Executive summary of “The impact of copycat packaging strategies on the adoption of private labels”

Citation

(2015), "Executive summary of “The impact of copycat packaging strategies on the adoption of private labels”", Journal of Product & Brand Management, Vol. 24 No. 6. https://doi.org/10.1108/JPBM-09-2015-945

Executive summary of “The impact of copycat packaging strategies on the adoption of private labels”

Article Type: Executive summary and implications for managers and executives From: Journal of Product & Brand Management, Volume 24, Issue 6

This summary has been provided to allow managers and executives a rapid appreciation of the content of this article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefits of the material present.

Recent decades have witnessed significant changes in the retail landscape. Among these changes, the most radical has been the emergence of private label brands (PLBs). In their relatively short history, such offerings have moved from being widely regarded as cheap and inferior alternatives to becoming viable competition for even the most established manufacturer brands. As many consumers now regard PLBs to be comparable to leading brands, it has become the norm for such brands to be marketed on quality and status as well as price.

Store brands have established a presence in most product categories and achieved high penetration rates within the USA and many European countries. The impact has been so considerable that retailers view PLBs as an effective means to differentiate offerings and secure consumer loyalty. That PLBs are exclusive to the retailer concerned helps achieve these objectives. Investment in such brands has grown significantly, in part to counter the efforts of national brands to retain market share through innovation initiatives.

Research has additionally shown that consumer perception of PLBs can be influenced by the packaging strategies used by the retailer involved. The use of “copycat” tactics is purported to be especially significant, despite the fact that few studies have directly addressed the practice.

The shape, size, color, image and lettering associated with packaging can help shape consumer attitude to products. These attributes can generate “rich brand associations” and capture attention by increasing the visual appeal of the offering. It is even argued that packaging serves to advertise a product and inform consumers in advance about what the product offers to them. Packaging can also impact on consumer-brand relations, certain scholars claim.

In previous work which considered copycat packaging, studies have examined how an experience with a PLB can impact on perceptions of the “original brand”. The notion of “perceptual confusion” was also raised as being a possible response to the use of similar packaging on national brands (NBs) and PLBs. However, none of this earlier research has established whether or not use of these copycat strategies increases the likelihood of PLBs being preferred by consumers.

Coelho do Vale and Verga Matos thus investigate this in the present study. According to some researchers, leading brands have previously used “distinctive packaging” to help sustain the perceptions of superiority over PLBs. Consequently, a key proposal is that retailers can benefit through the “stimulus generation effect” which occurs when packaging on PLBs mimics that used by manufacturer brands. This term describes the process whereby certain features of the NB also become associated with the PLB.

Another suggestion is that package similarity will prompt consumers to assume that the NB manufacturer also produces the PLB which resembles it. It is thus proposed that this helps to improve quality perceptions of PLBs. Another reason is that the own label brand is viewed as incorporating key positive attributes of the manufacturer brand. Likelihood of consumers choosing the PLB increases accordingly. Given the spontaneous nature of many grocery purchases, this is deemed important for retailers.

The authors contend that product category type might moderate the impact of copycat strategies. It is argued that impact will be more positive with products of a functional or practical nature relative to hedonic purchases. Consumers are more emotionally involved with the latter and thus less prone to rely on heuristic cues to make purchase decisions.

Prior to the main study, research was conducted to prove the existence of the “copycat phenomenon”. It was found that PLBs were present in 661 different product sub-categories and that nearly half were packaged similarly to respective original NBs. Detergents, drugs, drinks and personal hygiene were categories exhibiting the highest percentage of copycats. Conversely, the phenomenon was much lower for house care and pet food products.

In the first of two studies, 40 students took part in an experiment testing whether packaging similarity impacts on product quality perceptions. They were exposed to products identified as belonging to categories where copycat penetration was high. Six combinations involved an NB and a PLB using copycat packaging, while the other six combined an NB with a PLB using its own packaging. Stimuli used were pictures of real products presented in random order. Subjects were asked to compare product pairs based on quality perceptions, package similarity and whether they felt the same manufacturer produced the items.

Analysis confirmed that consumers believe that quality of PLB is similar to that of NB when copycat packaging as opposed to its own-brand packaging is used. This supports the belief that copycat packaging strategies can boost quality perceptions of store brands. Consumers are also more likely to suppose that PLBs originate from the same manufacturer when such packaging strategies are deployed. Such assumptions also impact on quality perceptions of PLBs.

The aim of the second study was to test how different packaging of PLBs impact on purchase behavior for hedonic and utilitarian products. Females aged between 21 and 54 accounted for 27 of the 28 subjects chosen. To participate, individuals had to be responsible for household grocery purchases, buy store brands frequently and use shopping lists.

After providing details of their shopping behavior, respondents were given a task which involved making purchases from the Web site of a fictitious new supermarket chain. They were provided with a shopping list containing 22 products, equally divided between hedonic and utilitarian product categories. Pilot studies determined the respective choices. Each category contained three NBs and one PLB. Copycat packaging and own-label packaging were used for PLBs. Participants were informed that PLB quality was comparable to choices in the usual stores they frequented.

Data indicated that use of a copycat strategy increased the likelihood of consumers choosing PLBs. Marginal support was also found for the belief that this probability is greater still for utilitarian products. Packaging choice had little significant influence where hedonic products are concerned. It was additionally concluded by Coelho do Vale and Verga Matos that copycat packaging might benefit the NB as well as the PLB. The rationale behind this is that the copied brand attracts more attention than other available brands and thus has greater chance of being chosen. This supports earlier claims of “spillover effects” to brands which are not being imitated.

The authors claim that findings here can help retailers determine categories where use of copycat packaging can be most productive. Marketers of NBs are reminded that stopping the practice will be difficult, especially given the subjective nature of perceived similarity. They are therefore advised to emphasize how they invest more substantially on innovation and differentiate their brands from PLBs on this basis. Reminding consumers that similar packaging does not alter their superior attributes and quality of their products can further reinforce this message. This strategy is especially recommended in categories where PLB penetration is high or growing fast.

Researchers might conduct similar studies in different nations to investigate cultural influences and levels of experience with PLBs. Variation in economic conditions is another factor to consider as a likely influence on consumer adoption of retailer brands. Market maturity of PLBs could impact on the effectiveness of copycat packaging, which may also vary between different retail channels and over time.

To read the full article, enter 10.1108/JPBM-03-2015-0846 into your search engine.

(A précis of the article “The impact of copycat packaging strategies on the adoption of private labels”. Supplied by Marketing Consultants for Emerald.)