set of
consumers develop a habit of purchasing better quality private label brands, and have
good experiences, loyalty can also be expected to increase. The product, consumer, and
retailer factors described above can be expected to influence consumer attitudes,
preferences, and ultimately proneness to purchase private label brands. Although
examined thoroughly in marketing literature, these factors are not well developed
within the private label literature, nor are their relationships and influence measured in
an integrated fashion.
The objective of the present paper is to measure the influence of the emergent
factors listed above in order to broaden the understanding of consumer mindsets and
behaviors toward private label brands. To accomplish this, a causal model examines
the direct and indirect effects on purchase intent of private label image, perceived
quality, loyalty, and manufacturer identification on the product package, respectively.
Our results indicate that private label image and quality perception influence – through
consumer loyalty – consumer intention to purchase private labels. Results also indicate
that manufacturer identification moderates the influence of these variables on private
label purchase intention. This paper first provides a review of the conceptual
background and framework of the variables to be studied. This is followed by a review
of the methodology adopted and fieldwork. Finally, the results and implications of the
study are discussed together with limitations and future research.

2. Theoretical framework and hypotheses development

Figure 1 presents the integration of established variables in the study of private label
products with the introduced variables of store image, retailer corporate reputation,
private label image, perceived quality, loyalty, and manufacturer identification.

2.1 Private label purchase intention

2.1.1 Store image. Private label brands are unique from national brands in that
consumer evaluations of their image is influenced by the positioning or image of the
store that markets them (Ailawadi and Keller, 2004; De Wulf et al., 2005; Kapferer,
2008). Martineau (1958) first introduced the concept of store image as the way a
consumer pictures the store in their mind, influenced by functional attributes and
BFJ Manufacturer
117,2 identification

H7 (+) H9 (+)

H0 (+)
H4 (+) H10 (+)
508 Store image PL image
H1 (+)

PL PL Purchase
H2 (+) loyalty H6 (+) intention

Figure 1. Corporate PL perceived H5 (+)

reputation quality
Proposed H3 (+) H11 (+)
conceptual model H8 (+)

psychological qualities. Quality of products offered, product assortment, services

provided, physical facilities, layout, and internal environment are examples of
attributes contributing to store image (Grewal et al., 1998; Anselmsson et al., 2007).
Store image has also been assessed as the overall attitude or impression consumers
derive from the intrinsic and extrinsic characteristics of the store (Devlin et al., 2003;
Wu et al., 2011).
When consumers have a positive evaluation of the store’s image, it exerts a positive
influence on private labels carried by the store (Wu et al., 2011) and purchase intention
(Grewal et al., 1998; Vahie and Paswan, 2006). The influence of store image on purchase
intentions works through both private label image and perceived quality. Following
Beristain and Zorrilla (2011) and Vahie and Paswan (2006) it can be stated that a better
store image leads to a greater perception of private label brand image; along with a
higher overall quality evaluation (Semeijn et al., 2004; Beristain and Zorrilla, 2011). As
tested by the following hypotheses, we propose that retailers with a more positive store
image have consumers perceive their private label offerings with a higher quality and a
better product image:

H0. Store image is positively related to private label image.

H1. Store image is positively related to private label perceived quality.

2.1.2 Retailer corporate reputation. Consumers view retailers as companies,
considering broader characteristics of their corporate reputation such as economic,
legal, ethical, and social responsibilities toward their stakeholders and society
(Maignan et al., 1999; Beristain and Zorrilla, 2011). As a result, retailer reputation is
linked to consumer perceptions of the image and quality of a retailer’s products (Purohit
and Srivastava, 2001). For example, reputable retailers may screen out poor-quality
manufacturers in order offer to higher-quality private labels to preserve their
reputation; translating to private label products with an image of stronger assurance or
warranty behind them (Purohit and Srivastava, 2001). A positive corporate reputation
also influence consumers perceptions of merchandise quality directly (Bao et al., 2011)
with perceptions of product quality being higher when private label products are sold
through a retailer with a good reputation (Purohit and Srivastava, 2001).
 The influence of a retailer’s corporate reputation on private label image and Role of
quality has been found to ultimately impact private label purchase intention manufacturer
(Anselmsson et al., 2007), a primary variable of interest in the current study. Therefore,
when consumers perceive a retailer to be a competent corporation, with experience,
identification
and that behaves in an ethical way, consumers perceive their private label
products to have a positive image and quality. This will be tested by the following
hypotheses: 509
H2. Retailer corporate reputation is positively related to private label image.

