Investigation of Determinants of Private Label Success
Due to the growth of PLs, they have generated huge interests in the academic literature. Despite prior research, there is a lack of consistency among empirical findings for category determinants of private label market share and private label buyers’ demographics. To fill a gap in the literature, this research aims to draw empirical generalizations about key category-level determinants of private label market share, the characteristics of private label consumers and the competition within the category. Using the universe of retailing dataset with 523 subcategories, we found that PL performs better in the category with the following consumer characteristics: (1) older age; (2) more education; (3) larger number of family members; (4) less knowledge of product quality. Moreover, financial risk is adversely associated with PL market performance whereas the margin potential shows the positive relationship.
Index Terms—Brand Competition, Empirical Generalization, Private Label, Product Category.