Exploration of the Role of Packaging Design for Multi-tier Private Brands: An Abstract

Abstract

Retailers have increasingly implemented multi-tier private brands (PBs hereafter), making them one of the hottest trends in the retail industry. However, multi-tier PBs are surprisingly under-researched, and specifically, few researchers have investigated the role of visual cues such as packaging design. Thus, this paper investigates how packaging design employed in multi-tier PBs drive differing consumers’ perceptions, evaluation, and responses.

Study 1 tested the differing impact of packaging design. The data with US consumers recruited Amazon M-Turk was used to test the proposed model. The results supported that packaging design of PBs serves as an important evaluation cue for perceived quality and brand equity of multi-tier PBs even when controlling for price consciousness. Specifically, aesthetic and luxury designs evoked significantly higher quality perception and brand equity than did value design. In addition, quality perception enhanced brand equity and purchase intention but brand equity positively affected purchase intention only in the aesthetic packaging design condition.

Study 2 investigated whether individual traits (i.e., visual processing) may interplay driving differential responses to the same PBs. Visual processing is chosen as they are pertinent to extrinsic, visual cues such as packaging design. The results showed that the impact of packaging design on consumer responses is greater for those with a high level of visual processing than for those with a low level of visual processing. Also, quality perception and brand equity positively affected consumers’ choice of PBs over NBs offered in the same product category.

Comprehensively, the findings of this research contribute to the PB literature that primarily has focused on price and quality perception. As an initial attempt in this context, we show that aesthetic appeal of PBs’ packaging design can be a major differentiating attribute for consumers’ inferences about the product and purchase intention for multi-tier PBs. Also, we address a boundary condition of such effects by integrating an individual trait, visual processing. Future research is guided to test the same model with national brands or with more PBs to enhance the generalizability of the findings.