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Consumer behaviour and factors affecting the selection of green private label products in Greek retail market
Georgios TSEKOUROPOULOS, Dimitrios THEOCHARIS, Christos SARMANIOTIS

Last modified: 2019-11-15

Abstract


Extended Abstract

Private label products are products that have the name of the store or the name of the company owned. Made on behalf of a commercial enterprise, usually by third parties and placed on the same branch network (Adomaviciute & Vengrauskas, 2012). During the last few years, due to the strong presence of discount stores, retail chains continually expand the range of private label products. Green private label products, except of being a defensive mechanism towards discount chains, they contribute to the diversification of the commercial chain, greatly expanding the range of products in the store and the customer's choice, ensure higher margins and increase the bargaining power of the chain towards suppliers. Therefore, the intense competition between retail operators in order to gain greater market share in relation to the increasing consumers’ awareness regarding price and quality issues, contributed to the production of green private label products (Ashley, 1998). The production of these products is usually done by large companies, based on available technology and at the same or similar standards to those of branded products. In some cases, the retail company participate in the design and product development process, while the name of the chain is an added factor. In the early years of presence of private label products, they were characterized as products with low price and low quality. Also distinguished by its simple packaging, the absence of advertising and the limited number of product categories. However, during the recent years the companies continuously expand the number of codes of private label products and simultaneously improve the quality of the products as well as there is the upward trend for this product category and is expected to increase during the next years. As a consequence a large proportion of consumers now consider green private label products, as quality products with high performance (Chen, 2014). A lot of research has been done in an international level in order to identify the factors that influence the success of green private label products. These factors can be grouped as factors associated with the product category, with the store, the economy and the demographic characteristics of consumers (Beneke, Flynn, Greig & Mukaiwa, 2013). The category of products is considered as a very important factor for the acceptance or the rejection of green private label products by the consumers. According to Martinelli et al.(2015), the willingness of consumers to buy private label products is negative associated with the importance of their purchase. Finally, Pepe, Abratt and Dion(2012) report that when consumers feel that the product they tend to buy offers high satisfaction, they are willing to buy the product even it has a high price. The purchase frequency of the product category is also an important criterion regarding the decision of consumers to buy green private label products. According to Walsh and Mitchell(2010), consumers who buy large quantities of a product category are more likely to switch to a more economical solution, which leads to significant economic benefits. Instead, according to Anderson and Simester(2014), consumers are willing to pay more in product categories that they do not buy too often. Another product-related factor is the perceived price and quality levels. According to Olbrich and Jansen(2014), the share of private label products is 56% higher in low innovation categories than in highly innovative categories. Moreover, Bhatt and Bhatt(2012) states that private label products should be easy to be produced and do not require special expertise, which the manufacturers would not be willing to use them to manufacture private label products, but only to produce their own brands.

 

The factors associated with the store and affect the acceptance of private label products are the image, the atmosphere and loyalty in the store. The private label products are an extension of the image of the store (Beneke, et al., 2013). Therefore, the store's image can be considered a major predictor of consumer attitude toward private label products. As a result, if a consumer perceived a shop as repulsive and poor, it is likely to form the same concept for the store's private label products, resulting in negative behaviour to them (Walsh & Mitchell, 2010). Research has led to the conclusion that consumption of private label products is affected by economic conditions prevailing in the market. When the economy is in recession and economic conditions are unfavourable, there is an increase in the consumption of private label products, and when economic conditions are favourable, then their consumption is reduced. Therefore, it can be concluded that there is an inverse relationship between the economic conditions of the market and the consumption of private label products. Finally, according to Beneke, et al. (2013), the age of the consumers is associated negatively with the acceptance of higher price of branded products. In particular, younger consumers (18-40 years) will pay the highest price to buy a designers’ brand, unlike the middle-aged (41-60) and older (61+) who they will pay less. This is because, due to the stronger desire for social acceptance and younger consumers are more oriented to brand image they buy and therefore they are willing to pay a higher price.

A primary quantitative research has been conducted in order to answer on specific research hypothesis that have been stated in the methodology chapter. The main findings of the research illustrate that there are positive relationships between the intention to buy green private label products, the factors of perceived value (quality, emotional, price and social), the brand consciousness of customers and consumers’ attitude toward green private label products, and with some of the demographic variables.


Keywords


Consumer behaviour, green products, private label products, digital marketing, webpage

References


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