Integrating effect of consumer perception
factors in predicting private brand purchase in
a Korean discount store context
Byoungho Jin
Department of Design, Housing, and Merchandising, College of Human Environmental Sciences,
Oklahoma State University, Stillwater, Oklahoma, USA, and
Yong Gu Suh
Department of Business Administration, Sookmyung University, Seoul, Korea
Abstract
Purpose – Despite proven strategic significance and wide acceptance of private label products (PB), our understanding of PB in international markets
is limited. The purposes of this study are to propose a model that integrates four consumer characteristic variables (price consciousness, value
consciousness, perceived price variation, and consumer innovativeness) toward PB attitude and purchase intention, and to test the model in two
product categories, grocery and home appliances, in a South Korean discount store context.
Design/methodology/approach – A total of 168 usable data (87 for food and 81 for home appliances were collected using mall intercept method
from female shoppers at one Korean discount store in Seoul, Korea.
Findings – The findings revealed that, depending on the product category, contribution of the factors varies. Among four consumer characteristics, only
three in each category exhibited direct and indirect association with PB purchase intention. Perceived quality variability in a food category and price
consciousness in a home appliance category did not show any relationship with PB purchase intention nor with PB attitude. In both product categories,
only two variables, value consciousness and consumer innovativeness, predicted PB attitude. Overall, consumer innovativeness was the strongest factor
predicting Korean shoppers’ PB attitude.
Originality/value – Important theoretical contributions of this study are finding the relative importance of the variables on PB attitude and purchase
intention, and differing roles of consumer variables by product characteristics. Further significance of this study lies in understanding the differing
impact of consumer perceptual variables in predicting PB attitude and purchase intention simultaneously. Managerial implications of these results were
discussed.
Keywords Brand identity, South Korea, Discount stores, Prices, Perception, Consumer behaviour
Paper type Research paper
UK where 36 percent of the total dollar sales of the grocery
market comes from PB, followed by Canada (25 percent),
Germany (24 percent), and France (24 percent) (Hoch,
1996).
Despite proven strategic significance and wide acceptance
of private label products, most prior studies have been
performed in the USA (Burton et al., 1998; Hoch, 1996;
Sinha and Batra, 1999; Richardson et al., 1996), and our
understanding of PB in international markets is limited.
Contribution of PB over retail sales is dependent not only on
countries’ retail structure, such as size of national brand
market, the level of retail concentration, advertising rate by
manufacturer, economies of scale and scope, and imagination
and management talent (Hoch, 1996; Hoch and Banerji,
1993; Steenkamp and Dekimpe, 1997), but also on consumer
characteristics for which PB research in other international
markets has been sparse. For example, De Mooij and
Hofstede (2002) posit that collectivism cultures are less likely
to exhibit preference toward PB than individualism cultures,
since collectivism cultures tend to rely on extrinsic cues such
as well-known brands. Therefore, understanding PB from the
international consumer perspective is imperative, considering
the rapid internationalization of retail markets.
The literature to date has identified a number of consumer
factors correlated with store brand preferences. However, an
An executive summary for managers and executive
readers can be found at the end of this article.
Private label products or store brands (from now on PBs),
owned and branded by retailers, generate higher margins,
increase control over shelf space, and give retailers greater
bargaining power in the channel of distribution. Because of
their exclusiveness, they also increase store traffic and
ultimately lead to customer store loyalty (Liesse, 1993;
Richardson et al., 1996; Steenkamp and Dekimpe, 1997).
One-fifth of all groceries in the USA are currently sold under
retailers’ names (Dunne and Narasimhan, 1999; Garretson
et al., 2002). In European countries, PB has assumed a more
prominent position vis-à-vis the national brands (Richardson
et al., 1996). Notably, PB dominates the grocery market in the
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Journal of Consumer Marketing
22/2 (2005) 62– 71
q Emerald Group Publishing Limited [ISSN 0736-3761]
[DOI 10.1108/07363760510589226]
62
Integrating effect of consumer perception factors
Journal of Consumer Marketing
Byoungho Jin and Yong Gu Suh
Volume 22 · Number 2 · 2005 · 62 –71
attempt to integrate these disparate findings into a solid
model for better comprehension is lacking. Additionally, while
a number of mass merchandisers, such as Wal-Mart and
Target, have increased PB in many product categories other
than food, such as apparel, most prior research has dealt
largely with grocery PB in a grocery chain setting (i.e. Burton
et al., 1998; Garreston et al., 2002; Hoch, 1996; Sinha and
Batra, 1999; Richardson et al., 1996). Product category is the
largest source of variation in PB share across markets (Dhar
and Hoch, 1997), and consumer reaction to brand and price
differs by product category (Monroe and Krishnan, 1985)
and retail environment (Jin and Sternquist, 2003). Therefore,
it is logical to posit that consumer attitude toward PB varies
by product category and retail environment.
