engleski

Perceived quality as a determinant of private label success

Private labels have been present on the market for more than a century but they have experienced an intensive expansion in the last thirty years as a response to increasing power of producers and sharpening of competitive battle on the market. In the beginning retailers have introduced private labels as a cheaper alternative to strong manufacturer brands with the focus primarily on price and little attention paid to quality of private labels. This strategy has influenced customers to perceive private labels as lower quality products and cheap looking packaging has further reinforced that impression. Faced with intensified competition on the market, retailers have realized the importance of private labels as a differentiation and loyalty tool so they have changed their focus and started to invest in quality of private labels and their marketing position. Price was no longer emphasized as a major competitive advantage of private labels and focus shifted to providing additional value to customers. Since value is defined as ratio of perceived product quality relative to price, it can be concluded that for success of private labels perceived quality is often more important than the actual quality of the product. It has become clear that „the battle of the brands“ is fought on the perception level. Consumer perception of product quality is considered as one of the most important determinants of consumer behaviour in product selection and it can be defined as consumers' judgment of general excellence or superiority of products or as an evaluation of products based on its characteristics. Attributes which indicate quality can be divided on basic or intrinsic and intangible or extrinsic attributes. Intrinsic attributes of perceived quality are an inseparable part of the product, including physical characteristics of the product (colour, taste, smell, etc.). They cannot be changed without changing the product itself, and are used simultaneously with the consumption. Intangible or extrinsic attributes of perceived quality are related to the product, but are not its physical part, such as price, brand and advertising intensity. The aim of this paper is to analyze the concept of perceived quality and its attributes as determinants of private labels success with the goal of further intensifying research in this area. Research conducted for the purpose of this study is to investigate the perceived quality of private labels in Croatia and analyze which attributes of perceived quality have the most influence on success of private labels in Croatia.

perceived quality; private label

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