Outcomes of Private Label Programs: Brand Loyalty, Supply Chain, & Cost Management

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Title: Outcomes of Private Label Programs: Brand Loyalty, Supply Chain, & Cost Management
Author: Bruer, Shanna Michelle
Advisors: Mark Messura, Committee Member
Dr. Barry Goodwin, Committee Member
Dr. William Oxenham, Committee Member
Dr. Michelle Jones, Committee Co-Chair
Dr. Nancy Cassill, Committee Co-Chair
Abstract: Private labels have become an increasingly important part of the retail apparel industry; however, the reason(s) for which they have been added to firms' portfolios has not been thoroughly researched or discussed in the academic or industry literature. The motivation for and outcomes of private label implementation at retail was therefore the focus of this study. The purpose of this research was to determine the reasons for which private label, programs are employed by retailers. The research focused on two potential rationales: 1) internal outcomes, which are defined by the researcher as those that are primarily controlled by the firm through internal actions that seek such results as greater control over the supply chain and costs, and 2) external outcomes, though influenced by the firm, are ultimately determined by the consumer as brand loyalty. The review of literature offered an explanation of the progression of logic used in the conceptual framework for this study. Additionally, it examined the current literature available in academia and industry. The conceptual model began with the generic competitive strategies offered by Porter (1990), was narrowed to a single strategy through Aaker's (1998) success factors of differentiation and Barney's (2002) differentiation tools, finally the focus of the study was on the potential outcomes of a brand offered by Keller (1998). The methodology used in this study consisted of three phases. Phase I used a deductive research design (quantitative). The goal of the deductive analysis was to determine the level of, and differences between, the loyalty associated with national and private label brands. In order to accomplish this goal, STS longitudinal panel data was employed. The sample consisted of 12,254 denim jean purchasers. Phase II used an inductive research design (qualitative). The inductive phase was used to expand upon the findings from phase one, as well as gain data on the internal outcomes associated with private label brands. In order to accomplish Phase II a case study methodology was employed. The two-page discussion guide was developed by the researcher and was used to acquire depth of information on the three outcomes, as well as uncover potential rationales for program implementation. The sample consisted of thirty companies from the following five sectors: fiber, fabric, apparel manufacturing/marketing, apparel agents, and retail. The information collected from industry interviews brought a deeper level of understanding as to why private label programs are implemented at retail. Phase III was a co-interpretation of analyses from Phases I and II. The goal of this section was to visually depict the motivations for private label program implantation, relationships and communication within the supply chain, and outcomes of program participation for each sector. Quantitative results indicated that there is no greater loyalty associated with private label product than that of national brand. Further exploration of private label program drivers found that retailers and manufacturers were driven to private label programs by two additional motivations — supply chain management and cost management. From these results a private label apparel model was developed containing drivers for programs, communication amongst supply chain members, and outcomes of program implementation. The findings of this study are significant to both industry and academia when determining the best strategy for entering and improving private label programs.
Date: 2006-11-07
Degree: PhD
Discipline: Textile Technology Management
URI: http://www.lib.ncsu.edu/resolver/1840.16/4766


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