The researchers go on to discover that the consumer habits of people who consider themselves smart shoppers differ across countries. Consider, for example, the preference between store-label brands and national-label brands. Store brands display the retailer’s name or a brand name used only by that retailer. The researchers report prior findings that 58% of consumers overall consider themselves to be smart shoppers when buying store-label brands. Interest in these house brands is not distributed evenly across nations, however.
The researchers break this out by finding that smart shoppers in Spain are more likely than those in Germany to favor store-label over national-label brands. The tradeoffs: An appeal of store brands to smart shoppers comes from the prices generally being lower than that of national-brand parallels. An appeal of national brands to smart shoppers comes from the perception of enhanced quality because of the production heritage of the company name.
The researchers found smart shoppers in Spain, who place a relatively high value on achievement, attracted to store brands over private brands because of the achievement in saving money. But contradicting the researchers’ expectations, a smart shopper self-concept in Germany was associated with less interest in store brands. The researchers attribute this to German consumers taking low prices on store brands for granted, so they get their thrills from finding discounts on national brands. In France and America, the other two countries studied, there were no significant relationships between a smart-shopper self-image and preference for store brands.
Private-label goods can benefit not only smart shoppers because of lower item prices, but also retailers because these goods generally offer higher profit margins. Further, at times of supply chain crimps, such as accompanied the COVID-19 pandemic, the flow of private-label goods is often smoother than that of national-label goods. The four consumer cultures explored in the research were from Europe and North America. Certainly, nations in other parts of the world have their own value blends which influence the degree of store-brand attraction. In addition, there are individual differences among consumers in a particular country. With these cautions in mind, shape the appeal of house brands to fit the national culture in which you’re doing business.
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Finesse Profit Margins on House Brands
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