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Summary Of An Academic Article In Marketing

1016 words - 4 pages

Pursuing the value-conscious consumer: Store brands versus national brand promotions Journal of Marketing; New York; Jan 2001 Kusum L Ailawadi; Scott A Neslin; Karen Gedenk The study presented in the article tries to determine if national brand promotion is in direct competition against store brands because both share the same distribution channel. Thus, the main question is: are manufacturers and retailers rather competitors or partners? The national brands usually sell for around 30 % more than store brands, but this pre-mium often is offset by national promotions that offer discounts from 20 to 30 %. If national brand promotions and store brands attract the same value-conscious consumers then manufac-turers and retailers compete for the same market segment. On the other hand it is also possible, that national brand promotions and store brands may satisfy different consumer needs, al-though the price of both may be similar.The article divides national brand promotions (= deal usage) into in-store-promotions and out-of-store-promotions. In store promotions are used opportunistically and passively, and includes displays or in-store specials. Out of store promotions include coupons, in-store flyers and are actively considered before the consumer goes shopping. Thus the three behaviours of interest are store brand use, in-store national brand promotion use, and out-of-store national brand promotion use.The study is based on a survey that consists of interviews of 319 adults and focuses on national brand promotions and store brands at the same time which has rarely done before. It first develops a structural model in order to examine the relationship of demographics and psychographics with deal- and store brand usage. Therefore 15 psychographic variables are identified and their hypothetical influence on store brands, in-store- and out-of-store-promotion are anticipated. Afterwards the links between psychographics and the corresponding demo-graphics are taken under closer consideration. Therefore seven demographic characteristics are recognized as important and their correlations with the psychographics are uncovered.The next part of the study determines if the differences in national promotion usage and store brand usage leads to different market segments. Therefore a cluster analysis is carried out which groups the consumers into the four following segments: deal-focused, store brand-focused, deal and store brand users, and nonusers of both store brands and deals.The authors found, that manufacturers and retailers do not compete for the same market segment, because store brand usage and deal usage (,especially out-of-store promotion usage) are different behaviours, driven by different psychographics. A main difference in both user groups is that national promotion users are characterized by psychographics mostly related to hedonic benefits, such as exploration and self-expression whereas store brands may not provide hedonic benefits to the same...

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