The Impact of Retail Promotion on the Decision to Purchase Private Label Products: the Case of U.S. Processed Cheese

Abstract

The authors examine the impact of retail promotions, specifically, store coupons, manufacturer coupons, and store features on the decision to purchase private label products. To identify these effects, a probit model is specified and estimated, which allows the calculation of the probability that the private label product is chosen conditional on a set of explanatory variables. Attention is centered on American processed cheese transactions. The source of the data is ACNielsen Homescan Panel of U.S. households for calendar years 2005 and 2006. Retail promotion using store coupons had a significant negative effect on the decision to purchase private label products. In our sample, store coupons were used to purchase both private label products and national brands. A strong negative relationship was found between national brand manufacturer couponing activity and the decision to purchase private label products. Therefore, national brand couponing appears to be an effective strategy for manufacturers to deter private label growth, at least in the processed cheese market. This analysis also shows that the decision of purchasing a private label cheese product is influenced by several sociodemographic characteristics of the household, namely household income and size, age and education of the household head, race, ethnicity, and location. [EconLit classifications: D10, D12]. r 2011 Wiley Periodicals, Inc.

Consumer Perceptions of Private Label Brands in Lebanon

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Coupons and Manufacturer Market Shares: A Brand-Level Analysis of the Ready-to-Eat Breakfast Cereal Market

“…The recent rise in coupons sparked considerable interest among various participants of the food marketing system, policy makers, and researchers alike. Ample interest in research circles has focused on the effectiveness of coupons in promoting product sales, expanding customer base, and increasing product market shares (Lee and Brown, 1985;Neslin, 1990;Sethuraman and Mittelstaedt, 1992;Raju, Dhar, and Morrison, 1994;Cotterill and Haller, 1997;Cotterill, Putsis, and Dhar, 2000;Dong and Kaiser, 2005;Bouhlal and Capps, 2012). Despite the colossal research effort devoted to studying the importance of coupons, there is a lack of evidence as to how brand-level market shares may be impacted by coupons.…”