Project Report on Consumers’ Attitude Towards Private Labels
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A Comparative Study on Consumers’ Attitude Towards Private Labels
With many international, national and regional players trying to tap the market, retail is one of the most dynamic, fast paced upcoming sectors in India. One of the routes to succeed in retail business is to focus on own brands/store brands/Private Label brands (PLs), as the financials of retail firms are very sensitive to margins on the brands they sell. Further, PLs also offer retailers greater control over the supply chain, negotiating margins with National Brands (NBs) manufacturers or companies; opportunity to launch customized and innovative products. Hence, they build a platform for store loyalty and increase footfalls. As managing PLs is quite a critical function, they are to be managed professionally. This paper focuses on determining and comparing the customers’ attitude towards NBs and PLs with respect to different attributes in two major cities of Gujarat. Further, it also discusses the preference pattern of respondents for PLs in different categories of products.
Global retail sales crossed US$12 tn in 2007. Almost reflecting the growth in the world economy, the global retail sales grew strongly during the previous five years (2002-07) at an average nominal growth of about 8% per annum in terms of dollars (Planet Retail Database). In the developed economies, organized retail is in the range of 75-80% of the total retail, whereas in the developing economies, the unorganized sector dominates the retail business (www.scribd.com/doc/29311391). The Indian retail market, which is the fifth largest retail destination globally, has been ranked the second most attractive emerging market for investment after Vietnam in the retail sector (AT Kearney’s Annual Global Retail Development Index, 2007). Hence, retailers as well as manufacturers can tap the opportunity in an upward trend, and the sector can contribute to the economic development of the country. The current (2009) estimated trend of $450 bn, is expected to touch $833 by 2013 and $1.3 tn by 2018. The organized retail sector which is currently estimated to be at $63 bn (14% of the total) will however, grow much faster at 40% to reach $90 bn by 2010 (www.scribd.com/Rishikesh). The overall Indian retail market is growing at 30%; the annual rate of growth for the organized sector is going to be at around 40%. The organized retail market is growing at the rate of 40% and is anticipated to grow at a faster pace over the next three years, especially in view of the fact that
major global players and Indian corporate houses are entering the fray in a big way. The current growth rate is expected to touch $90 bn by 2010 (http://economictimes. indiatimes.com/news). In 2009, the retail
sector accounted for 12% of the country’s GDP and is likely to reach 22% by 2010. It employs around 9% of its workforce, and is well on its way to become a boom sector of the economy (Indian Retail Research,
According to FICCI Earnest & Young, the Indian organized retail sector accounts for only 5% in the country. And it is expected to contribute 15.5% by 2016 (Investment Commission of India). Research on store brands or Private Label Brands (PLs) has been of substantial interest to the retailers as well as the
academicians. Research in this area was conducted by few researchers, viz. the factors associated with PLs adoption, the consumer attitude towards store brands and its relationship with customer satisfaction and store loyalty (Amit and Ruchi, 2009).
To compare consumers’ attitude towards PLs with that of national label brands on selected attributes (quality, price, risk,packaging and image) across two product categories (consumer durables and personal care products), based on a survey of two urban center s in Gujarat.
Research Design and Methodology
Tool employed for generating responses was a structured questionnaire consisting of 30 questions, out of which nine questions were framed to gather demographic as well as personal profile of the respondent, while
one question was framed to rate individual brand attribute on Likert scale, 20 questions were framed to rate and compare different attributes across two different categories viz. consumer durables and personal care products on Likert scale. SPSS 17 and advance Excel applications were used for data analysis. Research was conducted in Ahmedabad and Surat. 200 respondents were studied. Stratified random sampling method (disproportionate method) was used to collect the primary data. Information was collected from 100
respondents each outside different retail outlets in different parts of Ahmedabad and Surat cities. It took 11 months, right from literature survey and review, designing the data collection tool, analysis of data and
report writing for publishing. For data analysis ‘adequacy importance’ model was used, in which five attributes identified were framed in the model and the importance was measured on a scale of
1 = least significant to 7 = most significant across different product categories. ‘adequacy importance’ model happens to be one of the most widely used models appearing in consumer behavior research (Cohen et al., 1972).
Limitations of the Study:
The scope of this study is limited to Ahmedabad and Surat, two selected product categories and five
selected attributes. The results and findings of the study are thus limited in their ability to be projected to the country or foreign countries and other categories. There is no denying the fact that because of
socioeconomic and cultural differences, there is a variation in the attitude of people.
Copyright of IUP Journal of Marketing Management-The IUP Journal of Marketing Management, Vol. X, No. 1, 2011
Author-Amit R Pandya and Monarch A Joshi
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