Evaluating Emerging Indian Retail Scenario: Consumer Preferences, Perceived Risks, and Uncertainties – Store Brands vs. National Brands

Evaluating Emerging Indian Retail Scenario: Consumer Preferences, Perceived Risks, and Uncertainties – Store Brands vs. National Brands

Shivali Pande (Indian Institute of Management Bangalore, India) and Aishwarya Narayan (National University of Singapore, Singapore)
Copyright: © 2019 |Pages: 25
DOI: 10.4018/978-1-5225-7208-4.ch014


Globalization seems to have achieved ultimate penetration—the plethora of choice a consumer faces in any given product or service is only a testament to the fact. Worldwide, consumers are presented the options to choose between store brands (or generic/local brands, as they are sometimes known) and national brands. The choices consumers make are reflective of their perceptions about either brand and thus provide an insight into the perceived risks that consumers associate with store or national brands. This risk creates an uncertainty of consumer base and threatens the stability of market shares for brands. The chapter aims to study the various perceived risks consumers associate with brands across two product categories: consumer goods and hedonic goods. Consequently, solutions to change consumer perceptions or brand strategies have been provided so that brands may be able to reduce perceived risk associated with themselves and create a stable consumer base.
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A vast majority of literature exists between the period 1994-2006, likely when the prevalence of store brands as a viable buying choice became widespread in developed countries as the US, UK and Germany. Most research is limited to studies in developed countries (Baltas, 1997). India’s consumer culture had not yet caught up to this trend by this point, especially not to the extent that it demanded in-depth research into the matter. One may wonder the point of looking into a supposedly outdated trend. In India, penetration of store brands is a relatively recent phenomenon, making the angle of related risk relevant today. The store brands as they evolve today, are important competitors to existing national brands. This chapter may hence be considered a call to re-open investigation regarding the competition between store and national brands, in an Indian context.

Key Terms in this Chapter

Hedonic Goods: These are goods which are desirable and yield satisfaction or a sense of happiness to the consumer but cannot be termed as necessities. The social and emotional value of these goods exceeds the utilitarian value.

Pricing Strategy: The use of price changes and discounts to manage the appeal and preference for products to achieve certain levels of sales and profits.

CO-Opetition: The phenomenon of several entities (store brands and national brands in this case) competing in an area where they must co-exist for sustenance.

Retail Market: It refers to the interactions between buyers and sellers of goods in market space.

Consumer Purchasing Behavior: It refers to the decision-making process of consumers wherein they choose from the multiple products and varieties available in order to meet their needs, minimize costs and maximize satisfaction. The behavior is reflective of consumers preferences, nature and budget constraints.

Value Perception Management: The techniques used to influence a consumer’s perception about the value that any product offers by controlling product features, prices, advertisements, packaging, etc.

Consumer Goods: These are typically mass-market items that consumed out of necessity rather than want. Their utilitarian purpose is of greater importance than social or emotional appeal.

Perceived risk: Any adverse view that consumers associate with a product based on the perception they have formed about it. Any perceived risk is viewed as leading to a plausible loss that consumers will bear from consumption.

Private Label: Products under these labels are manufactured by a third-party (usually national brand manufacturers) under contract but sold by label owners (retailers) under their brand names and identities.

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