Private Labels (PL) are a modern success story. Their share of wallet peaks about 40 percent in Switzerland, UK and Spain. Most Western European countries have values around 30 percent and in the USA they achieve about 20 percent. Nowadays, most retailers have a three-tier PL portfolio consisting of economy, standard and premium PL. The premium quality tier is usually the latest addition, but its success differs significantly by retailer. Hence, many retailers are still looking for ways to make their premium PL more appealing to customers. One relatively new approach is celebrity co-branding. That is the combination of a premium PL and a celebrity brand. Our study finds that celebrity co-branding improves consumers’ quality perception of a focal product, increases store image and also quality perceptions of the remaining multi-tier PL portfolio. We suggest to account for these image spillover effects when the success of these products is evaluated.
Authors: Olivier Reimann, Udo Wagner