2
3 Management summary
Nowadays many hard discounters sell national brands in their assortments. Manufacturers have some reasons to sell their products at hard discounters. One of the main reasons is that private labels grow and manufacturers of national brands are losing share to them, which make private labels the most threatening competitor of national brands (Steiner, 2004). Hard discounters have also many reasons to expand their assortment with attractive national brands. One of the main reasons is that they want to differentiate themselves from other hard discounters and build a stronger and more sustainable relationship with their consumers (Deleersnyder, Dekimpe, Steenkamp & Koll, 2007). Based on these changes in the hard discounters, this research will be focussing on the national brands at hard discounters. To be more specific, this research will be focussing on the store preference of consumers for hard discounters or service supermarkets and the influence of store preference on the willingness to pay for national brands at hard discounters. Therefore the research question of this paper is:
What is the effect of store preference on the willingness to pay for national brands in hard discounters, to what extent is this moderated by brand loyalty for national brands and what
effect do store characteristics have on the strength of store preference?
This research will help hard discounters and manufacturers of national brands to provide insights into the influencers of the willingness to pay for national brands in hard discounters and the influencers of store preference. The main research method in this research is a choice-based conjoint with two categories, namely the cola and detergent category. These two categories are chosen, because of their presence in hard discounters and service supermarkets. A segmentation analysis showed that the cola category could be splitted up into 4-classes and this is also the case for the detergent category. After the segmentation analysis a linear regression is conducted. The linear regression shows that the importance of atmosphere, the friendliness of salespeople, location, assortment and quality of merchandise have a significant negative effect on the store preference for hard discounters. Only price has a significant positive effect on the store preference for hard discounters. The results show opposite effects for the store preference for service supermarkets. Promotions and the parking facilities don’t have any significant effect on the store preference for hard discounters and service supermarkets. Insights in the data also have identified that the store preference for hard discounters (service supermarkets) have a positive (negative) effect on the willingness to pay for three out of the four national brands (Coca-Cola, Pepsi, Dubro) in a hard discounter.
The importance of price significantly influences the willingness to pay for Dreft and Dubro in
a hard discounter and the moderator brand loyalty has an influence on the relationship
between store preference for hard discounters and service supermarkets and the willingness
to pay for Pepsi, Dreft and Dubro. The willingness to pay for national brands in hard
discounters can be increased (or decreased) by increasing (decreasing) the store preference
for hard discounters, decreasing (increasing) the importance of price and increase (decrease)
brand loyalty for national brands. Hard discounters and manufacturers of national brands
have to be aware that the willingness to pay for national brands and the strength of the
influencers differs per brand and category.
4 Preface
This research is written during the last semester of my Master Marketing Intelligence and Marketing Management at the University of Groningen. Sometimes other students state that writing a master thesis can be experienced as very tough, but as a student you also gain experience in doing a research on your own. I am satisfied with the end result and I can admit that writing a master thesis is an experience. This process goes with ups and downs, also in combination with following classes at the University of Groningen. I want to thank my supervisor Erjen van Nierop and my fellow group members of our thesis group Bram van Santbrink and Ilse Outersterp for their support during this master thesis. I also want to use this opportunity to thank my family and friends for their support during this master thesis route.
I hope you will enjoy reading my master thesis.
Cecile Steunebrink
5
Table of Contents
Management summary 3
Preface 4
1. Introduction 7
2. Literature review 9
2.2 Store preference and store characteristics 9
2.2.1 Price 9
2.2.2 Promotions 10
2.2.3 Assortment 10
2.2.4 Quality of merchandise 11
2.2.5 Atmosphere 12
2.2.6 Store location and parking facilities 13
2.2.7 Friendliness of salespeople 14
2.3 Willingness to pay 15
2.4 Brand loyalty 16
2.5 Conceptual model 17
3. Methodology 18
3.1 Research Method 18
3.2 Data collection 18
3.2.1 Choice-based conjoint 18
3.2.2 Store characteristics 19
3.2.3 Brand loyalty 19
3.2.4 Additional questions 20
3.3 Plan of analysis 21
4. Results 22
4.1 Sample 22
4.1.1 Factor analysis and reliability analysis 22
4.2 Data exploration 23
4.3 Choice-based conjoints 26
4.3.1 Model fit 26
4.3.2 Model estimation 27
4.4 Segmentation analysis 28
4.4.1 Model fit 29
4.4.2 Estimates per class 30
4.4.3 Segments cola category 34
4.4.4 Segments detergent category 35
6 4.5 Influencers of store preference and the willingness to pay 36
4.5.1 Regression analysis store preference 36
4.5.2 Regression analysis willingness to pay 38
5. Conclusions and recommendations 44
5.1 Conclusion and discussion 44
5.2 Contribution and implications 46
5.3 Limitations and directions for further research 46
6. References 47
Appendix A - Covariates cola and detergent category 56
Appendix B - Estimates Dreft and Dubro price 3 models 59
7 1. Introduction
Hard discounters can be classified as supermarkets that sell only private label or store brands.
These are brands that are generally owned, controlled and sold exclusively by retailers (Sethuraman & Cole, 1999). Nowadays, many hard discounters have added national brands to their assortment. For example Aldi, this hard discounter offers products from brands like Calve, Dove, Axe and Unox (Levensmiddelenkrant, 2016). Hard discounters have many reasons to expand their assortment with attractive national brands. The first reason is that they want to differentiate themselves from other hard discounters and to build a stronger and more sustainable relationship with their consumers (Deleersnyder, Dekimpe, Steenkamp &
Koll, 2007). The second reason is that hard discounters also want to move beyond a pure price-based competition (Deleersnyder et al., 2007). The third reason is that national brands are known as major traffic builders (Ailawadi & Harlam, 2004). Research of Deleersnyder et al., (2007) indicates that when hard discounters added 400 national brands at six major discount chains in three countries, almost 24% of all the branded goods in the sample were considered successful for both partners (hard discounter and manufacturer) and therefore can create a win-win situation.
Service supermarkets as Albert Heijn and Jumbo also sell a combination of national brands and private labels, but there are many differences between service supermarkets and hard discounters. The first point of difference is that hard discounters offer fewer categories of goods and stock only a limited selection of items compared to service supermarkets. The second point of difference is that hard discounters offer a few or sometimes even no national brands. This is a contrast with service supermarkets, because service supermarkets typically offer a lot national brands in their store. The third point of difference is that hard discounter stores are relatively small in comparison to service supermarkets and offer few services to consumers (Cleeren, Verboven, Dekimpe & Gielens, 2010). The fourth point of difference is that hard discounters distinguish themselves from more traditional retailers as service supermarkets by their focus on very competitive prices (Aggarwal, 2003). The fifth point of difference is that hard discounters often have limited promotional and merchandising activity and less new product efforts than service supermarkets (M+M Planet Retail, 2005).