This study is designed to fill the voids of prior studies as
discussed above. This study proposes a model that integrates
consumer characteristic variables toward PB attitude and
purchase intention, then will test the model in two product
categories, grocery and home appliances, in a South Korean
discount store context.
The South Korean discount store sector merits close
attention since this sector is one of the few international
markets in which local retailers outperform multinational
retailers (Jin and Kim, 2003). One of the strengths of local
retailers is thought to be their private brand strategies. As
many multinational retailers develop and leverage PB in their
management, it will be important to examine the association
of consumer characteristics to the PB preferences in
international markets.
We first present a brief literature review regarding PB in
Korean discount stores. Following the literature review, we
discuss the constructs of the proposed model and present our
research findings. We conclude with a discussion of the
implications of the study, its limitations and suggestions for
future studies.
and Kim (2003) regarded fresh vegetables and freshly cooked
snacks and dinner dishes as key success factors of E-mart.
One of the notable strategies of E-mart was its introduction
of PB products that brought considerable growth in the
company’s sales. PB products in Korean discount stores
currently generate approximately 8-10 percent of total sales.
In addition to E-mart, Lotte Mart and Carrefour are
launching PB for Korean customers, gradually increasing
the categories and the number of items available in PB.
Recognizing the strategic importance of PB, discounters
operating in Korean markets are expanding PB products
beyond grocery items. In particular, apparel PB products are
showing remarkable growth in sales, especially in men’s casual
wear. Part of this growth is explained by the increasing trend
of Korean companies to give Saturdays off and to changes in
lifestyle due to that trend.
Consumer correlates of PB purchase
A review of the literature reveals that the majority of
consumer factors correlated with PB attitude can be
classified in one of three categories; personality (e.g. Myers,
1966; Burton et al., 1998), perceptual (e.g. Garretson et al.,
2002), and socioeconomic (e.g. Batra and Sinha, 2000;
Richardson et al., 1996). Of these categories, consumer
perceptual characteristics were most linked to PB purchase.
Consumer perceptual variables that have been identified
include price-quality perception, perceived quality, value
consciousness, price consciousness, perceived price fairness,
smart shopper self perception, familiarity with PB, brand
loyalty, perceived risk associated with PB purchase, risk
averseness, and general deal proneness (Bettman, 1974;
Burton et al., 1998; Garretson et al., 2002; Schindler, 1992;
Richardson et al., 1996). A review of these studies shows that
significant attention has been given to consumer perception
toward price and quality of PB since these factors have been
identified as two of the important reasons for purchasing PB
(Hoch and Banerji, 1993; Hoch, 1996). Price and quality
should be examined jointly since the concepts are interrelated.
Lichtenstein et al. (1993) viewed price in relation with quality
when they posited multidimensional aspects of price. For
example, purchasing at the lowest price may the best choice
for some consumers, however, for others, price with respect to
quality may be more important. For this study, we selected
the three most relevant price-quality related variables, price
consciousness, value consciousness, and perceived quality
variation. Additionally, one concept not previously linked to
PB preference, consumer innovativeness, was integrated into
the model.
Literature review
PB in Korean discount stores
In the past ten years in Korea, discount stores have dominated
the retail market showing rapid increases in sales and even
outperforming department stores in recent years. Since the
first discount store, E-mart, was opened in 1993 by
Shinsegae, one of the leading Korean retailers, Korean
discounters (e.g. E-mart and Lotte Mart), joint venture (e.g.
Home Plus, a joint venture of Tesco and Samsung), and
multinational discounters (e.g. Wal-mart and Carrefour) have
competed fiercely in the market. In order to survive the
intense competition, discount stores attempt to differentiate
themselves from competitors in ways other than simply lower
prices. These efforts include facilities within the stores such as
childcare services, bookstores, nail care shops, dry cleaners,
banks and entertainment components such as cafés and
theatres.
Korea is one of the few markets in the world in which local
discounters outperform multinational firms (Jin and Kim,
2003). E-mart, a native Korean discounter, has kept its
premier position for several years and leads the severe
competition. E-mart’s outstanding performance is due to its
shopping environment which is especially geared to Korean
consumers. E-mart has created a shopping environment more
suitable to Koreans’ physical characteristics by adjusting the
height and size of display racks and shopping carts. Also, Jin
Proposed model of PB purchase intention
It is uncertain whether the individual perceptual factors
discussed above increase PB preference, PB attitude, or PB
proneness (i.e. Richardson et al., 1996) since previous studies
used the terms interchangeably. As a result, it is unclear
whether the factors increase PB purchase intention directly or
indirectly increase intention via a positive PB attitude. This
study adapts Fishbein’s model to clarify further the
relationship between PB attitude and purchase intention.