H3. Retailer corporate reputation is positively related to private label perceived

quality.

2.1.3 Private label image. Aaker (1991) conceptualizes brand image as the set of
evaluations and associations in consumers’ minds linked to a brand or product.
Favorable brand image has been shown to lead to higher loyalty and purchase
intentions generally (Yoo et al., 2000) and specifically in the case of private
label products (Wu et al., 2011). The reason may be that consumers use private
label image as an extrinsic cue for evaluating product quality and reducing the
purchase perceived risk (Wu et al., 2011). Therefore, retailers that can maintain
positive evaluations and associations that lead to a favorable brand image,
will develop greater consumer loyalty and purchase intentions toward their
private label brands (Wu et al., 2011). Therefore, the following research hypotheses
are posed:

H4. Private label image is positively related to private label loyalty.

2.1.4 Private label perceived quality. According to Zeithaml (1988), perceived

quality can be conceptualized as the consumers’ global judgment of the brand or
product’s overall excellence or superiority. Aaker (1991) notes that perceived
quality affects consumer perceptions of product or brand attributes and brand
purchase. Moreover, perceived quality has been shown to significantly influence
consumer intentions and proneness to purchase private label products
(Richardson et al., 1996; Bao et al., 2011). Similarly, consumer loyalty toward private
label products is also influenced by perceived quality (Richardson et al., 1996;
Bao et al., 2011).
Private label perceived quality is a factor that has been evolving with consumers,
traditionally perceiving private label brands to be of lower quality (Dick et al., 1995),
but recently with a quality that matches or even exceeds that of manufacturer brands
(De Wulf et al., 2005). Based on this, it is proposed that when consumers perceive
private label products to be of higher quality, their loyalty, and purchase intentions are
higher. So, the following hypotheses are presented:

H5. Private label perceived quality is positively related to private label loyalty.

2.2 The mediating role of loyalty

One of the primary goals of this research is to examine the mediating role of private
label loyalty and its influence on purchase intention. Oliver (1997) conceptualizes brand
BFJ loyalty as a deeply held commitment to rebuy or repatronize a preferred brand
117,2 consistently in the future, despite situational influences; showing a strong influence on
purchase intention (De Wulf et al., 2005; Rondán Cataluña et al., 2006). According to
Aaker (1991), brand loyalty is defined as the attachment a customer has to a brand,
reflecting how likely a customer will switch to another brand.
This relationship has also been extended to private label products and
510 purchases (Choi and Huddleston, 2013). Consumer satisfaction with private label
brands is shown to be a significant driver of private label brand loyalty (Huang and
Huddleston, 2009). More specifically, loyalty to private labels is influenced by favorable
image (Steenkamp and Dekimpe, 1997) and higher perceived quality (Binninger, 2008).
Not only is there empirical evidence that private label image, perceived quality, loyalty,
and purchase intent are related (Rondán Cataluña et al., 2006; Huang and Huddleston,
2009), but it can be stated that private label loyalty mediates the relationship
between image and perceived quality and purchase intent. Thus, the following
research hypotheses will be used to test the nature of the mediating relationship of
private label loyalty:

H6. Higher consumer loyalty leads to higher purchase intentions toward private
label products.

H7. More favorable private label image leads to higher purchase intentions.

H8. Higher private label quality perceptions lead to higher purchase

intentions.