As earlier indicated many national brands are nowadays being sold in hard discounter stores. Manufacturers also have some reasons to sell their products at hard discounters.
Primarily manufacturers are interested in the performance of their own brand in comparison to competitor brands at a store (Blattberg & Wisniewski, 1989). When the brands are on the shelves, they compete for consumers’ money and attention and try to convince consumers to select their brand (Deleersnyder et al., 2007). Manufacturers are developing stronger trade relations with hard discounters; because this allows them to benefit from the rapidly growing market position of hard discounters, and thereby the possibility to slow down overall private label growth (Deleersnyder et al., 2007). Through this private label growth manufacturers are losing share to them, which make them the most threatening competitor of national brands (Steiner, 2004).
Based on the changes at the hard discounters, this research will be mainly focussed on
national brands in the hard discounter. To be more specific, this research will be focussing on
the influencers of the store preference of consumers for hard discounters or service
supermarkets and influencers of the willingness to pay for national brands in hard
discounters. Many researchers have indicated that store preference is influenced by a few
factors, among other things Bearden (1977) state that price, assortment, quality of
merchandise, store ambience, store location, parking facilities and salespersons’ service
8 quality influences store preference. Lindquist (1974) also states that promotions can influence the store preference of consumers. It is possible that when consumers prefer one store over another (or not), this influences the willingness to pay for national brands at hard discounters.
Therefore the research question of this paper is:
What is the effect of store preference on the willingness to pay for national brands in hard discounters, to what extent is this moderated by brand loyalty for national brands and what
effect do store characteristics have on the strength of store preference?
Many researchers have conducted research towards willingness to pay and store preference, mainly between national brands and private labels (Van Heerde & Geyskens, 2010; Kumar &
Steenkamp, 2007; Sethuraman & Cole, 1999; Soberman & Parker, 2006). For example Steenkamp, Van Heerde & Geyskens (2010) already did some research towards the willingness to pay for consumers, but they were focussing on the understanding of what drives consumers to pay a price premium for national brands over private labels. They did not take into account the type of supermarkets (hard discounters and service supermarkets) and the effect of store preference on the willingness to pay for national brands. Bearden (1977) did research to the drivers of store preference, but did not make the distinction between hard discounters and service supermarkets. Thus the combination between store preference and the willingness to pay for national brands in hard discounters is never researched. Therefore this research can provide an insight into the research gap of store preference towards hard discounters and service supermarkets and the willingness to pay for national brands in hard discounters.
This research will help hard discounters and manufacturers of national brands to provide
insights into the influencers of willingness to pay for national brands in hard discounters and
the influencers of store preference. In the next chapters, the theoretical framework for the
willingness to pay, store preference and brand loyalty will be presented. After that, the
research design, results and conclusions/recommendations will be proposed.
9 2. Literature review
The main theme of this research is to investigate the effect of consumer’s brand preference on the willingness to pay for national brands at hard discounters. Furthermore, the moderating role of brand loyalty towards national brands on this relationship is examined. Besides that, store characteristics as price, promotions, assortment, quality of merchandise, atmosphere, store location, parking facilities and friendliness of salespeople can influence the strength of the store preference for hard discounters and service supermarkets and are also taken into account in this research. This literature review will investigate the constructs that are related towards the topic, namely willingness to pay, store preference (including the variables as price, promotion, assortment, quality of merchandise, atmosphere, store location, parking facilities and friendliness of salespeople) and brand loyalty. Also the related hypotheses will be presented. In the last part of the literature review, the conceptual model is presented.
2.2 Store preference and store characteristics
In contrast to store choice, there isn’t conducted a lot of research towards store preference.
Bhukya & Singh (2016) classify store preference as the shoppers’ brand preference towards choosing retail stores. They also found some variables that influence store preference, namely store ambience, store location, store layout, parking facilities and salespersons’ service quality (Bhukya & Singh, 2016). Kumar & Narayana (2016) did also research into store preference and they found that (besides the variables that Bhukya & Singh (2016) found) price, quality of merchandise and assortment also influences the store preference of consumers. This is also investigated by research of Bearden (1977) and by research of Lindquist (1974). Lindquist (1974) also states that promotions can influence the store preference of consumers. All these factors together are called store characteristics and these possibly influence store preference for service supermarkets and hard discounters. The characteristics will be explained per factor.
2.2.1 Price
Knowledge about prices is for consumers an important source when they choose a retail store
(Rhee & Bell, 2002). By choosing a store, consumers use their knowledge about the price
distribution of the retailers, the attractiveness of store promotions and to adjust their expenses
according to that store visit (Rondán Cataluña, García & Phau, 2006). Nowadays, retailers
make use of two price formats, namely the High and Low Pricing (HiLo) format or the Every
Day Low Prices (EDLP) format (Ailawadi & Keller, 2004). When the retailer uses an EDLP
format, they use low prices for their products every time period and they avoid price
promotions. With this strategy they target consumers who are not willing to spend time or
effort to find the best prices. On the other hand, when a retailer uses a HiLo format, the
retailer uses frequent promotional prices to attract consumers who are searching for attractive
prices for individual products. Besides that, the products have higher prices than in EDLP
stores (Ghose, Bhatnager & Kurata, 2005; Olbrich, Jansen & Hundt, 2017). Research of
Galata, Bucklin & Hanssens (1999) have shown that consumers who change their store,
switch towards the same type of retailer. This means that they do not switch towards another
format. Therefore consumers are certain loyal towards a retailer’s pricing format. Hard
discounters often use a price-aggressive format, therefore hard discounters make use of the
EDLP format and service supermarkets make use of the HiLo format (Cleeren, Verboven,
Dekimpe & Gielens, 2010). Above all, hard discounters differentiate themselves from service
supermarkets by focussing on very competitive pricing (Aggarwal, 2003). Therefore the
10 following hypothesis was proposed:
H1: Consumers who perceive price as less important prefer service supermarkets and consumers who perceive price as important prefer hard discounters.
