Supermarket Pricing Model Impact on Private Label Brands versus National Brands among Millennial Consumers

Jeff Hendrix
2017 Journal of applied marketing theory  
Are national brands (NB) manufacturers at risk of losing sales to private label brands (PLB) in low quality variance categories, as the Millennial generation continues to outpace previous generational cohorts in absolute size and spending power? A quantitative examination of archival home scan panel data from over 100,000 U.S. households, investigated actual purchase data over a three-year period. Consumer metrics for Rice and Pasta category; trip conversion, buyer conversion, and loyalty
more » ... as dependent variables interacting with a multivariable grouping of independent variables; branding (NB vs. PLB), age cohort (Millennial vs. Generation X), and grocery pricing model format (Hi-Lo vs. EDLP vs. Hybrid). A MANOVA provided consistent findings for both rice and pasta categories to support significance level .002 (rice) and <.001 (pasta) for differences in branding and age cohort purchase data, specific to buyer conversion. The results of this study indicated NB (rice and pasta) are still significantly larger categories than PLB (rice and pasta), however, Millennial shopper buyer conversion was significantly higher in PLB purchases across both rice and pasta when compared to Generation X. Additional findings supported that EDLP grocery pricing models capture opposing consumer loyalty in rice (higher) and pasta (lower), thus supporting the need for separate marketing strategies to reach both Generation X and Millennial consumers.
doi:10.20429/jamt.2017.070202 fatcat:mismmibsf5fzjbauojbw73ncvm