2.3 The moderating role of manufacturer identification

In consumer purchase behavior, an impactful factor may be whether the retailer
identifies the manufacturer of their private label products to their customers; being an
interesting difference uniquely related to private label brands compared to
manufacturer brands (Wu et al., 2011). Often, private labels are characterized as
basic, generic, and functional products without the product manufacturer identified
(Dick et al., 1995; De Wulf et al., 2005; Huang and Huddleston, 2009). However, when
retailers provide manufacturer identification – typically on the package – and others do
not, this may influence consumer evaluations, loyalty, and purchase of private label
products across retailers.
The manufacturer identification stems in part from the implied assurance or
guarantee of product quality that a recognizable manufacturer signals to the consumer
(Baltas, 2003). This provides greater confidence for the consumer and reduces the
purchasing perceived risk, compared to those without manufacturer identification
(Batra and Sinha, 2000; Bao et al., 2011). This way, private labels with manufacturer
identified in the product package allow consumers to associate and connect one specific
private label product with an identified manufacturer, and consequently, reduce the
perceived purchase risk.
Because consumer purchase intentions increase with favorable quality and image
perceptions, and manufacturer identification may positively influence these
perceptions (Purohit and Srivastava, 2001), providing manufacturer identification
may be an effective way to improve purchase intention (Choi and Huddleston, 2013).
Consequently, we propose that manufacturer identification will positively moderate the
influences that private label image, perceived quality, and loyalty have on purchase
intention toward private label brand. This moderating influence can be tested through Role of
the following set of hypotheses: manufacturer
H9. Manufacturer identification moderates the influence of private label image on
identification
purchase intention.

H10. Manufacturer identification moderates the influence of private label loyalty on 511
purchase intention.

H11. Manufacturer identification moderates the influence of private label quality

perception on purchase intention.

3. Methodology
3.1 Data collection
Data to test the research hypotheses was collected in June, 2012 by means of a
structured on-line questionnaire among consumers residing in Spain. Spain presents
a high private label market share, but it is also one where a subset of retailers
identify the manufacturers of their private label products (Bigné et al. 2013); thus
representing an excellent basis for our study, providing a large mature and
developed market. Based on these characteristics, it serves as excellent basis for our
study. A sample of 394 consumers was contacted through an on-line questionnaire.
After a first analysis, some of the questionnaires were removed, gathering a total
amount of 362 valid responses available for analysis. The sampling error was 5.25
percent, with a confidence level of 95 percent under the hypothesis p ¼ q ¼ 0.5.
Each respondent evaluated one of five major Spanish retailers and their
corresponding private label products. The questionnaire also contained several
socio-demographic questions.

3.2 Variables and measurement scales

Retailers and private label brands were selected for this study based on three
criteria. First, we considered the major retailers according to their total revenue in
year 2012 (Worldpanel Distribucion, 2012). Second, we selected retailers who give
their own name to their private label brands through their store name or logo on the
packaging. Third criteria was to include both retailers that disclosed manufacturer
information on their private label brands and retailers that did not disclose this
information. Thus, we selected the major retailers Carrefour, El Corte Inglés,
Mercadona, and Eroski. The retailers Mercadona, Eroski, and El Corte Ingles
clearly provide manufacturer identification on their private label product packages,
and are also popular for providing such information. It should be noted that 61 percent
of Spanish consumers read the package information on food products, including
information on the origin and manufacturers of products (Nielsen, 2010). In contrast,
the retailers Carrefour and Dia provide no manufacturer identification or
information.
The scale items used to measure store image, corporate reputation, private
label image, private label quality perception, loyalty, and purchase intention were
all drawn directly or adapted from the extant marketing literature (Table I). Items
were measured through five-point Likert scales (1 ¼ totally disagree and 5 ¼ totally
agree).
 BFJ

512
117,2

Table I.

and reliability
Factor loadings,
internal consistency,
Construct Indicators Cronbach α λ CR AVE

