The impact of socio-demographic,
psychographic, and product specific attributes
on brand proneness in grocery shopping
A case study in the Netherlands
D.P. van DisselThe impact of socio-demographic,
psychographic, and product specific attributes
on brand proneness in grocery shopping
A case study in the Netherlands
Master Thesis
University of Groningen
Table of contents
Management summary ... 5
Preface... 6
Chapter 1: Introduction and development of store brands ... 7
1.1 Development of store brands ... 7
1.2 Changing role and determinants of success for store brands ... 7
1.3 Advantages of carrying a store brand ... 8
1.4 Store brand differentiation ... 8
1.4.1 The generic store brand ... 9
1.4.2 Regular store brand ... 9
1.4.3 Premium store brand ... 9
1.5 Recent developments in store brands ... 10
1.6 Rationale for the study ... 10
Chapter 2: Literature review of correlates underlying brand proneness ... 12
2.1 Socio-demographic attributes ... 13
2.1.1 Age ... 13
2.1.2 Household size ... 14
2.1.3 Level of education ... 14
2.1.4 Income level ... 14
2.2 Consumer psychographics and product related attributes ... 15
2.2.1 Income constraints ... 15 2.2.2 Price consciousness ... 16 2.2.3 Promotion sensitivity ... 16 2.2.4 Quality consciousness ... 17 2.2.5 Brand loyalty ... 17 2.2.6 Variety seeking ... 18 2.2.7 Performance risk ... 19 2.2.8 Social risk ... 20
2.2.9 Extrinsic cue reliance ... 21
2.2.10 Shopping involvement ... 22
2.2.11 Category involvement ... 23
2.2.12 Perceived quality variation ... 23
Chapter 3: Research Methodology ... 25
3.1 Survey method ... 25
3.1.1 Mode of administration ... 25
3.1.2 Sample design... 26
3.2 Measurement and scaling... 26
3.3.1 Conceptual definition ... 28 3.3.2 Dimensionality ... 28 3.3.3 Reliability ... 28 3.3.4 Validity ... 29 3.4 Analytical framework ... 29 3.4.1 Factor analysis ... 30 3.4.2 Correlation analysis ... 32 3.4.3 Regression analysis ... 33 3.5 Sample size ... 34 Chapter 4: Results ... 35 4.1 Sample description ... 35 4.2 Summated scales ... 36 4.2.1 Construct dimensionality ... 36 4.2.2 Construct reliability ... 40 4.2.3 Construct validity ... 42 4.3 Correlation analysis ... 43
4.3.1 Budget store brand ... 44
4.3.2 Regular store brand ... 45
4.3.3 National brand ... 47
4.3.4 Premium store brand ... 49
4.4 Regression analysis ... 50
4.4.1 Budget store brand ... 50
4.4.2 Regular store brand ... 53
4.4.3 National brand ... 55
4.4.4 Premium store brand ... 57
Chapter 5: Conclusions ... 60
Chapter 6: Managerial implications ... 62
Chapter 7: Limitations and further research ... 63
Appendix A: Product Overview ... 64
Appendix B: Questionnaire ... 65
Appendix D: Factor Analysis (category involvement) ... 68
Appendix E: Construct Reliability ... 69
Appendix F: Correlation Analysis... 70
Appendix G: Multiple Regression Analysis ... 72
Management summary
This study tried to answer how brand proneness is affected by socio-demographic, psychographic, and product-specific attributes. It reveals how proneness varies between budget, regular, and premium store brands and how they are different from national brands. A representative sample of Dutch grocery shoppers is used for a case study. Several categories of fast moving consumer goods like coffee, chips, spaghetti, pizza, and chocolate paste were investigated in order to define if proneness is consistent across categories.
The conceptual model consists of variables presented in the literature framework. First there are socio-demographic characters like age, household size, education level, and income level. Second, psychographic constructs were presented that cover areas like price, quality, loyalty, involvement, risk, and extrinsic cues. An important characteristic of these psychographic constructs is that they consist of summated scales. Finally, there are product specific attributes included in the conceptual model. The selected variables were then used in twenty correlation and multiple regression analyses (for each brand in each category a separate analysis).
The results show that income level is important in explaining budget store brand proneness. It is by far the cheapest alternative in many categories and attracts grocery shoppers with low income who also face income constraints. Budget store brand proneness is also driven by quality. Moreover, budget store brand buyers care less about quality and perceive not many quality differences with other brands. These price sensitive grocery shoppers prefer just the cheapest alternative and do not perceive any risk about product performance.
For the regular store brand it was difficult to explain proneness. Moreover, for none of the constructs impact was consistent in all categories and this brand just not attracts typical segments of grocery shoppers. There were some indications that lower incomes are still more inclined to buy regular store brands and although it is quite more expensive than the budget store brand it still attracts price sensitive grocery shoppers. Further, variety seekers are inclined to buy regular store brands. Quite surprising is that, despite quality claims, the regular store brand is perceived reasonably lower in quality than national brands. Moreover, grocery shoppers who perceive more quality differences are less inclined to buy regular store brands. For regular store brands it is difficult to compete with category leaders, but they clearly have potential to compete with smaller national brands.
Preface
Chapter 1: Introduction and development of store brands
Store brands or private labels (in this research mentioned store brands) are brands that exclusively belong to a particular store chain and compete in several product categories with major manufacturers’ brands (Semeijn et al., 2004). Store brands are produced by the retailer himself or according to his instructions and sold under the retailers’ name or label in the store of the retailer (Baltas, 1997).
1.1 Development of store brands
The role and importance of store brands have changed dramatically over the past decades (Semeijn et al., 2004). National brands used to be important in the development of the optimal product solution, but increasingly lost ground after the first introduction of store brands over a hundred years ago (Raju et al., 1995). In the past, consumers preferred national brands over store brands mainly because of a more favorable image. More recent studies show that store brands become increasingly popular due to increased trust in quality of these products (Baltas, 1997). Store brands in Europe developed into seriously strong competitors of national brands by offering good value for money (Baltas, 2001). As retailers have taken a more professional approach in developing store brands, consumers’ attitude towards store brands changed and they are no longer perceived as inferior products (Steenkamp and Dekimpe, 1997; Verhoef et al., 1997). Sales of store brands grow faster than national brands and achieved much higher levels of penetration in the past few years (Corstjens and Lal, 2000; Wulf et al., 2005). The market share of store brands in most consumer packaged goods categories has grown tremendously, and store brands now account for more than 20 percent of global grocery sales (M+M Planet Retail, 2009). In the United States store brands outperformed national brands in eleven of the last twelve years in terms of sales growth (Lamey et al., 2012). In Europe retailers successfully increased store brand market share through extensive improvements in package design, labeling, advertising and branding strategies (Hester, 1988). For example in the UK store brands raised their market share from 22 percent in 1977 to 40 percent in 1998 and in 2009 even 43 percent (Baltas, 1997; Baltas and Doyle, 1998; Nielsen, 2011).. AC Nielsen published a study in 2005 which shows that store brands in Europe are dominating, with a share of 23 percent across 17 markets. Compared to regions like Latin America and Asia consumers in Europe have a remarkably high store brand awareness and acceptance. Store brands in Europe perform also well in terms of growth. In 2005 the growth rate of store brands was 5 percent, more than double the growth of manufacturer brands (AC Nielsen, 2005).
