The reason why consumers pay more for national brand than store brand

Abstract

In the past decade, the development of private brands has generated a lot of research, covering a wide range of topics. However, as far as we know, previous studies have not solved these problems. This research analyzes the reason why consumers are willing to pay the premium for national brands than store brands, and the result of it can also contribute to the dearth of literature. "The distribution of price premium or reservation price differential has also been of substantial interest to analytical modelers (Rao, 1991) in determining equilibrium pricing and promotion strategies." Understanding consumers' perception of national brands and store brands, helps marketers or manufacturers to find the implications for marketing and promotion strategies to satisfy consumer behaviors, particularly recognizing the importance of national brand equity and the appropriate setting of its price difference.