Store image Stim1 Store X offers a wide range of products 0.716 0.561 0.704 0.504
Chowdhury et al. (1998), Stim2 Store X offers products with high quality 0.876
Beristain and Zorrilla (2011) Stim3 The store X offers the services that I am looking for
(e.g. pay over time, free parking, products’ return, etc.) 0.534
Corporate reputation Rep1 Retailer X behaves in an ethic honest way 0.725 0.701 0.709 0.606
Handelman and Arnold Rep2 Retailer X is concerned with consumers’ health and welfare 0.706
(1999) Rep 3 Retailer X has wide experience in retailing 0.601
PL image Im1 I associate products of private label X to positive characteristics
(e.g. good prices) 0.788 0.756 0.794 0.506
Aaker (1991), Netemeyer Im2 Buyer of products of private label X know how to buy
et al. (2004) (buy with common sense) 0.701
Im3 It gives me confidence buying a private label X 0.798
Im4 The prices of private label X products are adequate and affordable 0.535
PL perceived quality Qal1 The products of private label X have a high quality 0.876 0.839 0.878 0.708
Dodds et al. (1991) Qal2 The products of private label X are reliable/trustworthy 0.879
Qal3 The products of private label X give me the result I am looking for 0.804
PL loyalty Loy1 I consider myself a loyal consumer to the private label X products 0.874 0.904 0.876 0.779
Yoo et al. (2000) Loy2 I will keep on buying store brand X 0.861
Purchase intention Pint1 I would buy private label X 0.903 0.754 0.908 0.768
Netemeyer et al. (2004) Pint2 I am likely to buy private label X 0.915
Pint3 It makes sense to purchase private label X instead of other
competing brands 0.948
4. Results Role of
4.1 Analysis of the measurement model manufacturer
Structural equation modeling was carried out through Amos to analyze the
relationships proposed in the model (Figure 1). Confirmatory factor analysis indicated
identification
a clear factorial structure with the considered constructs and items presenting
acceptable dimensionality and convergent and discriminant validity (Anderson and
Gerbing, 1988). Factorial analysis showed that all standardized factor loadings 513
are significant, exceeding the recommended minimum of 0.50, and with a reliability
level of 95 percent indicating appropriate convergent validity (Fornell and Larcker,
1981; Steenkamp and Van Trijp, 1991; Diamantopoulos and Siguaw, 2006).
To assess internal consistency and reliability, composite reliability coefficients
and analysis of the extracted variance were calculated (Table I ). Acceptable
Cronbach α values ranged from 0.716 to 0.903 (Anderson and Gerbing, 1988; Hair et al.,
1998). Composite reliability exceeded 0.70, satisfying normal criteria (Hair et al., 1998),
providing evidence of convergent validity. The average variance extracted ranged
from 0.504 to 0.779, exceeding the recommended minimum of 0.50 (Fornell and Larcker,
1981; Hair et al., 1998), demonstrating discriminant validity. Finally, the acceptability of
the model was established (CFI ¼ 0.970, GFI ¼ 0.922, RMSEA ¼ 0.041), considering
that the measurement model shows an appropriate fit as the corresponding critical
values are exceeded (Hair et al., 1998, 2006).

4.2 Analysis of the structural model

The structural equation model results presented in Table II were used to assess the fit
of the model to the data and the significance of the relationships proposed. Model
fit criteria suggested Hair et al. (1998, 2006) and Feinian et al. (2008) were used for both
the measurement and the structural model. According to these criteria, acceptable
models should have χ2/df ⩽ 3, AGFI ⩾ 0.80, RMR ⩽ 0.1, RMSEA ⩽ 0.07 and GFI and CFI
higher than 0.90. More specifically, following Hair et al. (1998, 2006) and Feinian et al.
(2008) we have considered the acceptable threshold of 0.07 for RMSEA and a CFI
higher than 0.92, taking into consideration the sample size and the number of observed
variables. That is, the goodness of the fit measures was used according to the influence
of the sample size on the significance of the statistics. Consequently, all of the fit
measures obtained from this analysis indicate that the structural model is acceptable
( χ2/df ¼ 2.361; p o 0.000): RMSEA ¼ 0.061; RMR ¼ 0.054; GFI ¼ 0.918; AGFI ¼ 0.888;
CFI ¼ 0.958). Since the goodness of fit index surpasses the recommended value of 0.9,
the proposed measurement model can be considered as satisfactory.

4.3 Direct effects

With the proposed measurement model showing an adequate general fit to the data, the
parameters for the proposed relationships and research hypotheses were tested
(Table III). First, results indicate that store image and corporate reputation, are both
significantly positively related to private label image and perceived quality, supporting
H0, H1, H2, and H3. In terms of effect size, corporate reputation contributes the most to
private label image ( β23 ¼ 0.741**), followed by store image ( β13 ¼ 0.240**). This order
is switched, however, for private label quality perception: store image ( β14 ¼ 0.643**)
and corporate reputation ( β24 ¼ 0.362**). So, it can be stated that the more favorable
are store image and corporate reputation, the better are private label image and
quality perception.
 BFJ

514
117,2

Table II.

adjustment indexes
Structural modeling
Absolute fit measures Incremental fit measures Pars.
Structural model χ2 df p GFI RMR RMSEA AGFI NFI IFI TLI CFI Normed χ2