1.2 Changing role and determinants of success for store brands
greater familiarity and awareness of these brands among shoppers (Nielsen, 2011). Store brands evolved from second-best products with low price and low quality serving price-sensitive consumers, into more appealing brands attracting consumers who seek quality products along with reduced prices (Prendergast and Marr, 1997; Veloutsou et al., 2004). Grewal and Levy (2009) found increasing evidence of store brands with similar quality levels coupled with 10-15 percent lower prices compared to national brands. Store brands also improved their image nowadays by creative and innovative packaging, while the product range became more differentiated with even different store brand lines (McGoldrick, 1984; Burt and Davis, 1999). Many consumers perceive that store brands are cheaper than national brands, but are equal in quality and reliability (Rondán Cataluña et al., 2006). Steenkamp et al. (2004) mention important factors contributing to the success of store brands in fast moving consumer goods. First, less advertising is needed as store brands benefit from the retailers’ image. Second, there is a lack of innovations by manufacturers of branded products. Third, there is little distance between manufacturer brands and store brands in terms of quality, value and confidence. Finally, there is little distinction in packaging between manufacturer and store brand brands.
1.3 Advantages of carrying a store brand
Carrying a store brand has several advantages. Retailers expect to gain increased store loyalty by carrying a store brand as it generates customer traffic because the store brand typically is only available at one chain and subsequently can assist the retailer in gaining a unique competitive position in the market (Richardson et al., 1994; Dick et al., 1996; Richardson et al., 1996; Corstjens and Lal, 2000). Although store brands in general are reasonably lower priced than national brands, a major advantage is that store brands still yield higher unit margins than national brands (Ailawadi and Harlam, 2004). Mainly due to lower supply prices and lower marketing expenditures retailers achieve these higher margins while price is often still low compared to national brands (Broadbent, 1994; Corstjens et al., 1995). On average store brands are 10 to 30 percent cheaper than national brands in grocery product classes (Baltas, 1997). Retailers also become less dependent on national brand manufacturers as their negotiation power improved through the positive development of store brands (Mills, 1995; Richardson et al. 1996; Steenkamp and Dekimpe, 1997; Narasimhan and Wilcox, 1998). In a recent study is argued that negotiation power improved because buying prices of store brands can be 25 percent lower than comparable manufacturer-branded products (KPMG, 2004). In total, the average gross margin of store brands can be 25 to 50 percent higher than national brands (Semeijn et al., 2004). From a consumer view store brands can result in a more favorable store image and from a retailer perspective store brands clearly have potential to enhance chain profitability and product turnover (Liesse, 1993; Quelch and Harding, 1996; Richardson et al., 1996). Store brands carrying the retailer brand and consistent package design for several categories reinforce brand awareness and recall of the retail brand, impressions of the store, and ultimately may facilitate consumer’s decision making (Ailawadi and Keller, 2004). Store brands also enable chains to expand into lower volume categories for which success depends on greater per unit contribution margins (Dick et al., 1996).
1.4 Store brand differentiation
Information Resources Inc. (2007) recently suggested that retailers should expand into three-tiered quality offerings as a means to reach a much wider consumer base. Sayman et al. (2002) stated that positioning of store brands can have an important influence on store brand performance. In essence it means choosing the appropriate perceptual distance with national brands as this distance determines cross-price sensitivity (Sayman et al., 2002). Depending on the strategic orientation it is possible to differentiate generic, regular, and premium store brands (Kumar and Steenkamp, 2007; Zielke and Dobbelstein, 2007)
1.4.1 The generic store brand
Generics are comparable to historical store brands as they emphasize the basic use of a product. Due to evolvement of the regular store brand, the so-called budget store brand is comparable to generics. Package design is simple and not very informative, limited advertising is used and quality is quite below national brands as it economizes on ingredients to reduce costs while the brand is positioned in the lowest price tier (Kumar and Steenkamp, 2007, Yelkur, 2000; Harris and Strang, 1985). They appeal to the extreme price-sensitive segment as price is even far below the regular store brand (Dick et al., 1995). Typically, budget store brands have no quality-equivalent national brands in the traditional supermarket assortment (Burt, 2000). The major difference with traditional generics is that budget store brands are associated with the retailer. Several retailers in the Netherlands carry a budget store brand, for example Albert Heijn and C1000.
1.4.2 Regular store brand
The classic store brand is often positioned similar to or slightly below the national brands as a mid-quality alternative (Kumar and Steenkamp, 2007). In practice store brands often imitate the category leader to signal comparable quality at a lower price (Kumar and Steenkamp, 2007, Sayman et al. 2002). In the Netherlands retailers typically carry their own regular store brand, although their type of labeling differs. Like Albert Heijn, Jumbo, Plus, and C1000 it is possible to use the retailer brand. Other retailers, like Dirk van den Broek with ‘1 de Beste’, use a fancy label for the regular store brand. As earlier mentioned, the regular store brand is on average 10 to 30 percent cheaper than the leading national brand (Baltas, 1997).
1.4.3 Premium store brand
The premium store brand is a brand positioned like leading national brands (Richardson et al. 1994; Hoch, 1996; Davies, 1998). They are at the top end of the market and deliver quality equal to premium-quality national brands (Kumar and Steenkamp, 2007). Premium store brands are high value added brands and contrary to regular store brands, the premium store brand is not priced below national brands (Laaksonen and Reynolds, 1994). Moreover, it is usually priced reasonably above national brands (see figure 1.1). In the Netherlands Albert Heijn is an example of a retailer that successfully established a premium store brand with AH Excellent.