Adopting Ajzen and Fishbein’s (1980) theory of reasoned
action and integrating the factors that might influence private
brand preference and purchase intentions, we present a
proposed model of PB purchase intention in Figure 1. The
premise of the proposed model is that the four consumer
63
Integrating effect of consumer perception factors
Journal of Consumer Marketing
Byoungho Jin and Yong Gu Suh
Volume 22 · Number 2 · 2005 · 62 –71
Figure 1 A proposed model of private brand purchase intention
1998; Sinha and Batra, 1999). Batra and Sinha (2000) found
data from 12 different product categories indicating that price
consciousness directly increases PB purchase and is the
strongest predictor. As such, a positive association is
anticipated between price consciousness and both PB
attitude and purchase intention:
characteristic factors – price consciousness, value
consciousness,
perceived
quality
variation,
and
innovativeness – contribute directly to explaining individual
differences in PB attitude and PB purchase intention.
Following is a discussion of the constructs of each of the
factors in the proposed model and theoretical support for the
hypothesized relationships.
H2-1. The greater the price consciousness, the greater the PB
attitude.
H2-2. The greater the price consciousness, the greater the PB
purchase intention.
PB attitude-PB purchase intention
Burton et al. (1998) found in a grocery store setting that PB
attitude is positively related to the actual percentage of PB
purchase on a shopping trip, and PB attitude is the strongest
predictor of the percentage of PB purchase in relation to other
price perceptions, deal perceptions, and other marketing
related constructs. More recently, Garretson et al. (2002)
provided support for the results of Burton et al. (1998). That
is, PB attitude positively affects the percentage of actual PB
purchase in a grocery store chain in the USA. These studies
measured actual percentage of PB purchase in a shopping trip
by examining the sales receipts. While this measurement was
possible in a grocery shopping setting, our study compares
two product categories: groceries and home appliances.
Because of the relatively low frequency of buying home
appliances and because of the recent introduction of PB home
appliances in the Korean market, it was not feasible for our
study to check sales receipts. Therefore, we used purchase
intention as a proxy of PB purchase. The relationship between
attitude and purchase intention is well established in previous
studies that utilized the Fishbein model (i.e. Shim et al.,
2001). Therefore, we hypothesize:
H1.
Consumer price consciousness differs by product category
(Monroe and Krishnan, 1985). Some consumers may be
more or less price-conscious toward a particular product
category because of perceived risk or personal importance.
Sinha and Batra (1999) discovered that consumers are more
price-conscious in a product category where they perceive
greater risk and price unfairness by national brands. In
addition, Batra and Sinha (2000) found that PB buying
increases as the consequences of making a purchasing mistake
decline. Relative to food items, home appliance products
represent a higher perceived risk, therefore attitude and
purchase intention of home appliance PB products may not
be solely based on low price.
H2-3. H2-1 and H2-2 will differ by product category.
Value consciousness
We define value consciousness in this study as “the quality
one gets for the price one pays” (Lichtenstein et al., 1993;
Zeithaml, 1988). Value consciousness implies consideration
of quality not in absolute terms, but in relation to the price of
a particular brand. Contrary to common perception that price
is the premier factor of PB success, Hoch and Banerji (1993)
found that quality of PB is much more important than the
level of price discount in determining the PB category share.
This indicates that perceived quality is an equally important
factor of PB success. Empirical research has confirmed that
value-related measures are positively related to PB attitude
(Burton et al., 1998; Richardson et al., 1996). Recently,
The greater the PB attitude, the greater the PB
purchase intention.
Price consciousness
While slightly different definitions have been given to the term
price consciousness, this study defines it as: “the degree to
which the consumer focuses exclusively on paying low prices”
(Lichtenstein et al., 1993, p. 235). The general consensus in
research is that price is the most important reason for
purchasing PBs (Burger and Schott, 1972; Burton et al.,
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Integrating effect of consumer perception factors
Journal of Consumer Marketing
Byoungho Jin and Yong Gu Suh
Volume 22 · Number 2 · 2005 · 62 –71
Garretson et al. (2002) provided further evidence that value
consciousness is positively related to attitudes toward both
private brand and national brand (NB). Therefore, other
things being equal, greater value for money perceptions of PB
will lead to higher levels of PB attitude and purchase
intention:
higher quality variation and higher consequences of making a
purchase mistake in experiential product categories than in
search product categories. Because of the inherent risk
involved with product category, the perceived quality gap
between PB and NB may be perceived more important in
home appliances than in food. From this, we anticipate that:
H3-1. The greater the value consciousness, the greater the
PB attitude.
H3-2. The greater the value consciousness, the greater the
PB purchase intention.
H4-3. H4-1 and H4-2 will differ by product category.
Consumer innovativeness
Rogers (1983) defines innovativeness in terms of the degree to
which a person is earlier in adopting an innovation relative to
other members of his or her social system. Consumer
innovativeness in this study is defined as “the predisposition
to buy new and different products and brands rather than
remain with previous choices and consumption patterns”
(Steenkamp et al., 1999). It is generally accepted that
consumer innovative predisposition leads to early product
adoption (Goldsmith et al., 1995; Im et al., 2003; Midgley
and Dowling, 1993) and internet shopping (Citrin et al.,
2000). However, linkage between consumer innovativeness
and PB purchase has received little attention. One reason for
the lack of attention is the long history of PB in US and
European markets. However, as PB in discount stores is
relatively new to Korean markets, Korean consumers with
higher innovativeness will be more likely to have favorable
attitude toward PB and exhibit higher purchase intention of
PB:
Based on retail grocery data, Richardson et al. (1996)
discovered that higher perceived risk associated with a PB
purchase lowers as individual’s perception of value for money.