2.2.2 Promotions
The dictionary describes promotion as advertising and the act to promote. Blattberg, Briesch
& Fox (1995) state that promotions include advertising funds, display allowances, display- and feature advertising and the best-known price promotions. Blattberg & Neslin (1990) identify price promotions as: ‘temporary price discounts offered to a customer’. This research only takes price promotions into account, due to the space limitation. Many retailers take price promotions into account, because they are an important element to distinguish you as a retailer from competitors (Ma & Fildes, 2017). Promotions also often result in an increase of sales of the items that are exposed to price promotions. However, this doesn’t always mean that a price promotion is always advantageous for retailers (Leeflang, Van Heerde & Wittink, 2002). As described in paragraph 2.2.1, hard discounters make use of a Everyday Low Price strategy and service supermarkets make use of a High and Low Pricing strategy (Ailawadi &
Keller, 2004). This means that hard discounters don’t make use of price promotions and service supermarkets do. Therefore the following hypothesis was proposed:
H2: Consumers who perceive price promotions as important prefer service supermarkets and consumers who perceive price promotions as less important prefer hard discounters.
2.2.3 Assortment
Levy & Weitz (1995) define assortment as: ‘The number of different items in a merchandise category’. Other research of Briesch, Chintagunta & Fox (2009) have found that the number of brands, the stock-keeping units per brand, size per brand, proportion of unique stock- keeping units and the presence of the household’s favorite brands in the assortment influence store choice significantly. They also have found that when a store assortment contains more households’ favorite brands, the average household will choose this store. The other way around, retailers which offer fewer stock-keeping units per brand, fewer sizes per brand and fewer unique items also increase their opportunity to be preferred (Briesch, Chintagunta &
Fox, 2009). Other research agreed with that and suggested that a retail store only have to add a stock-keeping unit if it is meaningful to the assortment (Briesch, Chintagunta & Fox, 2009;
Hoch, Bradlow & Wansink, 1999; Sloot, Fok & Verhoef, 2006). When a store has a wide selection of products, consumers can minimize the perceived costs, it covers effort and travel time (Pan & Zinkhan, 2006). In the long term, Fox, Montgomery & Lodish (2004) indicates that the assortment size positively affects the probability that consumers will stay with the store they prefer.
On the other hand, Iyengar & Lepper (2000) have indicated that too much choice
leads to lower purchase intentions and lower choice satisfaction. This means that more choice
isn’t always better. Broniarczyk, Hoyer and McAlister (1998) also have found that less
choice can work, they state that consumers choice is affected by the perception of variety
among a selection, which depends on more than only the number of different products on the
shelves (Boatwright & Nunes, 2001). The consumer’s perception of variety can be influenced
by the space dedicated to a category, the presence/absence of the consumers’ favorite item,
the setting of the assortment, the repetition of items and the amount of admissible alternatives
11 (Boatwright & Nunes, 2001; Broniarczyk, Hoyer and McAlister, 1998; Hoch, Bradlow, Wansink, 1999; Kahn & Lehmann, 1991). In summary, it has been shown from this review that reducing the stock-keeping units will not harm the sales.
Hard discounters can be characterized by selling mainly private labels. Nowadays, many hard discounters have introduced national brands to their assortment as a strategy to differentiate themselves from other discounters and to build a stronger and more sustainable customer relations, and therefore moving beyond a pure price-based competition (Deleersnyder, Dekimpe, Steenkamp & Koll, 2007). Besides adding national brands to the assortment of hard discounters, another main difference between the assortments of hard discounters and service supermarkets is that hard discounters offer fewer categories of goods and stock only a limited selection of items. Service supermarkets offer more than 15.000 stock-keeping units and hard discounters less than 1400 stock-keeping units. Therefore the following hypothesis was proposed:
H3: Consumers who perceive assortment as important prefer service supermarkets and consumers who perceive assortment as less important prefer hard discounters.
2.2.4 Quality of merchandise
Quality can be explained as a form of overall evaluation of a product, similar in many ways to attitude (Olshavsky, 1985; Parasuraman, Zeithaml & Berry, 1988). However, Holbrook &
Corfman (1985) suggest that quality performs as a relatively general value judgment (Parasuraman, Zeithaml & Berry, 1988).
Several researchers have shown that there is a difference between objective and perceived quality (Jacoby & Olson, 1985; Zeithaml, 1988). First, objective quality refers to measurable and verifiable superiority on some predetermined standards (Curry & Faulds, 1986; Zeithaml, 1988). Other research indicates that objective quality not really exist, that all evaluations about quality are subjective (Maynes, 1976). Second, perceived quality refers to consumer’s judgment about superiority or excellence of a product (Garvin, 1983; Zeithaml, 1988). The evaluations of the quality of merchandise often takes place in a comparison context, namely in a consideration set (Maynes, 1976). This means that the quality of a product is evaluated as high or low based on other products or services. Consumers view the other products or services as substitutes (Zeithaml, 1988). Besides that, attributes that indicate quality can be separated into intrinsic and extrinsic cues. Intrinsic cues concern the physical construction of the product. This includes attributes as flavor, color, texture and the degree of sweetness of the product. Extrinsic cues are attributes that are related to the product, but not related towards the physical product. This includes attributes as the price, brand name and level of advertising of the product (Olson & Jacoby, 1972; Olson, 1977; Zeithaml, 1988).
Research indicated that the design of a retail store assists as a basis for consumers to evaluate the quality of merchandise (Baker, Parasuraman, Grewal & Voss, 2002; Kotler, 1973; Olshavsky, 1985). For example, Mazursky & Jacoby (1968) state that the interior of a store is evaluated as more important than price by evaluating the quality of merchandise. The shopping environment of hard discounters can be characterized as very functional and with fewer services. This means that hard discounters have bare walls and the products are not put in shelves, but placed in boxes on pallets (Cleeren, Verboven, Dekimpe & Gielens, 2010).
In contrast to hard discounters, at service supermarkets products are placed in the shelves.
That is why can be concluded that the shopping environment of service supermarkets is more
focussed on service than the shopping environment of hard discounters. Therefore the
following hypothesis was proposed:
12 H4: Consumers who perceive quality of merchandise as important prefer service supermarkets and consumers who perceive quality of merchandise as less important prefer
hard discounters.