Coffee Budget store brand Regular store brand National brand Premium store brand
Price (Q1 2011) € 1,38 € 2,89 € 3,43 € 2,49
1.5 Recent developments in store brands
A recent study indicates that market shares of store brands are still growing and strengthened by the economic slowdown in several developed markets (Nielsen, 2011). A majority of the consumers purchased more store brands during the economic turndown and when economy will recover almost all consumers retain to buy store brands (Nielsen, 2011). Lamey et al. (2007) also mention how private-label share grows disproportionally in periods of economic contraction and that much of this gain persists in better times. Nevertheless, there are differences between countries and product categories when it comes to store brand performance. The global market share of store brands is about 15 percent (Nielsen, 2011). In Asia there are practically no countries with a market share larger than 5 percent, while in the US market share is about 20 percent and in Europe on average 35 percent (Nielsen, 2011). Even though Europe is regarded as the continent where store brands are best developed, it is also mentioned that category leaders and healthy brand leaders do not suffer from store brands (Nielsen, 2011). Mainly small and medium brands got delisted in favor of store brands (Nielsen, 2011). Store brands in the Netherlands perform with a market share of 25 percent below European average (Nielsen, 2011). Quite remarkable as retailer concentration is high in the Netherlands, enabling retail chains to develop their own brands and achieve economies of scale on many aspects (Steenkamp and Dekimpe, 1997). For instance, the three largest chains account for more than 60 percent of total grocery sales in the Netherlands (Steenkamp and Dekimpe, 1997). Even though quality perceptions about store brands have improved, in the Netherlands still more than 50 percent does not perceive store brands of equal quality compared to national brands (Nielsen, 2011). In some product categories store brands perform extremely well while in others they struggle to compete successfully with manufacturer brands (Livesey and Lennon, 1978; Hoch and Banerji, 1993; Raju et al., 1995; Dhar and Hoch, 1997; Batra and Sinha, 2000; Yelkur, 2000).
1.6 Rationale for the study
To summarize, store brands have made an incredible development over the years and it is claimed by the Private Label Manufacturers Association that store brands are comparable to national brands in terms of quality. An interesting question is why people still choose often for the more expensive national brand. Many studies revealed that preferring a certain type of brand is more complicated than just trading off price and quality. The major question of this research is to give further insights in underlying factors of decision making in the supermarket and to go beyond rationale decision making:
To what extent is budget, regular, and premium store brand proneness affected by various socio-demographic, psychographic, and product specific attributes? And how is it related to national brand proneness? (A case study in the Netherlands across five product categories of fast moving consumer goods).
(Luijten and Reijnders, 2009). It is questionable whether the regular store brand nowadays still is seen as a reasonably priced alternative, especially during the current economic turndown. Consumers possibly search for cheaper alternatives in order to reduce costs as price traditionally used to be an important reason to buy store brands and store brands historically used to compete with budget brands (Hansen et al., 2006). Nevertheless, the landscape changed as the smaller, regional budget brands are replaced by budget store brands. As earlier mentioned, the regular store brand moved upwards. An interesting question is whether the regular store brand is sufficiently differentiating from the budget store brand in terms of quality and with respect to the national brand whether it is still a reasonably priced alternative. Is the regular store brand a real threat for large national brands? The premium store brand is relative new and an interesting question will be whether this expensive brand is considered as a serious alternative in frequently bought categories. Will a differentiation in store brands result in different grocery shopper segments or will there be cannibalization? Finally, whereas previous studies often focused on specific areas of interest that possibly underlie decision making in grocery shopping, this research will combine previous insights in an integrated model. Albert Heijn will be used as a case as it is a retailer well known for its’ store brand differentiation in a regular store brand (AH Huismerk), budget store brand (Euroshopper), and premium store brand (AH Excellent).
Chapter 2: Literature review of correlates underlying brand proneness
There are many factors for consumers that possibly underlie the decision of which brand to buy when it comes to grocery shopping. It is not always a straightforward choice based on price or quality, or just buying the same sort of brand across various categories. Market shares across store brands differ largely due to the fact that consumers do not base their decision completely on price (Hogan, 1996). One could think of other attributes such as quality and perceived value (Veloutsou et al., 2004). Consumers’ perception of brand loyalty (Dickson and Sawyer, 1990; Cortsjens and Lal, 2000; Wood, 2004) and individual characteristics are also important factors influencing product and brand choice. Differences in objective or perceived product attributes and marketing activities between manufacturer and store brands may lead to different perceptions and preferences among customers (e.g. Bellizzi et al., 1981; Cunningham et al., 1982; Richardson et al., 1994). Subsequently, heterogeneous preferences will lead to heterogeneous allocation of category purchases with respect to store and national brands (Baltas et al., 1997). The purpose of this chapter is to investigate how socio-demographic, psychographic and product specific attributes have been used previously in this area of research and examine whether these attributes are useful to gain further insights in purchase decisions for groceries. This chapter also presents hypotheses, where one has to consider that for the uncovered area of the budget and premium store brand they were less based on theory and more on judgment from the author.
Socio-demographic attributes will consist of simple characteristics such as age, income, household size and education level. Psychographic attributes is about more complicated constructs like quality consciousness, price consciousness, income constraints, promotion sensitivity, shopping involvement, variety seeking, brand loyalty, extrinsic cue reliance, performance risk, and social risk. Finally there are a few product specific attributes like category involvement and perceptual quality variation. Figure 2.1 presents a conceptual model and the remaining of this chapter is about how various factors potentially influence brand proneness.
2.1 Socio-demographic attributes
Socio-demographic attributes are basic characteristics of consumers that play an important role in many aspects of life. It is reasonable to assume that these characteristics also affect to some extent brand proneness in grocery shopping. As store brands on average are lower priced than national brands one can expect they should appeal to certain socio-economic groups. The most obvious example is income which can create or eliminate certain constraints. Consumers with low income possibly cannot afford national brands and will be constrained to store brands while people with higher incomes are not constrained and make decisions on other factors.
Previous studies did not found strong relations between socio-economic demographics and brand proneness in grocery shopping. In a study from Frank and Boyd (1965) socio-demographic characteristics explained only 7 percent of the variation in the dependant variable. Myers (1966) found that socio-economic variables have no predictive power in distinguishing store brand prone consumers from proneness to other brands. In other studies socioeconomic variables were also ineffective to identify store brand proneness (Bettman, 1974; Burger and Schott, 1972; Fugate, 1979; Richardson et al. 1996; Baltas and Doyle, 1998; Burt, 2000; Baltas, 2001).
Nevertheless, most of these studies are rather outdated while these factors are relative easy to retrieve. Furthermore, other authors suggest that demographics might not directly affect brand proneness but indirectly through several psychographic constructs (Mittal, 1994; Urbany et al., 1996). Ailawadi et al. (2001) investigated indirect relations and found several socio-economic demographics significantly related to psychographics. For example income which is related to price consciousness. Therefore, socio-demographic attributes have to be included and a more detailed review of literature is provided in the next section.