They also found that an individual with high intolerance for
ambiguity considers value for money less important. This
suggests that value consciousness differs by perceived risk in
the product category and by individual characteristics with
regard to ambiguity. Home appliance PB has been introduced
to the Korean discount market recently relative to food PB, so
the home appliance category is more ambiguous than food.
Likewise, perceived risk and the consequences of making a
purchase mistake are more serious for a home appliance PB
item than for a food PB item. Hence, we hypothesize that:
H3-3. H3-1 and H3-2 will differ by product category.
Perceived quality variation
Perceived quality is a critical element for consumer decision
making; consequently, consumers will compare the quality of
alternatives with regard to price within a category. If a
consumer purchases PB over NB, the decision might be made
on the consideration that quality variation between PB and
NB is minimal or acceptable compared to the price. In other
words, less quality variation between PB and NB will result in
higher PB purchases. One empirical study found that the
perceived quality differential in certain categories is the most
important reason consumers opt to pay more for national
brands (Sethuraman and Cole, 1997). Two studies
empirically suggest a moderating effect of perceived quality
variation on PB proneness. Batra and Sinha (2000) found that
perceived quality variation indirectly impacts on PB purchases
via consequences of making a mistake in brand choice.
Richardson et al. (1996) found that perceived quality variation
between PB and NB positively affects perceived value for
money of PB, which in turn increases PB proneness. As
consequences of making a mistake and value for money of PB
were not included in our model, we expect a direct
relationship between perceived quality variation and PB
attitude/purchase intention:
H5-1. The greater the consumer innovativeness, the greater
the PB attitude.
H5-2. The greater the consumer innovativeness, the greater
the PB purchase intention.
Ever since Midgley and Dowling (1978), scholars have
recognized that the relationship between innovativeness and
behavior is mediated by many situational and product-specific
factors. Richardson et al. (1996, p. 180) suggested that
“consumers may be more prone to select store brands for
‘think type’ rather than ‘feel type’ products”. This finding
implies a more positive relationship between consumer
innovativeness and purchasing PB food items as this
category is considered a “think” type. In addition, because a
food item is consumed in a short time relative to a home
appliance item, innovative Korean consumers may have less
reluctance to choose food PB than home appliance PB. Based
on our conceptual development, we postulate that:
H5-3. H5-1 and H5-2 will differ by product category.
Methodology
H4-1. The greater the perceived quality variation, the lesser
the PB attitude.
H4-2. The greater the perceived quality variation, the lesser
the PB purchase intention.
Measurement
The measurement of two dependent variables of this study,
PB attitude and PB purchase intentions, were adopted and
revised from prior studies (Burton et al., 1998; Shim et al.,
2001). For the measurement of four independent consumer
characteristics, multi-items were taken from prior research
and revised to fit the Korean discount store context. Four
price consciousness measures and four value consciousness
measures were adopted from Lichtenstein et al. (1993).
Perceived quality variation are derived from Richardson et al.
(1996) and revised to reflect various aspects of each product
category examined. For example, in the food category,
Hoch and Banerji (1993) found that the quality differential
between PB and NB depends on the technology requirements
in manufacturing that varies across product categories. Batra
and Sinha (2000) compared two product categories, one with
experience characteristics (i.e. requires experience to
estimate) and one with search characteristics (i.e. requires
little experience to estimate) and found differing effects of
quality variation on PB purchase. That is, consumers felt
65
Integrating effect of consumer perception factors
Journal of Consumer Marketing
Byoungho Jin and Yong Gu Suh
Volume 22 · Number 2 · 2005 · 62 –71
respondents were asked to indicate their level of agreement
with statements regarding differences in taste, nutritional
value, freshness, and package. For the home appliance
category, they were requested to compare in terms of quality,
design, service, and technology. Consumer innovativeness
items are revised based on Manning et al. (1995). The
number of items and sample item for each of the multi-item
measures are shown in Table I. Consumer demographic
characteristics, such as age, monthly average income, and the
size of household, were asked. With the exception of
demographic variables, all measurements were five-point
Likert scale (1 ¼ strongly disagree, 5 ¼ strongly agree).
