Handling Private Label Customer Complaints to Improve Customer Satisfaction: Qualitative Evidence from Turkish Retailers

Introduction

The conventional retail industry has gone through a significant phase of disruption since the late 1960s due to changing consumer characteristics and technology driven economy and society. In the late 1960s, retailers started investing in developing their own private label brands because of the reasons such as creating low-cost products, increasing loyalty for greater profits, keeping up with the changing shopping habits, and satisfying unmet needs of specific consumers (Blazeska, 2013).

For several decades, retailers enjoyed high profits with low cost and relatively low quality offerings. The frequency of economic recessions caused a considerable increase in the interest for private label products. The empowered retailers, because of consolidation in retail landscape, enhanced retailer power over manufacturers in terms of branding and sales. With the enhanced retailer capabilities, the gap between the quality of private labels and national brands decreased. Thus, the traditional approach to developing low cost, generic products is no longer suited to the new retailers and todays’ sophisticated consumers with high expectations.

To sum up, retailers, aiming to keep up with changing consumption habits, need to concentrate on building powerful private label brands that will guarantee loyalty and enduring long term relationship. Thus, retailers need to develop their marketing muscles for not only attracting new customers but also retaining existing ones. Since failure in customer satisfaction is inevitable, retailers should learn to manage customer dissatisfaction.

To date, the extant research on customer dissatisfaction and complaint behavior was relatively silent regarding private label brands. Thus, this study aims to discuss the importance of managing customer complaints for private label brands. Besides summary of literature on customer complaint management, evolution and evaluation of private label brands is discussed. It is believed that retailers originally are less concerned with the dissatisfaction and complaints about their private labels. Accordingly, existing research on complaint management is generally based on consumer perspective. This study aims to provide evidence from retailers’ perspective and employs in depth interview method. The retailer companies’ managers interviewed for the current study support the need for changes in private label brand strategies towards a more customer oriented perspective.