2.1.1 Age
Age can potentially affect brand proneness. Although Cotterill et al. (2000) found that age is negatively related to store brand proneness, it sounds obvious that older people in general have more experience in grocery shopping and developed more sophisticated decision processes which are more based on intrinsic cues in order to select a specific type of brand. Historically it was argued that store brand buyers are older than national brand buyers (Frank and Boyd, 1965). Further, a more recent study indicates that trading areas where store brand market share is high contained relative many elderly people (Dhar and Hoch, 1997). On the other hand older people may be very loyal to the brand which they have been using for decades. They might be less open for new entrants in their choice set, which will especially harm the budget and the premium store brand as these types of store brands are relative new and therefore less established. Younger people may be more sensitive for extrinsic cues like brand name and image. If that is the case they are probably more inclined to buy the national brand. H1a: Age is negatively related to budget store brand proneness.
H1b: Age is positively related to regular store brand proneness.
2.1.2 Household size
Household size is also considered as a socio-economic predictor of brand proneness. Regardless of factors such as age, income or education it is expected when household size increases consumers will be more inclined to buy the budget or regular store brand, simply because larger households have to allocate budget across more individuals. Hoch (1996) found that large households are more price sensitive and prone to buy store brands. Furthermore, store brand market shares are higher in areas containing more large families (Dhar and Hoch, 1997). Household size will be negatively related to the more expensive national brand and premium store brand. H2a: Household size is positively related to budget store brand proneness.
H2b: Household size is positively related to regular store brand proneness. H2c: Household size is negatively related to national brand proneness. H2d: Household size is negatively related to premium store brand proneness.
2.1.3 Level of education
The relation between education level and brand proneness is somewhat complicated. Burger and Schott (1972) and Cunningham et al. (1982) found that store brand buyers are better educated than buyers of national brands. Subsequently, Richardson et al. (1996) argue that consumers with higher education are better able to process intrinsic attributes like ingredients and nutritional value, while consumers with lower education rely more on extrinsic cues. Low educated consumers are less able to process informative cues regarding intrinsic attributes. Therefore, less educated consumers might be more inclined to buy national brands in which extrinsic cues are heavily used. Dhar and Hoch (1997) found that store brand market shares are higher in trading areas that contain relative many people with higher education. Therefore one could expect for the regular store brand a positive impact of education. On the other hand, one could imagine a positive relation between education and income and subsequently a preference for relative expensive brands. For the national brand and the premium store brand it is therefore not obvious in which direction education level is related. Low educated consumers might be restricted to the budget store brand when income is also low and further they might be unable to judge quality of products properly. One has to consider that quality of the budget store brand is often perceived as low. Therefore, it is expected that budget store brand proneness is negatively affected by education level.
H3a: Level of education is negatively related to budget store brand proneness. H3b: Level of education is positively related to regular store brand proneness.
H3c: There is no straightforward relation between level of education and national brand proneness.
H3d: There is no straightforward relation between level of education and the premium store brand proneness.
2.1.4 Income level
consumers are more prone towards the store brand than consumers with lower income. Murphy (1978) found similar relations; consumers with high income are significantly more prone towards store brands than consumers with lower income. More recent studies also indicate that the relation between income and brand proneness is unclear. Baltas and Argouslidis (2006) and Cotterill et al. (2000) for example found that income is positively related to store brands. It probably reflects the changing image of store brands of becoming a quality brand. Nevertheless with all other aspects being constant one could expect that there is a positive relation between income and choosing a national brand. Hoch and Banerji (1993) namely found that store brand share increases when aggregate disposable income goes down. Dhar and Hoch (1997) revealed that store brands obtain higher market share when the trading area contains more people with lower income. Therefore, as it is also difficult to derive consistent conclusions from recent studies it is not obvious that low income will result in a higher probability of buying the regular store brand. For consumers with extreme budget constraints it is more reasonable to assume a higher probability of buying the budget store brand. For premium store brands it is assumed they should appeal more to consumers with high income as these brands are relative expensive. H4a: Income is negatively related to budget store brand proneness.
H4b: There is no straightforward relation between income and regular store brand proneness. H4c: Income is positively related to national brand proneness.
H4d: Income is positively related to premium store brand proneness.
2.2 Consumer psychographics and product related attributes
Consumers have heterogeneous preferences when it comes to grocery shopping. There are discriminating product characteristics such as quality and price which make certain brands more appealing. Besides objective differences, it is interesting to investigate whether there are subjective differences. Objective quality of fast moving consumer goods is difficult to evaluate because there are so many differences in taste and preference of individuals. Further, consumers can compare different brands on price where one consumer can consider a cheap brand as a profitable offer, while another consumer perceives it as a inferior product. Therefore it is not recommended to evaluate brand proneness on objective product characteristics but on how consumers perceive different product elements and the extent to which they rely on several psychographic attributes. The following elements are investigated: income constraints, price consciousness, promotion sensitivity, quality consciousness, brand loyalty, variety seeking, performance risk, social risk, extrinsic cue reliance, shopping involvement.
2.2.1 Income constraints
constraints are positively related to store brand usage. For this research it implies that proneness towards the budget and regular store brand should be higher when there are serious financial constraints. For the premium store it is probably not true as it is relative expensive. Grocery shoppers who not perceive income constraints are probably more inclined to buy the national brand or the premium store brand.
H5a: Income constraints are positively related to budget store brand proneness. H5b: Income constraints are positively related to regular store brand proneness. H5c: Income constraints are negatively related to national brand proneness. H5d: Income constraints are negatively related to premium store brand proneness.
2.2.2 Price consciousness
Price consciousness is defined as the degree to which consumers focus exclusively on paying low prices (Lichtenstein et al. 1993). Ailawadi et al. (2001) argue that price conscious consumers are increasingly interested in price savings and it increases when consumers have financial constraints. Baltas (1997), Burton et al. (1998), Sinha and Batra (1999), and Hansen et al. (2006) suggest that consumers may respond positively towards store brands when they have a desire to pay low prices. In Kirk (1992) it is mentioned that 67 percent of the respondents prefer store brands over national brands mainly because of a low price. Nevertheless, one has to differentiate in store brands. For the budget store brand it is still expected that price conscious consumers will have a larger preference for this brand as large savings can be achieved. For the regular store brand it merely depends on the price differential with other brands. In most categories the regular store brand is still priced below the national brand, but in others the price differential is not that large anymore. On average store brands are 10 to 30 percent cheaper than national brands (Baltas, 1997). In this research price difference varies from 16 to 50 percent (see Appendix A). The premium store brand will not be considered largely by price conscious consumers as it is too expensive and the national brand will be considered only seriously by price conscious consumers when it is on discount. Price consciousness also depends on the category. There are large differences in store brand share across product categories which led to statements that store brands perform particularly well in categories where consumers are price conscious (Raju et al., 1995). Batra and Sinha (2000) suggest that price consciousness is mediated by several demographic and attitudinal variables. Research has shown that price consciousness rises when income is lower and people are motivated to search for savings (Gabor and Granger, 1979; Lumpkin et al., 1986). Further, price consciousness is higher among consumers who believe less in quality claims of more expensive brands and perceived quality variation is lower (Lichtenstein et al., 1988).