2.2.5 Atmosphere
Kotler (1973) state that there may be more towards the customer experience than only the product or service. According to Kotler (1973) atmosphere or the physical environment may possibly influence the purchase decision. This is also confirmed through Puccinelli, Goodstein, Grewal, Price, Raghubir & Steward (2009), they state that managers have to go beyond a product focus towards a customer experience, because competition in retail is intensified. Therefore to appeal consumers both on rational and emotional levels, products and settings in store are designed in a more appealed way (Spence, Puccinelli, Grewal &
Roggeveen, 2014; Spinney, 2013). A meta-analysis of Brady and Cronin (2001) has shown that there are three factors that influence the perceived quality of the physical environment and therefore influence the store choice, namely ambient conditions, facility design and social factors. The first factor, ambient factors include non-visual aspects, such as temperature, scent and music. The second factor, facility design include either functional or aesthetic aspects, such as clean and visually pleasing and the third factor, social conditions include the number, type of people and the behavior within the service setting (Barber &
Scarcelli, 2010; Raajpoot, 2002). The physical environment is very influential in communicating the firm’s image and purpose towards the customers and therefore influences customers’ satisfaction towards the store (Bitner, 1992; Harrell, Hutt & Anderson, 1980).
Towards the physical environment, research indicated that there are different cues in stores that influence consumers. The first cue is visual atmospheric, visual atmospherics as color and brightness of a space can affect the level of stimulation, mood and emotional state of consumers in that space and therefore have a positive effect on shopping behavior (Evans, 2002; Lehrl, Gerstmeyer, Jacob, Frieling, Henkel, Meyrer & Bleich, 2007; Spence et al., 2014). Summers and Herbert (2001) found out that installing 500W lighting in the ceiling or above a display, shoppers touches more items and spent more time to inspect a display with brighter lighting (Spence et al., 2014). Besides that, Bellizzi & Hite (1992) investigated that consumers prefer blue over red, because blue turned out to be more relaxed and therefore consumers spend more time browsing in store and it promotes purchase intentions. Service supermarkets are characterized by having more cozy light than hard discounters. Bright light in the store characterizes hard discounters as Aldi.
The second cue is auditory atmospheric, for example music belongs to auditory atmospheric. Research suggests that consumers prefer background music more than silence (Linsen, 1975). In addition to that, Garlin & Owen (2006) have found that the presence of music has a positive effect on shopper patronage behavior. This was especially the case when the music was familiar and liked by consumers (Garlin & Owen, 2006; Spence et al., 2014).
Music in retail stores can even create an emotional bond with consumers and therefore can
result in more spending (Areni & Kim, 1993; Morrison & Beverland, 2003). Hard
discounters are characterized by their ‘no-thrills’ store design (Wortmann, 2004). Therefore
they don’t play music in their stores. Service supermarkets often play music in store. They
play music that is also played by radio stations. The third cue is tactile atmospheric, tactile
atmospherics are described by Kotler (1974) as: ‘Sensory-discriminative qualities of softness,
smoothness and temperature’. This implies that for example consumers are more likely to
purchase and more willing to pay for products when they can touch it or pick it up of the
13 shelves (Grohmann, Spangenberg & Sprott, 2007; Peck & Childers, 2006; Spence et al., 2014). Thereby, consumers like to buy products they can touch in store. In both service supermarkets and hard discounters, consumers can pick the products of the shelves by themselves. Wortmann (2004) state that hard discounters can keep their prices low, because they don’t have decorations in store, the counters and shelves are kept very simple and products are displayed very clear for customers. The fourth cue is the taste atmospheric.
Many retailers have put tasting station in their stores, but there isn’t conducted a lot of research towards it. A research that is executed states that consumers prefer the last option when two desirable products are being tasted (Biswas, Grewal & Roggeveen, 2010; Spence et al., 2014). Hard discounters don’t have products to taste in their stores. In many cases, service supermarkets have.
Overall, Bitner (1992) states that store atmosphere has a strong impact on consumers’
perception of the experience. Even before doing a purchase, consumers are looking for cues, the environment of a retail store contains many of those cues. Those cues provide the consumer with information about the capabilities of the firm, the quality and communicate the image of the firm towards the consumers (Bitner, 1992; Rapoport, 1982; Shostack, 1977).
In summary, it has been shown from this review that the environment of a retail store influences the customer satisfaction with the service (Bitner, 1992; Harrell, Hutt & Anderson, 1980). Spangenberg, Crowley & Henderson (1996) state that the attitude towards store environment is more important for the store choice than the attitude towards the quality of merchandise. Therefore the following hypotheses are proposed:
H5: Consumers who perceive atmosphere as important prefer service supermarkets and consumers who perceive atmosphere as less important prefer hard discounters.
2.2.6 Store location and parking facilities
Store location and parking facilities can be covered under store convenience. Convenience can be seen as one of the most important factors of store choice (Eastlick & Feinberg, 1999).
Store convenience can be described as: ‘The key benefit that shoppers seek in the modern environment’ (Pan & Zinkhan, 2006). Research of Berry, Seiders & Grewal (2002) state that consumers’ perception of store convenience has a positive influence on the customer satisfaction (Pan & Zinkhan, 2006). In addition, consumers’ perceived expenditures of time and effort influence their store convenience. This means that stores that are located very central reduce the transaction costs of time and effort (Berry, Seiders & Grewal, 2002; Pan &
Zinkhan, 2006). Other research of Craig, Ghosh & McLafferty (1984) have indicated that retail stores with a larger assortment attract customers from greater distances than retail stores which offer fewer goods and services. This is also investigated by Bellenger, Robertson &
Greenberg (1977) which state that store choice (and therefore store preference) have a high correlation with accessibility. This means that service supermarkets attract customers from greater distances with their extensive assortment than discounters, which have a less extensive assortment.
In addition to convenient locations, retailers also try to attract people with longer
operating hours and ample parking (Hansen & Deutscher, 1978). Research of Ok Kim & Jin
(2001) have indicated that extensive parking facilities of retail stores can be seen as a
competitive advantage towards consumers and this helps to provide a good shopping
experience for shoppers (Bhukya & Singh, 2016). Service supermarkets attract customers
from greater distance due to their extensive assortment. Customers travel large distances
often by car and therefore can be assumed that service supermarkets have more extensive
14 parking facilities than hard discounters.
Based on the research of Graig, Gosh & McLafferty (1984) can be concluded that consumers are willing to travel more towards service supermarkets than towards hard discounters, because the assortment of service supermarkets contains a lot more stock- keeping units than the assortment of hard discounters. Therefore the following hypotheses are proposed:
H6: Consumers who perceive the location of the supermarket as less important prefer service supermarkets and consumers who perceive the location of the supermarket as important
prefer hard discounters.
H7: Consumers who perceive parking facilities as important prefer service supermarkets and consumers who perceive parking facilities as less important prefer hard discounters.