The product categories selected for comparison were food
and home appliances because these product categories are the
most popularly developed in Korean discount stores. In
addition, the two product categories are considered different
in terms of consumers’ reactions to price and quality,
perceived risk, and frequency of purchase. In particular,
because of wide range of price and technology level in home
appliance category, this study selects one home appliance
item, a television set. To measure consumer perception
toward two product categories, two sets of questionnaires, one
for food PB and the other for home appliance PB, were
developed. The questionnaires were written in Korean and
face validated by experts in PB research and graduate
students studying marketing. The questionnaires were pretested using a convenience sample of approximately 30 female
students and shoppers in Seoul, Korea. The questionnaire
was revised based on the pretest responses (e.g. wording).
usable questionnaires were obtained across the two categories,
87 for food and 81 for home appliance. Approximately 60
percent of food product respondents and 80 percent of home
appliance respondents were in the age range of 20-39. For
both product categories, approximately 50 percent of the
respondents had US$1,500-$3,000 average monthly income
and four family members. These demographic characteristics
represent typical Korean discount shoppers.
Results
Measurement properties
We performed confirmatory factory analysis (CFA) to
assess the measurement model. The first measurement
model indicated a couple of low factor loadings in each
product category. Deleting one item each, a series of
consecutive CFA were performed. In this way, two lowfactor loading items in food and four in home appliance
were deleted. All indicators belong to a respective construct
and standardized factor loadings in each category showed
0.51-0.94 (all t-values . 10:50, p , 0:001), proving
multidimensionality and construct validity of the
constructs. Internal consistency was examined using
Cronbach’s alpha technique. The coefficient ranges 0.670.83 for food and 0.68-0.76 for home appliance, proving
acceptable reliability of the measurements.
Model and hypotheses testing
Results pertaining to structural path estimates are shown in
Table II. The overall fit statistics (GFI ¼ 0:96, AGFI ¼ 0:94,
RMSEA ¼ 0:10 for food; GFI ¼ 0:99, AGFI ¼ 0:98,
RMSEA ¼ 0:04 for home appliance) indicate an acceptable
level of fit. Hypotheses were separately tested by product
categories, then two product categories were compared based
on the results of each product category. Food product
category indicates that: H1 (PB attitude ! PB purchase
intention);
H2-2
(price
consciousness
!
PB
purchase intention); H3-1 (value consciousness ! PB
attitude); H5-1 (consumer innovativeness ! PB attitude);
and H5-2 (consumer innovativeness ! PB purchase
intention) were accepted. However, the rest of the
hypotheses were rejected. The path coefficients for the
home appliance category show that: H1 (PB attitude ! PB
purchase intention); H3-1 (value consciousness ! PB
attitude); H3-2 (value consciousness ! PB purchase
intention); H4-2 (perceived quality variation ! PB
purchase intention); and H5-1 (consumer innovativeness !
PB attitude) were accepted, while the rest of the hypotheses
were rejected.
Sampling procedure
Our sample consisted of female shoppers from one Korean
discount store in Seoul, Korea. We chose female shoppers
because they are the primary shopper in a typical Korean
household. A trained interviewer randomly intercepted
shoppers and requested participation in the study.
Respondents were screened by asking whether a food PB
product had been purchased. Owing to the short history of
home appliance PB in Korean discount stores, it would be
difficult to secure shoppers with experience purchasing home
appliance PB. Therefore, respondents were asked to answer
the questions with the assumption of purchase. To ensure the
meaning of PB to Korean shoppers, detailed written
descriptions about PB with photos of both PB and NB were
provided at the beginning of each questionnaire. In addition,
verbal explanations were presented before shoppers began
answering the questionnaires. The interviewer waited until a
respondent filled out the questionnaire, then collected the
questionnaire. Of the 200 questionnaires administered, 168
Table I Overview of the multi-item measures
Multi-item scale measures No. of items Sample items
PB purchase intention
2
PB attitude
Price consciousness
Value consciousness
2
4
4
Quality variability
Consumer innovativeness
4
4
I will continuously buy PB food (food questionnaire). I will buy PB home appliance in the future (home appliance
questionnaire)
When I buy a PB product, I always feel that I am getting a good deal
The money saved by finding lower prices is usually worth the time and effort
When purchasing a food PB product, I compare the prices of different brands to be sure I get the best value for the
money
Compared with NB, PB in this store has inferior quality
I often seek out information about new products and brands
66
Integrating effect of consumer perception factors
Journal of Consumer Marketing
Byoungho Jin and Yong Gu Suh
Volume 22 · Number 2 · 2005 · 62 –71
Table II Tests of proposed relationships in the model
Path
Product categories
H1. PB attitude ! PB purchase intention
Food
Home
Food
Home
Food
Home
Food
Home
Food
Home
Food
Home
Food
Home
Food
Home
Food
Home
H2-1. Price consciousness ! PB attitude
H2-2. Price consciousness ! PB purchase intentiona
H3-1. Value consciousness ! PB attitude
H3-2. Value consciousness ! PB purchase intentiona
H4-1. Perceived quality variability ! PB attitude