Direct 247.496 97 0.001 0.922 0.056 0.066 0.891 0.928 0.955 0.944 0.955 2.552
Partial mediation 295.180 125 0.001 0.918 0.054 0.061 0.888 0.929 0.958 0.948 0.958 2.361
Full mediation 336.325 127 0.001 0.907 0.065 0.068 0.875 0.919 0.948 0.937 0.949 2.648
Causal relationships Direct effect model Partial mediation model Full mediation model
β (standardized coefficients) Path β t β t β t

Store image→PL image H0 β13 ¼ 0.240** 3.232 – –

Store image→PL perceived quality H1 β14 ¼ 0.643** 7.575 – –
Corporate reputation→PL image H2 β23 ¼ 0.741** 8.128 – –
Corporate reputation→PL perceived quality H3 β24 ¼ 0.362** 5.229 – –
PL image→PL loyalty H4 – β35 ¼ 0.700** 7.761 β35 ¼ 0.821** 8.963
PL perceived quality→PL loyalty H5 – β45 ¼ 0.163** 1.991 β45 ¼ 0.066ns 0.835
PL loyalty→purchase intention H6 – β56 ¼ 0.325** 3.479 β56 ¼ 0.790** 13.482
PL image→purchase intention H7 β36 ¼ 0.991** 8.902 β36 ¼ 0.764** 6.057 –
PL perceived quality→purchase intention H8 β46 ¼ −0.255** −2.790 β46 ¼ −0.298** −3.663 –
Squared multiple correlations: loyalty Squared multiple correlations: loyalty
0.694 0.764
Purchase intention 0.695 Purchase intention 0.623
Note: **Significant ( p o 0.05)
manufacturer
identification

(standardized
coefficients)
structural model
Table III.
Results of the
Role of

515
BFJ Following from these antecedent relationships, the relationships between private label
117,2 image and perceived quality with purchase intention are both significant: private label
image ( β36 ¼ 0.991**) and perceived quality ( β46 ¼ −0.255**), supporting H7 and H8.
The relationship between perceived quality and purchase intent is in the wrong
direction which was unexpected and against H8. This may be because, as quality
perceptions increase, perceived or expected price levels increase for consumers
516 and the obvious attractiveness of private label products begins to diminish. As
perceptions of quality increase, consumer intentions to purchase private label products
may decrease as they are compared more directly and equally to manufacturer brands
on quality and price dimensions. This effect may be exacerbated by retailers who
adopt a segmented or tiered strategy with premium quality private label products at
premium prices.

4.4 The mediating effect of private label loyalty

The rationale proposes that private label loyalty mediates the relationship between
both private label image and perceived quality and purchase intention. According to
Baron and Kenny (1986) a mediating effect takes place when three conditions are
satisfied. First, the independent variable has a significant effect on the mediating
variable. Second, the mediating variable has a significant effect on the dependent
variable; and third, the previous significant relationship between the independent
and dependent variables is reduced when introducing the mediator. Additionally, if the
effect of the independent variable becomes statistically insignificant, complete or full
mediation exists; otherwise, partial mediation exists.
From the partial mediation model results, there are significant relationships between
private label loyalty and all of image ( β36 ¼ 0.700**), perceived quality ( β36 ¼ 0.163**),
and purchase intention ( β36 ¼ 0.325**). These results, in conjunction with the
significant relationships between image, perceived quality, and purchase intention in
the direct model, support the proposed mediation effect of private label loyalty
(Table III). Because the relationships between image ( β36 ¼ 0.764**), perceived quality
( β36 ¼ −0.298**), and purchase intention are reduced but remain significant in the
mediation results, there is support for a partial mediation model. The observed
relationship between private label perceived quality and purchase intention continues,
however, to be in the wrong direction as explained previously.
In addition, a comparison between the full and partial mediating models shows that
the latter fits data better (Δχ2 ¼ 41.145; df ¼ 4, p o 0.001). Finally, the squared multiple
correlation for purchase intention is higher in the partial mediating model than in the
full mediating model (0.695 vs 0.623), meaning that the partial mediating model better
explains the relationships among the factors that influence private label purchase
intentions and supports the proposed H6, H7, and H8.

