Satisfying Customers Through Premium Private Labels

Private labels (PLs) are continuously increasing their presence and evolving their role in the grocery retailing business. It is especially the premium tier, the so-called Premium Private Label (PPL), that shows the most interesting market share increase and prospect of growth. In this context, the chapter explores the role of PPLs in generating customer loyalty to the retailer. Specifically, a theoretical model in which the drivers of customer satisfaction to the PPL - namely: perceived PPL quality, assortment, access, and value - are engendering customer loyalty to the PPL and, through its mediating role, generating customer loyalty to the retailer is proposed and tested. The empirical research builds on a survey with a sample of 299 retail consumers. A structural equation model was performed to analyze the data. Results show that PPLs positively impact customer loyalty to the retailer through a causal relationship driven by PPL perceived quality and PPL value.