H6a: Price consciousness is positively related to budget store brand proneness. H6b: Price consciousness is positively related to regular store brand proneness. H6c: Price consciousness is negatively related to national brand proneness. H6d: Price consciousness is negatively related to premium store brand proneness.
2.2.3 Promotion sensitivity
by various retailers in The Netherlands and regular prices were also reduced in many categories. Nevertheless, it is important to discriminate price conscious consumers from promotion sensitive consumers. Both type of consumers search actively for price savings, but prefer different brands (Ailawadi et al., 2001). Baltas (1997) and Burton et al. (1998) found that consumers who purchase relative many store brands are less sensitive to national brand promotions. Baltas (2001) even argues that promotion sensitivity is not related to store brand proneness. Store brands are permanently lower priced while national brands only incidental. Obviously, national brands on offer will attract price-sensitive consumers but when it is for example still more expensive than store brands, the price conscious consumers might still avoid the national brand. Therefore incidental savings should not be targeted to these consumers who are loyal towards the cheaper store brand. Another interesting aspect of price promotion is asymmetric cross-price elasticity. Blattberg and Wisniewski (1989) mentioned that price deals on national brands will steal not only from comparable brands, but also from the store brand. Store brands are more vulnerable to national brand promotions as their own promotional efforts are ineffective in stealing from national brands (Allenby and Rossi, 1991; Kamakura and Russell, 1989; Blattberg and Wisniewski, 1989).
H7a: Promotion sensitivity is not related to budget, regular, and premium store brand proneness. H7b: Promotion sensitivity is positively related to national brand proneness.
2.2.4 Quality consciousness
Product quality is by definition relevant to quality conscious consumers. Quality consciousness should deter consumers from using store brands, because such brands are perceived to be inferior in quality (Cunningham et al., 1982; Richardson et al., 1994). Traditionally, quality conscious grocery shoppers should be more inclined to buy the national brand. Ailawadi et al. (2001) also found that quality conscious grocery shoppers are less inclined to buy the store brand. Nevertheless, these studies are quite outdated. First, it is not recommended to treat store brands as a general brand as they are more differentiated nowadays. Many retailers do not offer only one regular store brand, but also a budget store brand and or a premium store brand, all intending to attract different segments of grocery shoppers. Furthermore, the Private Label Manufacturers Association claims that store brands are similar to national brands in terms of intrinsic quality. Therefore it might be questionable to state that quality conscious grocery shoppers are less inclined to buy the store brand. Nowadays, it is probably more applicable to the budget store brand, while the regular and certainly the premium store brand should also attract to some extent the quality conscious grocery shopper.
H8a: Quality consciousness is negatively related to budget store brand proneness. H8b: Quality consciousness is positively related to regular store brand proneness. H8c: Quality consciousness is positively related to national brand proneness. H8d: Quality consciousness is positively related to premium store brand proneness.
2.2.5 Brand loyalty
stores in out-of-stock situations. In general, national brands tend to have more loyal consumers as manufacturers build their brands for decades and are consistent in quality. Extensive product-specific advertising, strict quality controls, and superior extrinsic cue effects have led to strong brand images that appeal to brand-sensitive consumers (Richardson et al., 1994). Therefore, especially in hedonic categories where consumption relies more on experience and extrinsic cues are more heavily used brand loyalty will be relevant. National brands provide a secure alternative and are socially more acceptable (Baltas, 1997). Although store brands are slowly growing in loyalty consumers are in general more connected to national brands (Krishnamurthi and Raj, 1991). Therefore brand loyalty will be positively associated with national brand purchase and negatively with store brand usage. Baltas (1997) found that consumers who merely buy the same brands are less inclined to buy store brands. Further the importance of getting the right brand was negatively related to store brand purchase, while for national brands consumers will consider switching to another retailer. Burton et al. (1998) present similar findings; consumers with a positive attitude towards store brands are less loyal. Moreover, there are indications that consumers consider store brands as a group of similar brands as traditional supermarket chains typically use the same customer proposition for the store brand (Ailawadi et al., 2001; Bonfrer and Chintagunta 2004; Szywanowski and Gijsbrechts, 2012). Information Resources Inc. (1998) also found that national brands as a whole can rely on higher loyalty. Nevertheless, it is interesting to notice that in general brand loyalty among consumers is declining. Survey results show that in 1976, 76 percent of consumers considered themselves to be brand loyal, while in 1993 only 23 percent did (“Battle of the Brands”, 1993). The loyalty to national brands has decreased considerably and gave reasonable opportunities for store brands to gain share from national brands. One can also consider the asymmetry of promotions as a signal of higher loyalty for national brands. When a national brand is on discount it will attract store brand buyers when price level is almost equal. Nevertheless, when store brands are on discount they do not have the ability to attract national brand buyers (Sethuraman, 1996). Further, it is suggested that brand loyal customers are less price sensitive and conversely price conscious consumers are not loyal to a particular brand (Krishnamurthi and Raj, 1991; Garretson et al. 2002). Bonfrer and Chintagunta (2004) argue that store loyal households tend to be less brand loyal. When for example a brand is out-of-stock, these consumers will not switch to another store but just pick another brand available.
H9a: Brand loyalty is negatively to budget, regular, and premium store brand proneness. H9b: Brand loyalty is positively related to national brand proneness.
2.2.6 Variety seeking
relation between variety seeking and store brand usage. Not that surprising as especially the regular store brand is almost equal to the national brand in terms of assortment. The premium store brand offers only a narrow range of specialty products, but it could also be perceived by grocery shoppers as a special variety of the regular store brand. Variety seekers will probably not consider seriously the budget store brand as it offers only standard varieties of a product. Therefore, one can expect consumers who seek variety will be more prone to the regular and premium store brand, while they will not prefer the budget store brand. Dhar and Hoch (1997) confirmed that store brand performance in a category increases when more varieties are offered.
H10a: Variety seeking is negatively related to budget store brand proneness. H10b: Variety seeking is positively related to regular store brand proneness. H10c: Variety seeking is positively related to national brand proneness. H10d: Variety seeking is positively related to premium store brand proneness.
