This research examines the effects of physical proximity (close vs distant) of retailers’ private label brands (PLBs) relative to national brands (NBs) and brand display orientation (horizontal [brands occupy the same shelf] vs vertical [brands occupy different shelves]) on consumers’ PLB quality perceptions and PLB evaluations.
Two experiments involving real brands in different product categories tested the hypotheses.
A PLB positioned close (vs distant) to a NB is evaluated more favorably and this effect is mediated by increased PLB quality perceptions, but only in a horizontal brand display. In a vertical brand display, a PLB positioned close (vs distant) to a NB is evaluated less favorably and this effect is mediated by decreased PLB quality perceptions.
The findings suggest that to enhance consumers’ PLB quality perceptions and evaluations, PLBs be positioned next to (rather than on separate shelves) and close to (rather than distant from) NBs in the same product category.
Although the literature suggests that the best shelf position for PLBs is close to NBs, there is a lack of empirical research on the effects of relative shelf positioning on consumers’ quality perceptions and subsequent PLB evaluations. This research finds that both physical proximity and brand display orientation play an important role.