2.2.7 Friendliness of salespeople
In retail stores, there is a chance for human interaction. In addition, some consumers enjoy talking and socializing during their shopping trip (Pan & Zinkhan, 2006; Tauber, 1972). This means that some shoppers prefer retail stores where they find friendly and communicative salespeople (Pan & Zinkhan, 2006). Therefore Danaher & Mattsson (1994) state that a person-to-person encounter is a very important element of many services. An important point to remember is that customers’ assessment of service quality depends on perceptions and not necessarily on reality (Berry, 1988). The perceived service quality can be explained as: ‘The customer’s assessment of the overall excellence or superiority of the service’ (Zeithaml, 1988)
.Besides that, retail stores often provide a low level of service that does not match the needs that consumers have (Agins, 1992). Also other research towards customer satisfaction indicated that customers switch between stores not because of the firm’s offerings, but because of the poor service quality (Whiteley, 1991). Salespeople receive in many cases minimal sales training from retailers and therefore lack skills to provide good service quality (Chonko, 1990). Besides that, the friendliness of salespeople is also important for consumers, because when the salespeople are perceived as unfriendly consumers are less comfortable asking questions. Therefore consumers expect a certain threshold level of friendliness. An objective for training salespeople is that they should achieve this threshold level (Darian, Tucci & Wiman, 2001).
As earlier indicated, the result from friendly salespeople is customer satisfaction towards a store. Customer satisfaction or dissatisfaction can be explained as: ‘A function of disconfirmation arising from discrepancies between prior expectations and actual performance’ (Bolton & Drew, 1991; Oliver, 1980; Olshavsky & Miller, 1972). This means in retail stores that the interaction between customers and salespeople is to set up a unique and important performance and thereby influence customer satisfaction. For stores that sell the same kind of products, salespeople performance can be a critical factor in the store choice. This means that a retail store have to provide quality, value and satisfaction for the customer (Darian, Tucci & Wiman, 2001; Parasuraman, Zeithaml & Berry, 1988).
Parasuraman, Zeithaml and Berry (1985) suggest that consumers evaluate service quality on five dimensions, namely: tangibles, reliability, responsiveness, assurance and empathy. This can be quantified by calculating the differences between the expectations and the perceptions of the actual performance of the attributes (Bolton & Drew, 1991).
Consumers point out that price is important to them, but that they are unwilling to
sacrifice on quality, convenience and a comfortable shopping experience. Therefore they
15 select a store that gives them good value for their money (Darian, Wiman & Tucci, 2005;
Hartnett, 1998). Wortmann (2004) state that in contrast to service supermarkets, hard discounters do not offer any services. This means that they do not offer vocational training or the use of any vocationally trained personnel. Therefore personal services have for most of the part being neglected by hard discounters (Wortmann, 2004). This fits the format of discounters to keep the costs down. Therefore the following hypothesis was proposed:
H8: Consumers who perceive friendly salespeople as important prefer service supermarkets and consumers who perceive friendly salespeople as less important prefer hard discounters.
2.3 Willingness to pay
There are different ways to interpret willingness to pay. For Shogren, Shin, Hayes &
Kliebenstein (1994), willingness to pay means the economic value that a consumer is willing to sacrifice in order to acquire a certain utility. This definition is close to the definition of Cameron & James (1987) who define willingness to pay as the maximum amount of money that a customer is willing to spend for a product or service. Monroe & Cox (2001) state that price decisions are very complex and difficult and therefore making decisions over price is one of the most important marketing decisions that managers have to make. In this research the focus will be on the willingness to pay for national brands in hard discounters.
As introduced earlier, there are two types of brands, namely national brands and private label brands. National brands are manufacturer brands and private label brands are produced by the retailer itself (Ailawadi & Keller, 2004). National brands and private label brands differ in many ways. An important element is the perceived quality of both brands.
The perceived quality of national brands is in many cases higher than for private label brands (Sethuraman, 2000). This research will focus on the national brands instead of the private label brands. Both supermarket types, hard discounter and service supermarkets, have national brands in their assortment. Hard discounters in the Netherlands only have recently introduced them to their assortment (Levensmiddelenkrant, 2016). Jacoby and Mazursky (1984) have defined that strong brands (as national brands can be identified) improve the image of the retailer. This is one of the reasons that hard discounters have expanded their assortment with national brands.
The willingness to pay for national brands in hard discounters is a topic that isn’t investigated earlier in research. Many researchers (Van Heerde & Geyskens, 2010; Kumar & Steenkamp, 2007; Sethuraman & Cole, 1999; Soberman & Parker, 2006) have investigated willingness to pay, but they were focussing mainly on the gap between national brands and private labels.
Therefore in this research the focus is only on national brands, but also on hard discounters.
The focus is only on hard discounters, because national brands are recently introduced in hard discounters.
Other research of Donovan, Rossiter, Marcoolyn & Nesdale (1994) have investigated that the
store environment has a positive influence on the time and money that consumers spend in
store. They have also found that a more appealing store environment causes that consumers
spend more money in the retail store than they intended. As earlier indicated in the paragraph
about store preference that atmospherics have an influence on the store preference of
consumers (Bhukya & Singh, 2016). In summary, store preference can be considered as a
driver of the willingness to pay for national brands in hard discounters. Therefore the
following hypothesis was proposed:
16 H9: The higher the customer preference towards the hard discounter format the more
willing a consumer is to pay for national brands in hard discounters.
Another factor that perhaps is a driver for the willingness to pay for national brands in hard discounters is the importance of price for consumers. Adaval & Wyer (2001) state that the reference prices often influence the willingness to pay for products in the same category.
Through the strategy that hard discounters are using (Every Day Low Pricing) the reference price should be lower than for service supermarkets and therefore the importance of price for consumers that visit a hard discounter should be higher. Based on this assumption, the following hypothesis was proposed:
H10: Consumers who perceive price as less important are willing to pay more for national brands in hard discounters and consumers who perceive price as important are willing to
pay less for national brands in hard discounters.
2.4 Brand loyalty
Brand loyalty is very important for firms to have continued success and therefore retain their customers (Dekimpe, Steenkamp, Mellens & Abeele (1997). This is important for brands, because recruiting new customers is five times more expensive than retaining a customer (Frederick & Sasser, 1990; Rondan Cataluna, Garcia & Phau, 2006). Besides lower costs, having loyal consumers as a company also has some other advantages. The first advantage is that a loyal customer base ensures the firm with time to respond to actions of competitors (Aaker, 1991; Dekimpe et al., 1997). The second reason is that a large amount of loyal consumers can be seen as a competitive asset for a brand and therefore provide value towards the brand equity (Dekimpe et al., 1997). The third advantage is that a loyal customer base reduces the marketing costs of the brand (Rundle-Thiele & Bennett, 2001).
