Factors contributing to the propensity to purchase retailer's brand: the mediating effect of perceived value

The retailing industry is one of the largest sub-sectors that contribute to the Malaysian economy. In retailing, apart from carrying manufacturer brands, some retailers also market products using their own brands known as private label brands (PLBs) or retailer’s brands. Retailer’s brands hold a substantial share of consumers’ wallets and their popularity is still growing as they spread into various product categories and quality tiers. Due to the high pressure of the cost of living in Malaysia over the past few years, consumers with low to middle incomes started preferring
low cost products for their daily use. In fact, the scenario becomes the main reason for the growth in the demand of retailer’s brands or PLBs. By using the stimulus-organism-response (SOR) framework, this study was conducted to examine the influence of consumers’ perceptions on product quality, risks and retailer store image on the propensity to purchase retailer’s brands. This study also examined the mediating effect of perceived value on the relationships between perceived product quality, retailer store image and perceived risk, and the propensity to purchase retailer’s brands. This study was conducted at three main retail stores, namely
TESCO, AEON BIG and GIANT in the northern region of Malaysia, namely; Penang, Kedah and Perlis. It involved 301 respondents via the mall intercept survey for data collection. The PLS results showed that perceived product quality and retailer store image were positively related to the propensity to purchase retailer’s brands. Perceived risk was non- significantly related to the propensity to purchase retailer’s brands. Perceived value acted as a mediating effect on the relationship between perceived product quality and retailer store image on the propensity to purchase retailer’s brands. Theoretical and managerial implications, as well as suggestions for future research and limitations are discussed.