4.5 The moderating role of manufacturer identification

To test the hypothesis that manufacturer identification moderates the effects of private
label image, perceived quality, and loyalty on purchase intentions, the structural
equation model was analyzed through multi-group analysis. The sample was divided
into two groups of retailers, according to whether they identify their manufacturers.
Sample comparisons were then made between private labels with manufacturer
identification (Mercadona, Eroski, and El Corte Ingles, n ¼ 219) and private labels with
no manufacturer identification (Dia and Carrefour, n ¼ 143).
 First, the proposed model was estimated with all hypothesized parameters allowed Role of
to be estimated freely within each subsample ( χ2 ¼ 216.849; p o 0.001; CFI ¼ 0.970). manufacturer
Next, in a series of constrained models, the path coefficients corresponding to the
relationships between private label image (H9), loyalty (H10), perceived quality (H11),
identification
and purchase intention were constrained to remain invariant across the two
subsamples and the model re-estimated. The significantly higher χ2 values for the
constrained models did not improve model fit in any of the cases (Table IV). This 517
supports the hypothesized moderating role of manufacturer identification on the
relationships between purchase intention and private label image (Δχ2 ¼ 0.32;
df ¼ 1, p o 0.001), loyalty (Δχ2 ¼ 0.137; df ¼ 1, p o 0.001), and perceived quality
(Δχ2 ¼ 0.884; df ¼ 1, p o 0.001).

5. Discussion
Private label brands have been become a prominent and important strategy for
retailers today. As such, the understanding of how private labels are perceived and
evaluated and how they influence consumer behavior can benefit from incorporating
conceptual elements from the brands and their manufacturers. To advance this stream
of research, the objectives of this paper are to introduce factors from the branding
literature, integrate them with established private label factors, and assess their
influence on purchase intent of private labels. To accomplish these objectives, product,
retailer, and individual concepts and measures related to image, reputation, loyalty, and
manufacturer identification were examined in an integrated framework.

5.1 Findings and theoretical contributions

A core set of relationships hypothesized in the conceptual framework are that private
label image and perceived quality both influence private label purchase intentions. The
first contribution of this study is that results support both of these hypotheses with
each factor influencing purchase intentions. Consumers holding a more favorable
image of private labels have higher purchase intentions, and this effect is greater than
that of perceived quality. Perceived quality, on the other hand, has an effect in the
opposite direction than expected. This may be due to the fact that private labels
are positioning today as an equal quality alternative to manufacturer brands (Grunert
et al., 2006; Choi and Huddleston, 2013). These results suggest that image is critical to
private label success in today’s increasingly competitive marketplace, being the
variable exerting higher positive influence on consumers’ behavior.
Important antecedent relationships hypothesized were that two store-related
variables – store image and corporate reputation – influence private label image and
perceived quality. The second contribution is that model estimation provides evidence

Moderating effect χ2 df CFI

Unconstrained baseline model 216.849 134 0.970
Constrained paths χ2 Δχ2 df p Hypotheses
PL image→purchase intention 217.169 0.32 135 0.001 H9: Supported Table IV.
PL loyalty→purchase intention 216.986 0.137 135 0.001 H10: Supported Moderating variable
PL perceived quality→purchase intention 217.733 0.884 135 0.001 H11: Supported hypotheses test:
All path constraint 218.474 1.625 137 0.001 multiple group
Note: **Significant ( p o0.05) comparison
BFJ that both store image and corporate reputation are impactful antecedents. Findings
117,2 indicate that when consumers are making decisions about the purchase of private
labels brands, the image of the store, as well as the retailer’s corporate reputation play
determinant roles. Interestingly, corporate reputation exerted greater influence on
private label image, while store image exerted a greater impact on private label quality
perception. It is likely that, in line with previous research, consumer confidence is
518 influenced by the signaling ability of the store image (Bao et al., 2011), and consumers
rely on the store image and the corporate reputation to reduce perceived purchase risk
for private labels (Purohit and Srivastava, 2001).
With the core and antecedent relationships established, the role of the new
consumer-level factor, private label loyalty, was then examined. Because private label
loyalty is highly correlated with private label image, perceived quality, and purchase
intentions, a mediator analysis was performed considering direct and partial and fully
mediated effects. So, one major contribution is the finding that private label loyalty
plays a partially mediating role in the relation between private label image, perceived
quality, and purchase intentions. In our study we first considered the relationship
between private label loyalty and purchase intention, and subsequently we focussed
on the indirect relationships between private label image and quality perception on
private label purchase intention. The mediation of private label loyalty outperforms the
direct effects of private label image and quality perception on purchase intent; while
showing the positive influence of private label loyalty on purchase intention.
In the final analysis, the role of a product-level concept of manufacturer
identification was examined. The final contribution is that our findings reveal that
the presence of manufacturer identification moderates the effects of private label image,
private label quality perception, and loyalty on private label purchase intention. This
finding supports the hypothesis that consumer proneness to purchase private label
products is different for private label brands providing manufacturer identification,
compared to private labels without this information. When a private label brand is
associated with a specific manufacturer, consumers may perceive this as an implied
guarantee, and these private labels are perceived as offering better quality. So, the
presence of the name or identification on the private label product package has
conferred these brands a degree of security and protection against perceived purchase
risk (Gonzalez-Mieres et al., 2006). According to McNeill and Wyeth (2011), customers
tend to choose familiar brands and branded products rather than unfamiliar
brand names, making manufacturer recognition and familiarity a key variable in the
decision-making process.

