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The Impact of Copycat Packaging Strategies on Private Labels‘ Adoption
Coelho do Vale, Rita, Catholic University of Portugal, Católica Lisbon- School of Economics and Business,
Portugal
Verga Matos, Pedro, Technical University of Lisbon, ISEG, Portugal
Introduction
Private Labels have been gaining increasing importance throughout the world (Kumar & Steenkamp, 2007) with store
brands being present on almost every product category (Geyskens, Gielens, & Gijsbrechts, 2010). Private labels (PL)
are estimated to account for one of every five items sold every day in USA (Ailawadi, Pauwels, & Steenkamp, 2008),
representing around 20% of the average purchases made worldwide (Lamey, Deleersnyder, Dekimpe, & Steenkamp,
2007). Nowadays we are assisting to a proliferation of segmentation strategies at the level of private labels (Kumar &
Steenkamp 2007), indicating that retailers are not just competing on price, but instead are trying to conquer a significant
market share traditionally owned by manufacturers. From an initial focus on price, private labels have moved to a
quality positioning, and more recently, to a status orientation positioning, extracting benefits from the retailers‘ ownbrand
image (Steenkamp, Heerde & Geyskens, 2009).
Anecdotal evidence suggests that the stiff competition between national brands and private labels has led many retailers
to adopt packaging strategies very similar to the ones developed and used by national brands, often named copycat
strategies, eventually hoping to benefit from positive associations held by consumers regarding these brands. Since
packaging can affect consumers‘ perceptions of products, increase consumers‘ perceptions of quality (Butkeviciené
Stravinskienė & Rūtelionė, 2008) and strengthen the consumer-brand relationship (Underwood, 2003), it is of great
relevance to understand the impact of these copycat packaging strategies on consumers‘ behavior.
The present research analyzes the impact of copycat strategy adoption by retailers on consumers‘ product quality
perception and decision-making process, assessing to what extent the adoption of this type of strategies reveals to be
beneficial for the retailers, enhancing likelihood of PL adoption.
Private Labels and Copycat Packaging Strategies
Previous research has focused in different private labels (PL) aspects as competitive price interaction (Coterill, Putsis &
Dhar, 2000; Putsis, 1997; Steiner, 2004), private labels‘ growth across different categories (Hoch & Banerji 1993), the
impact of specific promotional tools on private label penetration (Sethuraman & Mittelstaedt, 1992), the link between
private label performance and economic conditions (Lamey et al., 2007; Quelch & Harding, 1996), and the impact of
private labels share on store loyalty (Ailawadi et al., 1998).
Main results from these studies are quite diverse and disperse. While Coterill et al. (2000) found a negative relationship
between national brand-private label price differential and private label market share, Putsis‘ findings (1997) indicate
that successful private label penetration lowers the average price of branded products. On a different perspective,
Lamey et al. (2007) findings indicate a negative, but asymmetric, relationship between consumers‘ proneness to adopt
private labels and economic cycles.
Despite these studies, there are still several unanswered questions about this prevalent phenomenon in consumers‘
shopping reality. It seems therefore of special relevance to analyze one of the factors that may have a strong impact on
the PL adoption: retailers‘ packaging strategies for their store brands.
This research analyzes the influence of different private-label package formats on consumers‘ decision-making process
and consumers‘ quality perception. More precisely, we are interested in assessing the impact of introduction of private
labels as ―copycats‖ in the market. To our knowledge there are no studies that address the consequences of such
marketing strategy in terms of consumers‘ quality perception, attitudes and purchase behavior.
Packaging is a significant marketing tool that can influence consumers‘ attitude towards a product. Several studies
outlined that the packages‘ characteristics as shape (Folkes, Martin, & Gupta, 1993; Raghubir & Krishna, 1999), size
(Coelho do Vale, Pieters, & Zeelenberg, 2008; Wansink, 1996), and brand logo location (Lans, Pieters, & Wedel, 2008)
can affect the way consumers evaluate and choose the products. We predict that the adoption of packaging visual
characteristics similar to the ones of national brands can lead to a stimulus generalization effect with features associated
with the national brand manufacturer being generalized to the private-label (Burshteyn & Buff, 2008). This would mean
that consumers can transpose from the national brands that are being imitated a set of characteristics to the private labels
that adopted the copy cat strategy. In our current framework we predict that as compared with an own-branding PL
packaging strategy, the adoption of copycat strategies may increase consumers‘ PL quality perception, which may
enhance consumers‘ likelihood of purchase of PL.
Studies
We examined our predictions in four studies. In study 1 we conducted a field-study in which we assessed the level of
penetration of copycat strategies in order to analyze if there was evidence in the market for this kind of phenomenon.
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