Multi-tier store brand strategies: a case study

Abstract

Purpose This paper aims to describe and understand the offer of premium private labels (PPLs) in Italy, with a case study on the extra virgin olive oil (EVOO). Design/methodology/approach The empirical study on EVOO in Italy was aimed to investigate the drivers of the offer of PPLs and its effects on assortment policies. The study was carried out in three Italian provinces, using a cross-sectional design with data collected through direct observation. A two-step data analysis was performed. First, descriptive statistics were used to preliminary appraise hypotheses on the rationale underlying the offer of PPL, and then, the drivers of PPL policy were studied using a logistic regression model. Findings The estimated model indicates that in the case of EVOO the probability of offering a PPL is higher for stronger with a stronger competitive position (with respect to other stores), and increases with the size of the category assortment (Total Assortment Width) and with the share of the PL products offered by the store (PL Assortment Index). It also increases if the average price (Total Average Price) and the average price of the standard private label (SPL Average Price) improve; by contrast, it decreases if the national brand (NB) share in the assortment (NB Assortment Index) augments. Research limitations/implications Overall, the study confirms that the multi-tiered PL strategy is one of the current competitive strategies of top retailers, centred more on a differentiation than on a low cost/price policy. Such a differentiation policy may have various effects in terms of channel structure and social welfare depending on the underlying corporate and consumer goals and beliefs and on the existing institutional framework. Originality/value This is the first study to investigate the PPL market in Italy using original data and taking into account policies actually carried out at the individual store level. A further element of novelty is the attention given to the welfare effects of multi-tier strategies. This paper suggests that these latter may have various effects in terms of channel structure and social welfare depending on the underlying corporate and consumer goals and beliefs and on the existing institutional framework.

Gluten-Free Products: From Dietary Necessity to Premium Price Extraction Tool

“…The surveyed stores were representative of all retail formats (discount, hypermarkets and supermarkets, as classified by the EU [19]), and of all the 20 main retail groups operating in the Italian food market [20]. The study was performed in three Italian provinces (Livorno, Naples and Salerno) representative of the Italian food retail industrial structure, which is characterized by a high concentration in central in northern areas of the country (Livorno in Tuscany), and a lower concentration in southern Italy (Naples and Salerno in Campania) [21,22]. A sample of 212 stores was surveyed, accounting for around one in four of overall stores in the three provinces [23].…”

The effects of packaging design of private brands on consumers' responses

“…Multitier private brands have emerged as one of the most significant trends in retailing and a crucial strategy for competitive advantage (Gorgitano & Sodano, 2019; Palmeira & Thomas, 2011; ter Braak et al, 2014). Recent literature indicates that retailers need to expand private brand approaches to reflect fast‐changing private brand businesses and to incorporate more sensory and social aspects into private brands (e.g., Gielens et al, 2021).…”

“…These benefits have turned premium private brands into one of the hottest retail trends (Gorgitano & Sodano, 2019;Palmeira & Thomas, 2011;ter Braak et al, 2014).…”

“…Multitier private brands benefit retailers because they meet diverse consumers' needs, enhancing retailers' competitive advantage in a challenging market. These benefits have turned premium private brands into one of the hottest retail trends (Gorgitano & Sodano, 2019; Palmeira & Thomas, 2011; ter Braak et al, 2014).…”