What is Economic Private Label

The aim of this chapter is to evaluate the success of private labels positioned as economic and premium from the customer perspective in the retailers that have different positioning strategies. For this aim, two retailers that positioned themselves at the opposite ends on the price and service quality axes and a product category were identified along with a national brand. The research used between-subjects design and data were collected from customers of both retailers via a questionnaire. The success rates of economic and premium private labels were compared between the two retailers. The results indicate that both economic and premium private labels are more credible and favorable in retailers with superior service quality. On the other hand, the customers of the retailer positioned at low price have more tendencies to purchase economic private labels than the customers of the other store, whereas the customers of the retailer positioned at superior service quality have higher tendency to purchase premium private labels than the customers of the other store.