Culture and marketing strategy in discount retailing

Retail development and activity in transition economies is the context for this paper. The paper examines if differences exist in how retailer brand attitudes and store loyalty are realized across cultures. The objective is to contrast the Estonian situation with that of a typical Western country, Canada. Retail service quality (personal service and store organization), pricing and location express retail marketing strategy. This article focuses on retail marketing strategy. The article examines if the same structural model of the brand formation process applies to both cultures. To make the comparison meaningful, the article describes a study covering discount or low-price department stores. Confirmatory factor analysis tests the equivalence of constructs across cultures, and structural equation modeling with AMOS software was used to estimate the overall model of retailer brand formation. Retail service quality is a pivotal variable in the brand formation model.