5.2 Managerial implications

This research study may also provide useful insights for retailers to develop and
manage their private label programs and ultimately attempt increase purchases. First,
our findings provide insight into the importance of store image and the corporate
reputation. The development of commercial policies focussed on reinforcing
store image and corporate reputation contribute to the improvement of private label
image and perceived quality, increasing purchase intention. Second, private label
image, perceived quality, and manufacturer identification are key elements for
consumers when making the decision to purchase private label brands. Particularly,
retailers who introduce and offer private label brands should carefully consider the
positive and favorable impact of the manufacturer identification, in order to influence
consumer purchase intention. There are many opportunities for retailers to leverage Role of
manufacturer identification to enhance private label image and perceived quality both manufacturer
inside and outside of the point of sale. For example, inside the store, retailers could
highlight private label manufactures on the shelf and as part of merchandising
identification
activities. Outside the store, retailers could integrate this information into private label
advertising and promotional campaigns. Third, results show the necessity to continue
considering the role private label loyalty when managing private label programs. 519
Consumer loyalty is a critical goal for retailers because of the increasingly competitive
retail environment and low customer switching costs (Wallace et al., 2004). So, the
creation of customer-centered marketing efforts such as incorporating private label
products loyalty card programs would be valuable.

5.3 Limitations and future research

This research has several limitations which provide opportunities for future
improvements and avenues for further research. The generalizability of our results
is limited by the fielding of the research in one specific European market, so
a cross-cultural study of these relationships would improve generalizability. Moreover,
it would be valuable for further research to incorporate additional variables or
dimensions into the model related to private labels; and also research differences
among product categories or retailer formats. Finally, future research could also
examine additional dimensions of the manufacturer identification construct.

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About the authors

Cristina Calvo Porral, is a PhD Professor in the Economics Analysis and Business
Administration Department at the University of La Coruña (Spain). She is graduated in
Management and Business Administration in the ICADE (Comillas Pontificial University,
Madrid) and also graduated in Marketing and Market Research in the same center. Made her PhD
in Economics in the University of La Coruña (Spain) on Branding and Internationalization in
Textile and Fashion Markets. Her professional career has been developed in the Spanish Fashion
Industry, in the major company Carolina Herrera. Professor Cristina Calvo Porral is the
corresponding author and can be contacted at: ccalvo@udc.es
Dr Mark F. Lang holds a Masters in Business Administration and a Bachelors Degree in
Economics from the York University in Toronto (Canada) and a PhD in Marketing from the
Temple University in Philadelphia. Since year 2008 Mark Lang has been a Professor of Food
Marketing at the Saint Joseph’s University (Philadelphia, USA). In this program he instructs
undergraduate, graduate, and executive students and corporate audiences. Prior to academia, he
worked for over 20 years in food marketing and retailing, being Brand Manager for Melitta Coffe,
Research Marketing for CIBC Bank and PriceWaterhouseCoopers, and for more than 11 years
Corporate Director of Marketing & Research at the Publix Super Markets, performing work for
the American, Canadian, Latin American, and Asian markets.

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