Relevant Studies in the SB Literature Indicating Research Gaps

In this section, we portray the work of five research papers found in the marketing literature that are similar to this research study and identify research gaps that we try to address. These writings pertain to the work of Semeijn, van Riel and Ambrosini (2004), Collins-Dodd and Lindley (2003), Bloemer and de Ruyter (1998), Ailawadi, Pauwels et al. (2008) and Martenson (2007).

Semeijn, van Riel and Ambrosini (2004) conducted an experiment in three major grocery retailers in The Netherlands and in four different food product categories. They developed a model (Figure 3.1) hypothesizing that store image and perceived product attributes influence consumer attitudes towards SBs. They found that store image has a direct, positive and linear relationship to the attitude towards the SBs.

Figure 3.1: Relationships between Store Image, Product category attributes and Store Brand Attitudes

Fig. 2. Revised model based on empirical observations. Source: Semeijn et al., 2004

Concerning product attributes and associated risks, they found that the perceived risk (functional, psychological and financial) associated with a product category has a negative relationship to the attitude towards the SB and that the perceived risk mediates the effect of store image on SB attitude. Their findings, however, indicate significant differences between the three retailers so they conclude that their model is not complete.

Collins-Dodd and Lindley (2003) examined the effect of store image on the image of SB within the grocery sector. They selected the top three retailers in Canada, in terms of market share, for their study. Their model included the following three variables: the store image for each of the three retailers; the image for the SB category; and the image for the SB of each of the three retailers. They hypothesized that the consumers’ perceptions of store image will

have a positive association on SB image. They found that the image of the SB category positively affects the image of the retailer’s SB, and that the image of the store is positively associated with the image of the retailer’s SB. They

concluded that store image could be used to predict SB evaluation.

One should note that neither study examines the effects of customer satisfaction with the store within their proposed theoretical frameworks. This seems to be something that is required, since satisfaction has a direct effect upon store loyalty and its overall role seems to be very important. Bloemer and de Ruyter (1998) found that the effect of store image on the behavioral component of attitude (loyalty) is indirect, and that satisfaction with the store is a mediator in this relationship (see Figure 3.2). So, in our study, we develop specific research hypotheses for the relationship linking customer satisfaction with the store, SB purchases and the level of trust in the SBs.

Bloemer and de Ruyter (1998) also found that there are two components to the image of SBs. One component is related to the overall image of the SB as a category and the other is “store specific”. Specifically, they indicated, “…research has dealt with the phenomenon of store brands as a concept that is

different from national brands, but does not explore store specific brand influences”. This study addresses their call in that we need to develop specific research hypotheses for the SBs by major retailer and to add other dimensions of satisfaction and loyalty such as word of mouth.

Figure 3.2: Empirical Model

Source: Bloemer and Ruyter (1998)

Ailawadi, Pauwels et al. (2008), assessed the correlation between SB share and store loyalty for two leading chains in The Netherlands (Albert Heijn and C100). They defined store loyalty by calculating the spending in the store as a percentage of the total purchases on supermarket products (share of wallet). They also defined SB share as the household’s SB spending at the store over its

total spending in that store on product categories in which the store offers SBs. They found that the SB share was different between the two retailers and this was consistent with other studies (Dhar and Hoch 1997). Due to this variation the importance of estimating such relationships for each retailer separately was emphasized. They also found that there is “a reverse causality and nonlinearity

in the relationship between SB and loyalty”. That is, SB share significantly affected loyalty and that loyalty significantly affected SB share for both retailers.

Image

Elaboration

Specifically, they find that: (a) “consumers’ general propensity to buy PLS (in other chains) has a negative effect on SOW”, (b) “there is an inverted U-shaped effect of PL share on SOW and that retailers should know the point of SB share”.

Finally, Martenson (2007) examined the impact of corporate store image on customer satisfaction and loyalty in grocery retailing. She confirmed the strength of the “store as a brand” concept that was previously mentioned by other

researchers (Dick, Jain et al. 1996; Burt and Sparks 2002). Martenson (2007) developed a model that related the following latent variables: the store as a brand; the SB and the Manufacturer Brands to the dependent manifest variable store loyalty through the level of satisfaction with the store (see Figure 3.3). She found that from the three latent variables the store as a brand is the variable with the highest relationship to corporate image. She also found that manufacturer brands have the lowest effect since consumers expected to find them in the stores. Additionally, SBs also had a low effect indicating that consumers did not expect retailers to introduce SB. Again in this study, we see that SBs are treated as an independent variable and their impact on loyalty to the store is investigated via image and satisfaction. We know from other studies that store brand name, store prices, and promotions affect the consumer’s response to products. We

also know that store image and satisfaction with the store positively affect purchase intention (Grewal, Krishnan et al. 1998; Burt and Sparks 2002). So, in this study, we want to investigate the effect that the customer satisfaction might have on SBs.

Figure 3.3: The role of Store Image for Satisfaction and Loyalty

Source: Marteson (2007)

One observation after reviewing these five research papers is that SBs are considered by researchers as a product category rather than as separate brands, with each one having its own unique characteristics and generating consumer attitudes and perceptions. Another observation is that there are no research studies in the literature that try to analyze the relationship(s) between the

retailer’s strategy, the retailer’s SB management practices, and the consumer’s acceptance of the retailer’s SBs.

Morris (1979) found that SB penetration is not dependent upon the price differential alone but it is also affected by the strength of the manufacturer. He found that the penetration of SBs is expected to be lower in situations where the manufacturer holds a strong leading position in the market, and/or is spending heavily on advertising. Since the 1970’s many things have changed. Retailers

have more power; often more than the manufacturers, and their role in the channel has been enhanced. Burt (2000) provides an assessment of the evolution of the SBs in Britain. He explains that this is due to the repositioning of the SBs during the mid-1980s, from low price-low quality to high quality brand alternatives, and the successful creation of the retailer as a brand in the U.K. Ubina, Rubio et al. (2006) provide some analysis of SB management practices but from the manufacturers’ perspective. So, it appears that empirical studies on

the role of the retailer and specifically the retailer as a brand are underrepresented.

The focus of this research is therefore to assess how the retailer’s overall

strategy affects SB proneness. Retailers are the last institution in the channel of distribution. They are the only ones who come in direct contact with consumers, so their role should not be underestimated. Retailers have played a very important role in the growth of SBs. In this research, we will explore the link between SB purchases, the level of trust with the SBs, and the level of customer satisfaction with the store.

The above review identified research gaps that this study will attempt to address. It provides a theoretical justification for examining customer satisfaction and level of trust in the SBs as variables that influence SB purchases. In the following section, the researcher presents the conceptual model adopted for this study and describes each of the constructs prescribed in the model.