Researchers agree with each other that loyalty is a very complex concept (Javalgi &
Moberg, 1997; Rundle-Thiele & Bennett, 2001). One possible way of defining brand loyalty is: ‘Consumer’s strong commitment towards a particular brand to the extent where the consumers will be motivated to obtain that brand exclusively on every purchase transaction and is constantly looking out for any marketing activities related to that brand’
(Bandyopadhyay & Dube, 2005; Rondan Cataluna, Garcia & Phau, 2006). The definition of brand loyalty that is used in this research paper is the definition of Jacoby (1971), this is: The biased (non-random) behavioral response (purchase) expressed over time by some decision- making unit with respect to one or more alternative brands out of a set of brands and this is a function of psychological processes (Jacoby, 1971; Rundle-Thiele & Bennett, 2001). Besides that, many researchers state that loyalty can be categorized as either behavioral or attitudinal.
This means that loyalty can be seen as a dimensional concept (Baldinger & Rubinson, 1996;
Hollis & Farr, 1997; Rundle-Thiele & Bennett, 2001).
Consumers who are loyal towards a brand are less price sensitive towards their
preferred brand. This is because of their strong preference towards the attributes of that
particular brand. The other way around, consumers who are not loyal towards a brand should
be very price sensitive towards a brand. This is because they do not prefer a particular brand
and therefore they buy a brand whereby the price is low enough (Krishnamurthi & Raj,
1991). Other research state that brand loyalty is replaced by price loyalty, this is because of
the growing popularity of private label brands and therefore decrease the brand loyalty in
recent years (Dekimpe, Steenkamp, Mellens & Abeele, 1997). However, this is contradicted
by Rondán Cataluña, Garcia & Phau (2006). They state that brand loyalty positively
17 influences consumers’ purchase of private labels and national brands. Rondán Cataluña, Garcia & Phau (2006) also found evidence in their research that brand loyalty can be seen as an influencer when a consumer is deciding where to buy their groceries. This is based on research of Bell, Ho & Tang (1998), they state that the threshold level of the basket size determines whether one store is preferable over another. This loyalty is category-independent and category-specific. Category-independency depends on the habit preference towards a store where category-specific depends on a shopping list (Bell, Ho & Tang, 1998). In summary, it has been shown from this review that brand loyalty influences the relationship between store choice/store preference and the willingness to pay. Based on the research that is described can be expected that when consumers are brand loyal towards national brands they strengthen the relationship between store preference and willingness to pay and when consumers are not brand loyal the effect would be the contrary. Based on that the following hypothesis was proposed:
H11: The relationship between store preference and willingness to pay for national brands in hard discounters is stronger for consumers that are brand loyal towards national brands than for consumers that are not brand loyal towards national brands.
2.5 Conceptual model
Based on what is explained in previous paragraphs, the conceptual model shows the central theme of the paper.
Figure 1 - Conceptual model
18 3. Methodology
The third chapter of this research is about the methodology. First the research method will be explained. After the research method, the data collection and plan of analysis is proposed.
3.1 Research Method
As the main research method a conjoint analysis will be used. A conjoint analysis helps to measure the preferences of consumers in such a way that it reveals what consumers like and prefer (Eggers & Sattler, 2011). Green & Srinivasan (1990) describe a conjoint analysis as a model for prediction choice or at least intended choice. There are many approaches for the conjoint, for example the rating-based conjoint or the choice-based conjoint. These conjoint methods differ in how the respondents evaluate the examined product (Eggers & Sattler, 2011). This research makes use of the choice-based conjoint. In a choice-based conjoint consumers repeatedly choose their most preferred option from a set of alternatives. The choice-based conjoint is a popular approach, because choices are an integral part of people’s everyday life (Eggers & Sattler, 2011). The choice-based conjoint will be used to measure the store preference of consumers and the willingness to pay for national brands at hard discounters. The store characteristics and brand loyalty variables are measured by some additional questions.
3.2 Data collection
In this paragraph the questions are clarified which are used to provide useful insights into the variables. The first measure method is the choice-based conjoint, followed by store characteristics, brand loyalty and additional questions.
3.2.1 Choice-based conjoint
As explained before, the choice-based conjoint is used to provide insights into the willingness to pay for national brands at hard discounters and store preference for hard discounters and service supermarkets. To identify this, two categories are used, namely a food category (cola) and non-food category (detergent). These two categories are chosen, because national brands in these categories are sold in both hard discounters and service supermarkets. For identifying the attributes and levels of the two choice-based conjoints, Eggers & Sattler (2011) state that the attributes and levels should be realistic and reasonable in number (i.e. not ambiguous).
Additionally, Schlegelmilch & Ambos (2004) state that the attributes and levels should be independent for each other and also be actionable.
To discover the best attributes and levels for both conjoints, different websites are used to gather information. For the attribute brand, the brands that are most visible and most sold in stores are used in the conjoint. For the cola category these brands are Coca-Cola, Pepsi and the Private label brand (Trouw, 2017). In case of the detergent category, these brands are Dreft, Dubro and also Private label (Van Roosmalen, 2016). For both conjoints, three price levels are used. The price levels that are used are around the average price levels of both categories in the Netherlands (Albert Heijn, 2017). The third attribute that is used in the choice-based conjoint is the distance to the supermarket. CBS (2010) states that the nearest supermarket in the Netherlands is on average 900 meters away from consumers’ homes.
Therefore the levels 500 meters, 1 kilometer and 1,5 kilometers are used. The last attribute
that is used is the type of supermarket. The levels for this attribute are, as described in chapter
19 two, the hard discounter and service supermarket. Based on these decisions, the conjoint attributes and levels are exposed in table 1.
Table 1 – Attributes and levels choice-based conjoint
Conjoint food category Conjoint non-food category
Brand - Coca Cola
- Pepsi - Private Label
- Dreft - Dubro - Private Label
Price - € 1,39
- € 1,79 - € 2,19
- € 1,69 - € 2,09 - € 2,49 Distance to the supermarket - 500 meters
- 1 kilometer - 1,5 kilometers
- 500 meters - 1 kilometer - 1,5 kilometers
Type of supermarket - Hard discounter
- Service supermarket
- Hard discounter - Service supermarket
When applying a conjoint, the option is to use a full factorial or a fractional factorial design.
