How manufacturer brand erosion shapes consumer assortment perceptions

Chunyu LI, Yongfu HE, Ling PENG, Denghua YUAN*

*Corresponding author for this work

Research output: Journal PublicationsJournal Article (refereed)

Abstract

Purpose
Recently, the popularity of store brands has resulted in some manufacturer brands being removed from shelves. The current literature lacks empirical work on the effect of manufacturer brand erosion on consumer assortment perception and repatronage intention. Based on signalling theory, the purpose of this paper is to manufacturer brands play a signalling role and contend that manufacturer brand erosion has detrimental effects on the assortment perception due to reduced signalling efficacy.

Design/methodology/approach
A 3 (low manufacturer brand erosion vs high manufacturer brand erosion vs manufacturer brand dominance) ×2 (assortment size: small vs large) between-subject experiment was conducted.

Findings
Manufacturer brand erosion exerts a negative effect on assortment attractiveness and consumers’ repatronage intention; the greater the erosion, the larger the negative effect. These negative effects are mediated by reduced consumer perceptions of assortment quality and variety. A large (vs small) assortment size attenuates the negative effect of manufacturer brand erosion by improving perceived assortment quality.

Practical implications
To engage in strategic positioning through efficient assortment management, retailers should cooperate with brand manufacturers, instead of promoting their own private labels. Nevertheless, a large assortment dominated by store brands signals that the retailer has built a strong private brand, which in turn gains a differentiation advantage.

Originality/value
This paper is among the first to take the signalling perspective and explicitly investigate whether and how manufacturer brand erosion exerts a significant impact on assortment perception.
Original languageEnglish
JournalAsia Pacific Journal of Marketing and Logistics
DOIs
Publication statusE-pub ahead of print - 17 Dec 2019

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Bibliographical note

his research received funding from National Natural Science Foundation of China (No. 71902044); Natural Science Foundation of Guangdong Province (No. 2019A1515011232); and Featured Innovation Grant of Guangdong Education Department (No. 2018WTSCX031).

Keywords

  • Assortment quality
  • Assortment variety
  • Manufacturer band erosion
  • Repatronage intention
  • Store brand

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