2.2.7 Performance risk
The perceived risk associated with using a product is an important determinant of consumers’ propensity to favorably evaluate and purchase the product (Bettman, 1974; Livesey and Lennon, 1978). Perceived risk arises from consumers’ perceptions about the magnitude of adverse consequences and probabilities that these consequences may occur (Sethuraman and Cole, 1999). In general it is argued that consumers prefer national brands to store brand brands when the level of perceived risk in a specific category is perceived as high (Narasimhan and Wilcox, 1998). The risk of making a mistake is determined largely by the degree of perceived quality variability in a category. Larger variability will create greater uncertainty and subsequently more perceived risk (Batra and Sinha, 2000). More specifically there are several types of risk that affect the decision of consumers to purchase a certain type of brand and are relevant for this research, namely functional or performance, and social risk (Dunn et al., 1986; Semeijn et al., 2004).
Functional or performance risk affects brand choice as consumers might be uncertain about the performance or quality of a product (Bettman, 1974). In utilitarian categories it as about intrinsic functionality and usefulness while in hedonic categories performance consists more of extrinsic functionality like consumption pleasure. Zielke and Dobbelstein (2007) suggest that performance risk is especially relevant in utilitarian categories, like non-food items, where functionality of a product is critical. Nevertheless, Sethuraman and Cole (1999) argue that performance risk is higher in hedonic categories where consumers worry that certain brands cannot deliver the desired emotional benefits. Batra and Sinha (2001) argue that in general perceived risk is more important in categories where subjective quality plays an important role.
Further, perceived risk increases when consumers rely more on extrinsic cues. Performance risk for store brands increases and is reduced for the higher priced national brand and premium store brand when for example price is used as a cue for quality (Sethuraman and Cole, 1999). Price conscious consumers will nevertheless not regard price as an indicator of quality and perceive less performance risk. Therefore it is expected that grocery shoppers who perceive performance risk are less inclined to buy the budget and regular store brand, and more inclined to buy the national brand. For the premium store brand it is uncertain how proneness is affected.
H11a: Performance risk is negatively related to budget store brand proneness. H11b: Performance risk is negatively related to regular store brand proneness. H11c: Performance risk is positively related to national brand proneness.
H11d: There is no straightforward relation between performance risk and premium store brand proneness.
2.2.8 Social risk
As previously mentioned, perceived risk associated with using a product is an important determinant of consumers’ propensity to favorably evaluate and purchase the product (Bettman, 1974; Livesey and Lennon, 1978). Risk is determined largely by the degree of perceived quality variability in a category. Larger variability creates more uncertainty and uncertainty creates more perceived risk (Batra and Sinha, 2000). Social risk is the second type of risk that is relevant in grocery shopping (Dunn et al., 1986; Semeijn et al., 2004).
Batra and Sinha (2001) argue that perceived risk is more important in hedonic categories where objective quality is difficult to measure. Therefore, perceived quality variation is by definition more diffuse. Moreover, each consumer has its own perception about product quality. Therefore, one can perceive risk about judgment of other consumers. Livesey and Lennon (1978) argued that social risk is a factor that affects brand selection. In usage situations with family and friends or in public some consumers avoid serving products that might be perceived as inferior as it may affect image or prestige. Social risk is especially relevant in hedonic product categories where consumption relies more on personal taste. National brands are perceived to have less variability in product quality compared to store brands (Montgomery and Wernerfelt, 1992). National brands provide a secure alternative and are socially more acceptable (Baltas, 1997). Therefore, social risk will have positive impact on national brand proneness. Consumers who perceive social risk are less inclined to buy store brands as others might judge these products to be of inferior quality, they prefer higher-priced brands with a favorable image (Peterson and Wilson, 1985). Further, social risk in a category will increase for consumers who live in an setting where others rely on extrinsic cues. For example, social risk for store brands will increase when others use price as an indicator of quality, while it is reduced for the higher priced national brand and premium store brand (Sethuraman and Cole, 1999). On the other hand, when consumers are price conscious or face serious income constraints they will probably care less about judgment of others and perceive less social risk.
H12a: Social risk is negatively related to the purchase of budget store brands. H12b: Social risk is negatively related to the purchase of regular store brands. H12c: Social risk is positively related to the purchase of national brands.
2.2.9 Extrinsic cue reliance
Cue utilization theory (Cox, 1967; Olson, 1972) suggests consumers employ direct and indirect indicators to judge product quality. Direct indicators or intrinsic cues like ingredients, texture, and taste are physically related to the product. Nevertheless, assessing intrinsic cues is difficult for consumers as they lack sufficient knowledge to judge ingredients. Further it is perceptual and only possible after trying several products in the category. Therefore, consumers often make judgments of product quality on extrinsic cues, which are easier to interpret. Extrinsic cues are not part of the physical product but related attributes like brand name, packaging, and price (Olson, 1972). These cues reflect the image of a product and are important in marketing strategies as consumers make extensive use of extrinsic cues in brand evaluation (Rao and Monroe, 1989). They found effects on product quality evaluation for cues like brand image, packaging, and labeling. Dick et al. (1996) also found that consumers judge intrinsic quality on extrinsic cues such as price level, brand name and advertising. Especially national brands perform well in processing extrinsic cues as they have been building their brands for decades. Extensive product-specific advertising, strict quality controls, and superior extrinsic cue effects have led to strong brand images that appeal to brand-sensitive consumers (Richardson et al., 1994).
contribute to store brand performance in all categories. The reliance on extrinsic cues also affects the perceived risk associated with the use of a product. If a consumer relies relative high on extrinsic cues, the perceived risk associated with the use of a product will be high when a product signals inferior quality or poor image through the extrinsic cues. In that case it can especially have negative effects for the evaluation of the budget store brand. H13a: Extrinsic cue reliance is negatively related to budget store brand proneness.
H13b: There is no straightforward relation between extrinsic cue reliance and regular store brand proneness. H13c: Extrinsic cue reliance is positively related to national brand proneness.
H13d: There is no straightforward relation between extrinsic cue reliance and premium store brand proneness.