In a full fractional design all the possible level options are displayed to the respondent. In this case the total number of options for one conjoint are 54 (3 x 3 x 3 x 2 levels). This means that the respondent has to answer a lot of choice options. Another option is the fractional factorial design. This means that the respondent only sees a subset from the full factorial design.
Eggers & Sattler (2011) state that the number of alternatives per choice set usually lies between two and five and the number of choice set between eight and sixteen. For this research three alternatives per choice set are used and twelve choice sets per category are shown to the respondents. This numbers are chosen to have minimal overlap between the choice sets. Also a dual response option is applied to provide the respondent an option to choose if they would rather buy the option of their choice or not (Eggers & Sattler, 2011).
This option provides the respondent an opportunity to show their sincerely purchase intention.
3.2.2 Store characteristics
To measure the store characteristics: price, promotions, assortment, quality of merchandise, atmosphere, store location, parking facilities and friendliness of salespeople an additional question will be used. The question that is used to measure the store characteristics is based on research of Fischer, Volckner & Sattler (2010). The respondents have to divide 100 points over the store characteristics in terms of importance. The more important the characteristic is for the respondent, the more points they should give to the characteristic.
The respondents can also give zero points to a characteristic when it is not important for visiting a supermarket. The question is displayed in table 2.
3.2.3 Brand loyalty
Brand loyalty is measured with multi-scale items based on two researches, namely the
research of Fischer, Volckner & Sattler (2010) and the research of Grohmann (2009). These
20 multi-scale items can be used to measure the brand loyalty of the respondents. This means that brand loyalty is measured in an indirect way through asking multi-scale items. The items that are used are specified towards the brand loyalty of national brands. The items are measured with a 7-point Likert scale from negative to positive. The multi-scale items are displayed in table 2.
Table 2 – Explanation store characteristics and brand loyalty
Topic Research Questions
Store characteristics Fischer, Volckner &
Sattler, 2010
How relevant are the price, promotions, atmosphere, friendliness of salespeople, location of the supermarket, parking facilities, assortment and quality of merchandise in supermarkets (hard discounter/service supermarket) to you? To this end, you have 100 points. The more important a criterion is to you, the more points you should give it. You can also rate a criterion with 0 points if it is of no importance to you at all when visiting a supermarket.
Brand loyalty Grohmann, 2009 and Fischer, Volckner &
Sattler, 2010
Provide as good as possible an answer on the following statements:
- I prefer a particular national brand.
- I am willing to invest additional time and/or effort, just to be able to buy my favorite national brand.
- When purchasing, it is usually important to me which national brand I purchase.
- I will buy a national brand next time I buy.
- I intend to keep purchasing national brands.
3.2.4 Additional questions
Besides the constructs that are already discussed in previous paragraphs, there are other variables that can influence respondents’ choice behavior. One of them is the price consciousness of respondent. This is measured based on multi-scale items from the research of Ofir (2004). A 7-point Likert scale (from negative to positive) is used in measuring these items. The multi-scale items are shown in table 3. Other variables, which can be interesting as covariates in the choice-based conjoints, are displayed in table 3.
Also some demographic questions are added to distinguish the respondents. Adding demographic questions in the questionnaire also allow for segmentation of the respondents.
The questions that are used are:
- What is your gender?
- What is your age?
- What is your highest received education?
- What is your annual household income?
Table 3 – Other variables in the questionnaire
Topic Research Questions
Price consciousness Ofir, 2004 Provide as good as possible an answer on the following statements:
21
- I check out the prices in more than one food store/supermarket in order to find the cheap prices.
- I am not willing to invest special effort to find cheap prices.
- I typically seek out cheap retail outlets to buy products for the house.
- I do not shop in more than one store to find cheap products.
- The time I spend seeking out cheaper products is worthwhile.
- In general, the saving achieved by finding cheaper prices is not worth the time and effort.
Share of wallet supermarket type
Niedrich &
Swain, 2003
Divide 100 euro’s over the following two types supermarkets, namely hard discounters and service supermarkets, in such a way that it reflects your preferences (the most euro’s for the store type you most prefer).
Visiting supermarkets How often do you visit supermarkets on average when you go shopping (hard discounters and service supermarkets together)?
- Less than once a week - Once a week
- Twice a week - Three times a week - Four times a week - Five times a week - Six times a week
- More than six times a week Total number of
supermarkets per shopping session
How many supermarkets do you visit each time when you go shopping (hard discounters/service supermarkets together)?
- One supermarket - Two supermarkets - Three supermarkets - Four supermarkets - Five supermarkets - Six supermarkets Share of wallet national
brands and private labels
Niedrich &
Swain, 2003
Divide 100 euro’s over the following two types products, namely national brand products and private label products, in such a way that it reflects your buying behavior (the most euro’s for the type of product to which you spend the most money).
3.3 Plan of analysis
The measurement of the constructs that are explained in paragraph 3.1 and paragraph 3.2 are used to provide insights into the conceptual model. The data that is derived from the measurement of the constructs is tested in several ways, namely an analysis of the conjoint, a segmentation analysis and a regression analysis. The analysis of a conjoint is performed to indicate the utilities of the attributes and levels in choice-based conjoint. As a second step, in Latent Gold a latent class analysis can be performed. Vermunt & Magidson (2005) state that a latent class analysis can be used to identify a number of segments in the respondents.
As a third step, a linear regression is conducted with the data that is extracted from the
choice-based conjoints and the additional questions to see if there is a significant effect. To
perform a linear regression, the store preference and willingness to pay values have to be
extracted from Latent Gold.
22 4. Results
The fourth chapter of this research is about the results. First the sample will be explained.
After that the data exploration, the choice-based conjoint, segmentation analysis and influencers of store preference and the willingness to pay will be discussed.
4.1 Sample
The choice-based conjoints and additional questions are measured at a platform that is called My Preference Lab. My Preference Lab can only have one conjoint in time, therefore two conjoints are created and linked to each other (to measure both the cola and detergent category). The survey is spread among Dutch consumers via social media from 21 April till 29 April 2017. A total number of 561 respondents have started the survey, whereby 461 completed the whole survey. Only the respondents that have finished the survey are selected.
The average time that respondents have used to fill in the survey is 10 minutes and 50 seconds. The survey is going to be analyzed with a combination of SPSS and R.
Due to problems with the registration of the respondents, many respondent ID’s only registered in one part of the choice-based conjoint. To be sure that the respondent ID’s are in both parts of the survey, the respondent ID’s that aren’t in both parts of the survey are removed. It is important that the respondents are in both parts of the survey, because the respondents that only have seen the first part of the survey haven’t filled in the additional questions. This means that 201 respondents have remained. In the 201 respondents, there are no missings and outliers and therefore can be continued with 201 respondents.