H4-2. Perceived quality variability ! PB purchase intentiona
H5-1. Consumer innovativeness ! PB attitude
H5-2. Consumer innovativeness ! PB purchase intentiona
appliance
appliance
appliance
appliance
appliance
appliance
appliance
appliance
appliance
Coefficient
t-value
Result
0.51
0.31
0.09
0.03
0.14
0.06
0.29
0.28
20.02
0.24
20.08
20.08
20.12
20.23
0.39
0.33
0.21
20.07
5.54
2.91
0.89
0.28
1.72
0.60
2.27
2.64
2 0.17
2.33
2 0.84
2 0.78
2 0.39
2 2.37
4.28
3.28
2.46
2 0.69
Accepted
Accepted
Rejected
Rejected
Accepted
Rejected
Accepted
Accepted
Rejected
Accepted
Rejected
Rejected
Rejected
Accepted
Accepted
Accepted
Accepted
Rejected
a
Note: Indicates differing results by product category
differing importance by product characteristics. As expected,
depending on the consequences of making a purchase
mistake, the significance and relative contribution of the
factors differed. For example, in the home appliance category,
price consciousness did not increase Korean shoppers’ PB
attitude nor their PB purchase intention. Price consciousness
only exerted the smallest contribution to food PB purchase
intention. This result is rather surprising considering Batra
and Sinha’s (2000) finding that price consciousness had the
strongest role in predicting PB purchase in a category such as
food. In contrast, value consciousness in both product
categories positively influenced PB attitude and provided
stronger impact than price consciousness (in value
consciousness, b ¼ 0:29 for food, b ¼ 0:24 for home
appliance as compared to b ¼ 0:14 for food and
insignificant relationship for home appliance in price
consciousness). This finding supports Hoch and Banerji
(1993) in that the quality of PB is much more important than
low price in determining the PB market share. In particular,
value consciousness also directly increases Korean discount
shoppers’ intention of home appliance PB purchase. This
finding suggests that Korean shoppers are more concerned
about quality of home appliance than quality of food.
Contrary to our expectation, the perceived quality variation
did not provide any association with PB attitude or PB
purchase intention in the food category. It only showed
negative association with PB purchase intention in the home
appliance category, indicating that Korean discounts shoppers
are concerned about quality of home appliance. This finding
supports that of Sethuraman and Cole (1997) that the
perceived quality variation is the most important reason of
purchasing NB over PB in certain product categories.
However, unlike Batra and Sinha (2002) and Richardson
et al. (1996), who found indirect impact of perceived quality
variation on PB purchase, this study found direct relationship
in one product category, home appliance. It is interesting to
note that in both product categories, consumer innovativeness
All four hypotheses comparing two product categories (i.e.
H2-3, H3-3, H4-3, and H5-3) were supported. Figure 2
summarizes the significant paths by product category.
Specifically, H2-3, stating that the relationship between
price consciousness and PB attitude and PB purchase
intention differs by product category, was supported. Price
consciousness positively influences PB purchase intention for
food, but not for home appliance. H3-3, specifying that the
relationship between value consciousness and PB attitude and
PB purchase intention varies by product category, was
supported. While value consciousness positively affects both
PB attitude and PB purchase intention on home appliance, it
only positively affects PB attitude on food. H4-3,
hypothesizing that the relationship between perceived
quality variance and PB attitude and PB purchase intention
differs by product category, was supported. In the home
appliance category, perceived quality variation only impacts
on PB purchase intention, not on PB attitude. However, it
neither influences shoppers attitude, nor purchase intention
on food PB. Finally, H5-3, stating that the relationship
between consumer innovativeness and PB attitude and
purchase intention differs by product category, was also
accepted. Consumer innovativeness positively impacts on
both attitude and purchase intention in food PB, however, it
only influences PB attitude in the home appliance category.
Detailed discussion of the findings is provided next.
Discussion and implications
This study attempted to integrate consumer perception
factors into a solid research framework to comprehend
better consumer PB attitude and purchase intention in an
international market (i.e. Korea) in two product categories
(i.e. food and household appliance). An examination of the
significant relationship and relative importance of the factors
influencing PB attitude and purchase intention reveals that,
depending on the product category, contribution of the
factors vary. This affirms Batra and Sinha’s (2000) finding of
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Integrating effect of consumer perception factors
Journal of Consumer Marketing
Byoungho Jin and Yong Gu Suh
Volume 22 · Number 2 · 2005 · 62 –71
Figure 2 Comparison of the proposed model in two product categories
is the strongest factor predicting Korean shoppers’ PB
attitude (b ¼ 0:39 for food, and b ¼ 0:33 for home
appliance). Moreover, consumer innovativeness also directly
predicts Korean discount shoppers’ PB purchase intention
(b ¼ 0:21 for food). This result provides additional evidence
to the general idea that consumer innovativeness is linked to
early product adoption (Goldsmith et al., 1995; Im et al.,
2003; Midgley and Dowling, 1993). From this result, it is
clear that PB is viewed as a new product by Korean discount
shoppers.