2.2.10 Shopping involvement
Shopping involvement is characterized as the extent to which consumers like to go for grocery shopping and like to spend time on grocery shopping. Involved grocery shoppers have a higher shopping frequency and are more likely to visit different grocery store formulas and thus are less loyal towards a particular store (EFMI, 2011). Consumer who are less involved with grocery shopping might have an incentive to shop at one retailer for various reasons. It might be that they value the convenience of one-stop shopping, or it is simply the nearest retailer. Consumers can also value various aspects of the retailer such as assortment, price setting and service. EFMI (2011) for example indicated that low involved grocery shoppers are more likely to visit full-service supermarkets. Albert Heijn is a clear example of a full-service supermarket. Their store brands can potentially benefit from these low involved but potential store loyal consumers as they have trust in their store and become familiar with the store brands which results in favorable attitudes (Dick et al., 1995; Richardson et al., 1996; Baltas and Argouslidis). Baltas (2001) confirmed that store loyalty is positively related to a higher probability of purchasing store brands as the number of stores visited is negatively related to store brand proneness. What also facilitates purchase of store brands is the ability to buy a single brand across a wide range of product categories (Baltas and Doyle, 1998; Steenkamp and Dekimpe, 1997). Therefore, it is expected that shopping involvement is negatively related to store brand proneness. The premium store brand is somewhat different when it comes to shopping involvement. Consumers who like to spend time on finding specific products are probably more inclined to buy the premium store brand as it offers special varieties. Nevertheless, during periods like Christmas and Easter, when the assortment of AH Excellent is largely increased one could imagine that it also attracts low-involved grocery shoppers. For example, consumers who like to serve special products but have no time or requirement to buy products and ingredients in various specialty stores. Therefore it is uncertain what impact shopping involvement will have on premium store brand proneness. Finally, shopping involvement will be positively related to the national brand. More shopping involvement results in less store loyalty as consumers like to visit multiple stores and especially for grocery shopping it is relative easy to buy national brands elsewhere if it is out-of-stock, lower priced, or on discount.
H14a: Shopping involvement is negatively related to budget store brand proneness. H14b: Shopping involvement is negatively related to regular store brand proneness. H14c: Shopping involvement is positively related to national brand proneness.
2.2.11 Category involvement
Familiarity with various products in a category consists of brand knowledge, product knowledge and the ability to judge criteria that are needed to evaluate products and increases when consumers shop more frequently in the category (Howard and Sheth, 1969). Subsequently, the reliance on extrinsic cues such as price, brand name and packaging will decrease as the consumer will be able to assess quality across a greater range of cues, especially intrinsic cues (Raju, 1977). When consumers are more familiar with a product category they are more confident about performance when considering different brands. Therefore it is expected that especially regular store brands, which rely more on intrinsic cues, will be more preferred as consumers get more familiar with the category and therefore are more inclined to perceive it as a reasonably priced alternative.
Baltas (2001) found that shopping frequency in the category is positively related to store brand proneness as consumers get more expertise, rely less on simple heuristics and perceived risk is reduced. These consumers might also be more inclined to choose the premium store brand if it offers higher intrinsic quality. The budget store brand will suffer from increased involvement as consumers can recognize lower intrinsic quality as it merely focuses on offering a low price. Baltas (1997) found that consumers who shop more frequently in the category and tried several brands indeed are more likely to purchase store brands. Nevertheless, one must also consider intrinsic quality of national brands as they can still be preferred when perceived quality differences are high. When shopping frequency is low consumers are more willing to pay price premiums and therefore also often buy the national brand (Sethuraman and Cole, 1999). When category involvement increases, consumers get more information about the composition of the market and are less willing to pay higher prices for manufacturer brands (Wolinsky, 1987). Rao and Monroe (1988) found that brand familiarity affects price perceptions and consumers’ willingness to pay for brands. Consumers are more certain about the quality level of brands when familiarity with the category is high. A major consequence of familiarity is that perceived risk will be reduced. H15a: Category involvement is negatively related to budget store brand proneness.
H15b: Category involvement is positively related to regular store brand proneness. H15c: Category involvement is positively related to national brand proneness. H15d: Category involvement is positively related to premium store brand proneness.
2.2.12 Perceived quality variation
reason to buy store brands than price (67 percent). Hoch and Banerji (1993) also highlight the quality of store brands as they found that product quality has a significant effect on store brand market share while the level of price discount did not. It seems that quality seems to be more important in determining the success of store brands, while intuitively one would mention the price differential (Sethuraman, 1992; Hoch and Banerji, 1993). Therefore it is reasonable to assume that regular store brands moved towards national brands in terms of quality, but there still may be some differences in perceived quality as the market share of store brands is highly uneven across categories and perceived quality has impact on the willingness to buy store brands (Veloutsou et al., 2004). For the budget store brand it is expected that many consumers perceive it as inferior. For the premium store brand it is uncertain as it is relative unknown. Probably it is perceived better than the regular store brand but not by definition better than national brands. The extent to which consumers perceive differences in quality depends on the knowledge and involvement with the category (Miquel et al., 2002). When familiarity with the category is low consumers rely more on extrinsic cues and perceived quality variation is higher. In general store brands perform better when perceived quality variation in a category is low (Hoch and Banerji, 1993).
H16a: Perceived quality variation is negatively related to budget store brand proneness. H16b: Perceived quality variation is negatively related to regular store brand proneness. H16c: Perceived quality variation is positively related to national brand proneness. H16d: Perceived quality variation is positively related to premium store brand proneness.
To summarize this literature review an overview of hypothesized relationships is presented in figure 2.2. It describes how all variables contribute to the proneness of various brands. The next chapter presents the research method in order to describe how the conceptual model will be applied and tested.
Dependent variable
Independent variables Budget Store
Brand Proneness Regular Store Brand Proneness National Brand Proneness Premium Store Brand Proneness Socio Demographics Age H1a: - H1b: + H1c: +/- H1d: -
Household Size H2a: + H2b: + H2c: - H2d: - Education Level H3a: - H3b: + H3c: +/- H3d: +/- Income Level H4a: - H4b: +/- H4c: + H4d: +
Consumer Psychographics
Income Constraints H5a: + H5b: + H5c: - H5d: - Price Consciousness H6a: + H6b: + H6c: - H6d: - Promotion Sensitivity H7a: +/- H7a: +/- H7b: + H7a: +/- Quality Consciousness H8a: - H8b: + H8c: + H8d: + Brand Loyalty H9a: - H9a: - H9b: + H9a: - Variety Seeking H10a: - H10b: + H10c: + H10d: + Performance Risk H11a: - H11b: - H11c: + H11d: +/- Social Risk H12a: - H12b: - H12c: + H12d: +/- Extrinsic Cue Reliance H13a: - H13b: +/- H13c: + H13d: +/- Shopping Involvement H14a: - H14b: - H14c: + H14d: +/-
Product Attributes
Category Involvement H15a: - H15b: + H15c: + H15d: + Perceived Quality Variation H16a: - H16b: - H16c: + H16d: +
Chapter 3: Research Methodology
Research designs are broadly classified in exploratory and conclusive research (Malhotra, 2004). In the first two chapters results of exploratory research were presented. The primary objective was to gain insights in the research problem by studying existing literature, previous studies, and market information. Relevant findings were presented and this chapter presents the approach for conclusive research in order to quantify hypotheses and examine relationships of the conceptual model. Quantitative data will be gathered through a field investigation in the Netherlands in a so called sample survey design or single cross-sectional design. Only one sample of respondents is drawn from the target population and information is obtained from this sample only once (Malhotra et al., 2004). A cross-sectional design is preferred as an important objective of this research is to obtain a sample which is representative for the Dutch grocery shopper population.