4.1.1 Factor analysis and reliability analysis
In order to measure brand loyalty and price consciousness, multi-scale items are used. To indicate if the multi-scale items can merged together in one or more factors (i.e. in one or more overarching groups) a factor analysis can be used. After a factor analysis, a reliability analysis can be used to indicate if the internal consistency of the factor is strong enough to add them together.
Brand loyalty is measured with five statements; these statements are presented in
paragraph 3.2.3. A factor analysis is appropriate when the KMO is above 0,5 and the
Bartlett’s test of sphericity has to be significant (Malhotra, 2010). It is also important to
check if the communalities are above 0,4 (Malhotra, 2010). The communalities measure the
percentage of variance in a given variable explained by all the extracted factors. In the case of
the multi-scale items of brand loyalty, the KMO is 0,842 and the Bartlett’s test of sphericity
is significant. The communalities are all above 0,4, the lowest is 0,653 and the highest is
0,769. This means that for the multi-scale items of brand loyalty a factor analysis is
appropriate. The factor model that is selected is the principal component analysis. This the
most popular model to use for the factor analysis (Malhotra, 2010). The PCA shows that
reducing the five statements into one factor is a good option. One factor has an eigenvalue
over one (3,7), the factor explains more than 5% (74,7%) and the total explained variance of
one factor is over 60% (74,7%). Therefore the statements can be combined into one factor,
this factor is called brand loyalty. A Cronbach’s alpha analysis can help to determine the
reliability of the factor that is found in the PCA is strong enough (Malhotra, 2010). The brand
loyalty factor has a Cronbach’s alpha of 0,915. Removing one of the five statements out of
the factor cannot increase this value. The Cronbach’s Alpha of 0,915 is higher than the
threshold of 0,70 and therefore the factor is strong enough.
23 Price consciousness is measured with six statements; the statements are explained in paragraph 3.2.4. The KMO of the statements is 0,843 and the Bartlett’s test of sphericity is significant. Not all the communalities are above the 0,4, only the last statement has a communality value of 0,287. Based on the KMO and Bartlett’s test of sphericity can be concluded that a factor analysis is appropriated. Also in this case, the statements about price consciousness are tested with a principal component analysis. The PCA shows that reducing six statements into one factor is an appropriated solution. One factor has an eigenvalue above one (3,115), the factor explains more than 5% (51,9) and the total explained variance of one factor is almost 60% (51,9). Therefore all the six statements can be combined into one factor:
price consciousness. The Cronbach’s alpha analysis shows a value of 0,811 for the six statements about price consciousness. The value can be increased towards 0,815 by removing the last statement, but this is such a small difference that is decided to keep all the six statements in the factor. Based on these Cronbach’s alpha value can be concluded that the factor about price consciousness is strong enough.
4.2 Data exploration
Table 4 shows that the sample consists of 52 males and 149 females. Most respondents are aged in the group of 25 - 34 years old. This group consists of 30,3% of the total sample size.
The largest group after 25 - 34 years old is the group that consists respondents within the age of 18 - 24 years old. Most of the sample size has received a MBO diploma (33,8%) or a HBO/WO diploma (47,8%). Furthermore, the income of the biggest part of the sample size is below €36.500. This means that most of the sample size earns less than the average income in the Netherlands (Gemiddeld inkomen, 2017)
Table 4 – Descriptives of gender, age diploma and income
Frequency Percentage
Gender Male
Female
52 149
25,9%
74,1%
Age Younger than 18 years old 18-24 years old
25-34 years old 35-44 years old 45-54 years old 55-64 years old 65-74 years old 75 years or older
2 59 61 36 29 12 1 1
1%
29,4%
30,3%
17,9%
14,4%
6,0%
0,5%
0,5%
Diploma No education Primary education LBO/MAVO/VMBO MBO
HBO/WO Other
2 3 26 68 96 6
1,0%
1,5%
12,9%
33,8%
47,8%
3,0%
Income Below €36.500 Around €36.500 Around €51.500 Around €69.000
101 49 30 6
50,2%
24,4%
14,9%
3,0%
24
More than €69.000 15 7,5%
As presented in the previous table, there are a lot of young respondents that filled in the questionnaire. The distribution of the age is compared to the Consumententrends of 2014 (EFMI Business School, 2014). Table 5 shows that the distribution of the shopper population contains less young consumers than the questionnaire. In order to make this research more representative based on the shopper population, the respondents are weighted. Table 5 also shows the distribution of the age after weighting. In this case, the numbers after the weighting are still not exactly the same as the shopper population in the Netherlands, because this research doesn’t contain a lot of respondents in the category of 55 years and older. Therefore it has been corrected in a way to get around the shopper population in the Netherlands, but in a manner that overestimating the category of 55 years and older is not the case. Through the weighting by age, the distribution of other variables also changed. The ratio female (78,9%) and male (21,1%) changed. Consequently the other variables also changed. Namely the diploma variable changed into 0,5% for no education, 1,1% for primary education, 24,8% for LBO/MAVO/VMBO, 31,4% for MBO, 40,3% for HBO/WO and 1,8% for other. The last explanatory variable that has changed is the income of the respondents. This changed into 42,0% for below €36.500, 28,5% for around €36.500, 18,4% for around €51.500, 2,7% for around €69.000 and 8,4% for more than €69.000.
Table 5 – Distribution of age
Age Distribution before
weighting
Distribution shopper population
Netherlands
Distribution after weighting
18 - 34 years old 35 - 54 years old 55 years and older
60,7%
32,3%
7%
24%
41%
35%
28,4%
44,3%
27,5%
The respondents also provide the share of wallet of national brands versus private labels and the share of wallet about their preference towards hard discounter versus the service supermarket. To provide a clear overview of the share of wallets, the numbers of the share of wallet for discounters and the share of wallet for service supermarkets are classified into categories. This also applies for the share of wallet of national brands and the share of wallet of private labels. Table 6 shows that the share of wallet for service supermarkets is higher than the share of wallet for hard discounters. The table also shows that the share of wallet of private labels is larger than the share of wallet of national brands. Seven respondents spend all their money on private labels in contrast to the five respondents that spend all their money on national brands.
Table 6 – Descriptives share of wallet questions
Share of wallet Hard
discounters
Share of wallet Service supermarkets
Share of wallet National brands
Share of wallet Private labels
Average 45,66 54,34 47,31 52,69