In sum, among four consumer perceptual variables
examined in this study, only three in each category
exhibited direct and indirect association with PB purchase
intention. Perceived quality variability in a food category and
price consciousness in a home appliance category did not
show any relationship with PB purchase intention, nor PB
attitude. In both product categories, only two variables, value
consciousness and consumer innovativeness, predicted PB
attitude. However, when it came to PB purchase intention,
consumer innovativeness explains PB purchase intention in
the food category while in the home appliance category, value
consciousness predicts PB purchase intention. This finding
can be interpreted to explain the importance of consumer
innovativeness in Korean discount shoppers’ PB purchase of
food, and value consciousness in PB purchase of home
appliance.
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Integrating effect of consumer perception factors
Journal of Consumer Marketing
Byoungho Jin and Yong Gu Suh
Volume 22 · Number 2 · 2005 · 62 –71
As an initial study investigating the integrated impact of
consumer-side variables in predicting PB attitude and PB
purchase in an international market (i.e. South Korea) and in
two product categories (i.e. food and home appliance), we
hope this study provides researchers and practitioners with
meaningful information. An important theoretical
contribution of this study is finding the relative importance
of the variables on PB attitude and purchase intention. Each
of the four variables were used in predicting PB purchases in
prior research. By integrating the variables simultaneously,
this study was able to discover the relative importance of the
variables.
A second significance of this study was finding differing
roles of consumer variables by product characteristics. We
expect this research fills the void of an under-researched
product (i.e. home appliance PB) and provides logical
explanations from the consumer side on relative success
factors in each product category. Because of mixed usage of
purchase, purchase intention, attitude, and proneness in
previous studies, their results have been rather confusing. A
third significance of this study lies in understanding the
differing impact of consumer perceptual variables in
predicting PB attitude and purchase intention
simultaneously. From our study, it is clear that PB attitude
significantly increases PB purchase intention. However, it is
still unclear why some consumer variables directly influence
on PB purchase intention while other indirectly impact on PB
purchase intention through PB attitude. This merits attention
for further study.
increasing actual product quality in the home appliance
category and educating Korean shoppers with relevant
information are essential.
In the food category, however, significance of both price
and value consciousness in predicting PB attitude and
intention suggests that an important first step in increasing
PB purchases is to lower price and increase value for money
simultaneously. However, for food PB products, keeping
lower prices rather than offering similar quality to NB is more
important. One caution is that just lowering prices is
dangerous since it could create fierce price competition
between PB and NB, thereby resulting in loss of profit in that
product category. Therefore, careful leverage of price and
quality with NB may be more desirable.
Limitations and future studies
A couple of limitations of this study suggest potential research
opportunities. With the exception of Batra and Sinha (2000),
research investigating product category effect in PB purchase
has been scarce. Even Batra and Sinha (2000) compared only
12 grocery products. While our study further introduced a
non-grocery item (i.e. home appliance PB products) and
compared it with grocery items, a wider range of products
needs to be compared. Further, inclusion of more
“experiential” or “feel” type products, such as apparel, is
worthy of attention. Apparel has particular relevance to
investigation because apparel sales volume is growing fast in
Korean discount retailing.
Korea is a culture of strong uncertainty avoidance and
collectivism, and its consumers exhibit a high level of brand
loyalty and quality consciousness (Jin and Koh, 1999). While
this study found differing effects of consumer variables on PB
attitude and intention by product categories, it may not an
issue of the product categories investigated, but rather the
combined effect of cultural dimensions on consumption.
Therefore, cross-cultural comparison of the model would
provide more accurate interpretation and increase the external
validity of the model. A third limitation pertains to consumer
innovativeness. While consumer innovativeness explained the
most significant portion of the PB attitude in both product
categories investigated in a Korean discount store setting, it is
unclear whether the same construct is relevant for explaining
PB attitude in other cultures and in countries with a long
history of private brand products. As consumer innovativeness
varies by national culture (Steenkamp et al., 1999), crosscultural comparison with simultaneous consideration of
length of PB introduction, along with other consumer
perceptual variables, would provide significant interpretation.
‘ ... A key empirical finding in our study is the insignificance
of price consciousness and relative importance of
perceived quality variation in PB purchase intention in the
home appliance category... ‘
The most interesting and novel among our results is the role
of consumer innovativeness on PB purchase attitude and
intention. This finding enables us to contemplate that
consumer innovativeness may predict PB purchase,
depending on the relative length of PB introduction in a
particular country. For instance, consumer innovativeness in
countries with a short history of PB may have more predicting
power in anticipating PB purchase than countries with a long
PB history, such as the USA.
Our overall findings generate relevant insights that are more
directly applicable by marketing management. A key
empirical finding in our study is the insignificance of price
consciousness and relative importance of perceived quality
variation in PB purchase intention in the home appliance
category. Therefore, emphasizing the low price of home
appliances may not be effective for Korean discount shoppers.