3.1 Survey method
The survey method involves a structured questionnaire given to respondents and designed to elicit specific information (Malhotra et al., 2004). Respondents will be asked about a variety of questions regarding their buying behavior, intentions, and attitudes regarding consumer psychographics and product specific attributes, and socio demographic characteristics. There is chosen for a structured data collection with fixed-alternative questions. Structured data collection refers to the degree of standardization imposed in the process and implies that a formal questionnaire will be prepared and questions are asked in a prearranged order (Malhotra et al., 2004). Further, fixed-alternative questions imply that respondents have to select from a pre-determined set of responses. According to Malhotra et al. (2004) this survey method has several advantages. First, the questionnaire is simple to administer. Second, the obtained data is reliable as responses are limited to a fixed number of alternatives which implies less variability in the results. Finally, coding, analysis, and interpretation of data will be relative simple. Although there are some disadvantages like respondents unable or unwilling to provide the desired information, this approach is by far the most common method of collecting primary quantitative data in marketing research (Malhotra et al., 2004).
3.1.1 Mode of administration
3.1.2 Sample design
The sample is a subgroup of a population and selected to participate in this research. A first important step in designing the sample is to define the target population (Malhotra et al., 2004). The target population is the collection of elements or objects that possess the information sought by the researcher and about which inferences are to be made. In this research the target population consists of grocery shoppers in the Netherlands who are responsible for grocery shopping and regularly shop at Albert Heijn. In order to get a representative sample for this research a panel named Thesistools is used as a sampling frame.
Obviously, a panel has some disadvantages (Malhotra et al., 2004). First, there is some refusal to cooperate. If panel members receive too much invitations for questionnaires they reach a point at which they do not want to be bothered anymore. Second, a panel contains a reasonable amount of mortality; respondents who became member of a panel and after a while lose interest. Finally, in many panels respondents receive an incentive for participation which possibly results in response bias. Nevertheless, in this case cooperation is not rewarded, either in the panel or in this specific research. Therefore, only intrinsically motivated subjects will cooperate. Moreover, a major advantage of using a panel is that in a relative short period a large sample can be drawn (for sample size see paragraph 3.5). Panel members are more willing to cooperate and it undermines the potential low response as a downside of the Internet. Furthermore, it gives possibilities for more sophisticated sampling techniques in order to get a representative sample. In this research the stratified sampling technique will be applied. In stratified sampling the population is partitioned into subpopulations, or strata (Malhotra et al., 2004). It is important that the strata are mutually exclusive and collectively exhaustive in that every population element should be assigned to one stratum and no population elements should be omitted. A commonly used method of stratification is by socio demographic variables (Malhotra et al., 2004). For this research the sample is stratified on education level. The questionnaire will be send to random bunches of low, medium, and highly educated panel members. Rationale behind education level is that it is one of the variables of interest in the conceptual model. Second, education level is sometimes used as a surrogate for income level, which is an important variable in the conceptual model. Finally, the Dutch grocery shopping population is very diverse (see chapter 4 for more details) and there is chosen to weight the sample afterwards on age, gender, and household size when necessary.
3.2 Measurement and scaling
In order to get useful information for the conceptual model it is necessary that subjects have reasonable knowledge or at least awareness about various store brands of Albert Heijn. Therefore, the questionnaire started with two selection questionsin order to determine if respondents are responsible for grocery shopping and if they frequently shop at Albert Heijn (see Appendix B for the questionnaire). With two discrete (yes/no) questions it was possible to select only subjects who are potentially involved with Albert Heijn. These subjects have at least a probability to know the variety of brands and should be able to create perceptions. The selection questions are followed by introductory questions that give insights about shopping behavior at Albert Heijn.
indicate a degree of agreement or disagreement with statements belonging to the stimulus objects (Malhotra et al., 2004). Each scale item has five responses varying from strong disagreement to strong agreement. In this case all items relate to specific constructs. The Likert scale is typically used to measure this kind of attitudes and is also feasibly to conduct summated scales (see also paragraph 3.3). Further it is important to notice that all item questions were randomly ordered in the questionnaire to assure response validity. Placing item questions together could create awareness of respondents and negatively affect response behavior.
The third part contains product specific questions. For this research various fast moving consumer goods are included. Obviously, not all respondents will buy all specific products and questions about brand proneness on general brand level is too superficial. The budget and premium store brand are for example in less categories available than the other brand types. Furthermore, one of the research areas is whether brand proneness is consistent across product categories or whether one should differentiate between product categories. Although these questions involve several brands and products, the questionnaire involves noncomparative scales. In noncomparative scales, also referred to as monadic or metric scales, each object is scaled independently of the others in the stimulus set (Malhotra et al., 2004). In practice, for each brand in a product category respondents are asked to evaluate their buying behavior. Furthermore, they have to evaluate perceived quality. The approach for the construct of category involvement is comparable to the method used in the consumer psychographics. For the intended buying behavior a five point scale is used that varies from almost never to almost always. It indicates the probability that a consumer will buy a specific brand type. Brand proneness is widely used in most survey-type studies about consumer behavior towards store brands (Sethuraman and Cole, 1999; Manzur et al., 2011). Perceived quality is asked for each specific brand on a seven point scale varying from extremely bad to extremely well.
The final part of the questionnaire contains standard questions related to socio-demographic characteristics. Characteristics like age and household size are measured by open end questions. For education level, a diversification according to the Dutch system is used while for income level categories were created that fit around the modal income in the Netherlands1.
3.3 Summated scales
In this research there are various theoretical constructs with underlying items. These items were included in the questionnaire and together they form constructs. Rationale is that respondents react to some extent consistent on the items. When respondents for example indicate to pay much attention to prices in shopping then one could expect that price is also an important decision factor in choosing a brand. According to Spector (1992) a summated scale is identified by four characteristics. First, the scale contains multiple items. It is a concept in which several individual variables are combined into a composite measure. Second, individual items have to measure something with an underlying quantitative measurement continuum. It has to measure a property of something that can vary quantitatively rather than qualitatively and each item in a scale is a statement on which respondents have to give rating about (for example a Likert scale).
