Understanding premium private labels: A consumer categorisation approach

• Consumers categorise premium private labels as more similar to national brands in terms of quality.
• In terms of value for money premium private labels more closely resemble value private labels.
• This combination of good value and quality suggests potentially a powerful position.
• Past experience with a value private label strengthens the categorisation into brand tiers.
• This categorisation is stronger in the UK than in the US or Australia.

Worldwide premium private labels (PPLs) are a new and rapidly growing phenomenon. However to date, little is known about consumers' perceptions of these newer entrants relative to other brand types. Therefore it is difficult for marketers to understand the opportunities and threats created by this new generation of brands. This study examines the ways in which consumers categorise PPLs compared to more traditional value private labels (VPLs) and national brands (NBs) on the three dimensions of quality, value for money and trust. The data includes seven packaged goods categories in three countries, the United States, the United Kingdom, and Australia. The findings show that PPLs sit on a separate island, in between VPLs and NBs in consumer memory. While consumers generally view PPLs as a separate subgroup of brands, PPL are connected to other subgroups in that they are perceived to have the value characteristics of VPLs but quality characteristics of NBs. Finally, consumers with past experience with VPLs have a stronger ability to categorise PLs into distinct brand tiers.