Instead what may be emphasized is comparable quality,
quality that matches or exceeds that of leading national
brands. This may be accomplished through product
demonstration, in-store advertising, and extended warranty
periods. Despite the fact that the majority of respondents of
the home appliance questionnaire have not experienced home
appliance PB, Korean discount shoppers perceive that PB
television is inferior to NB television. Therefore, discount
retailers operating in the Korean market should note that both
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Journal of Consumer Marketing
Byoungho Jin and Yong Gu Suh
Volume 22 · Number 2 · 2005 · 62 –71
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Taking a value approach also makes more sense than trying
to take on national brands with high levels of perceived quality
since it is likely to result in pricing levels that are, on average,
lower than those of national brands. In most cases the leading
national brands will enjoy a premium in price as a result on
past investment and associated perceptions of better quality.
The private brand will compete directly with secondary
national brands.
Executive summary and implications for
managers and executives
This summary has been provided to allow managers and executives
a rapid appreciation of the content of this article. Those with a
particular interest in the topic covered may then read the article in
toto to take advantage of the more comprehensive description of the
research undertaken and its results to get the full benefit of the
material present.
Innovation, consumer trial and the private brand
Jin and Suh argue that one factor not included in past studies
of consumer attitude to and purchase of private brands in the
degree to which such purchase represents an “innovative”
decision by the consumer. In developed markets where private
brands are well established this innovation factor has declined
(although it may still apply where private branding is
extended to new product areas and especially outside
traditional grocery markets). However, in markets such as
that in Korea where private branding is not yet as significant,
the extent to which the consumers sees herself taking a risk in
making the purchase is important.
The usual approach in these studies is to look at the
interplay between price, perceived quality and their
interaction (value). Yet the consumer faced with a new
brand (even if it is familiar in another context) must be willing
to switch if the strategy is to succeed. It is at this stage that the
consumer’s willingness to try out new brands – what we can
call innovativeness – becomes important.
We are expecting to accept the transfer of brand equity from
the retail brand itself to an associated product brand. This is
more likely to succeed when compared to the situation where
the consumer faces an entirely new brand but still asks the
consumer to take a purchase risk by switching to the private
brand.
Perceived value is more important than low price in
private branding
Private brands (also called “own label” brands) have been
with us for some long while. These brands – developed by
retailers as alternatives to national brands – represent a
significant challenge to fmcg marketers and something of a
headache to retailers. However, private brands continue to eat
into national brand market share and, as they become more
important to retailers the strategies associated with private
branding have evolved. The result is a greater amount of
choice for marketers and an associated increase in the risks
associated with such branding strategies.
The origins of own-label or private branding lie with
supermarket retailers particularly in the UK. Companies such
as Tesco and Sainsbury introduced products carrying the
retailer’s brand at price points significantly below the main,
nationally-advertised manufacturer brands. Initially these
products were staple ingredients such as flour, butter and
sugar, but over time the range extended to the point where
few product categories do not have private brands available
for consumers to choose.
Elsewhere private brands have been slower to establish a
foothold because of differing retail margins, the structure of
retail markets and variations in shopper attitudes to
supermarkets. However, in most of the developed world,
private brands now make up an important part of total
grocery sales and, in some categories, have by far the largest
market share. Jin and Suh look at Korea, an emerging
economy where a fragmented retail market has held back the
development of private labels.
Quality and value plus risk-taking consumers
The strategy that appears to work best in a market such as
Korean where private label products remain relatively
unfamiliar centers on the delivery of value and the
encouragement of the more innovative consumers. Jin and
Suh conclude that “. . . the quality of PB (private brands) is
much more important than low price in determining the PB
market share”.
This finding suggests that retailers in these markets need to
select product categories very carefully (avoiding those where
market share is overwhelmingly with high profile national or
international brands) and to concentrate on delivering a level
of value that appeals to the consumer. Such a strategy can be
supported by the overall branding and promotional strategy
applied to the retail offer itself – the right consumer
association with the parent brand can assist the private
brand through reducing the perception of risk associated with
that purchase. This allows consumers greater confidence in
taking an “innovative” purchase decision.
There is no reason to suppose that private label strategies
will be any less effective in Korea over the long-term but in
the short-term retailers can use Jin and Suh’s findings to select
approaches with a greater chance of success.
Price, value or quality?
For many years private labels were seen as a low priced option
targeted mainly at price-conscious consumers. This strategy
has been challenged as a result of aggressive promotions by
national brands and the recognition that price-conscious
consumers are not in the majority. Jin and Suh identify three
related traits – price-consciousness, value-consciousness and
quality focus – among consumers. To this they add the degree
to which consumers are “innovative” in their purchase
behavior.
While there are consumers who say “I want the cheapest”,
they are outnumbered by those who say “I want good quality
at a fair price” and those for whom the highest quality is a
requirement. This factor guides us away from the original
private label strategy of low price at all costs and leads us
towards a focus on value for money. The consumer’s behavior
is determined by his/her perception of the brands on offer
and, for most, this results in a focus on “good value”.
(A précis of the article “Integrating effect of consumer perception
factors in predicting private brand purchase in a Korean discount
store context”. Supplied by Marketing Consultants for Emerald.)
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