An investigation of consumers' perceptions of in-house food brands in Durban's major food retailers.

Abstract

The term in-house brands refers to products that are sold to retail outlets where the store name appears on the packaging instead of the manufacturer’s name or brand name (Brickman, 1988:24). The introduction, presence and behaviour of such brands, has added a significant dimension to the marketing of food products. In-house food brands have been around in South African supermarkets for almost fifteen years and consumers long regarded such products as “cheap and nasty generic substitutes for the real thing rolled out by retailers during recessions and discarded once the economy picks up again; however, times have changed and so has the quality standards of such products. High quality in-house brands are now found in retail outlets some of them commanding premium prices. Some market observers still attribute the growth and success of in-house food brands to hard economic times whilst others believe that this growth trend is here to stay and will continue to grow because in-house food brands now provide acceptable quality at reasonable prices. Consumers are giving less importance to manufacturer brands and retailers are becoming more proficient at managing their in-house brands. In this study, research was conducted to investigate consumers’ perceptions of in-house food brands in Durban’s major food retailers. To evaluate how consumers perceive the prices, and quality of in-house food brands. To evaluate the influence of in-house brands positioning on consumers’ purchasing decision, to determine market factors which are influencing consumers in respect of in-house brands, to investigate consumers’ loyalty to such products as well as the categories which consumers prefer and finally to investigate if there is any relationship between consumers’ disposable income and their loyalty to consume in-house brands. The literature review assisted in placing this study into context and preparing for the collection of primary data to answer the research questions. Consumers around Durban’s Commerce and Business District participated in this study and responded to a questionnaire that focused on the consumers’ perceptions regarding the areas mentioned above. The findings from the analysis of data show that consumers are drawn to purchase inhouse brands because of the low prices, the quality of in-house food brands has been raised to acceptable levels, in some cases retailers are offering premium quality in-house brands, favourable positioning of in-house brands has an influence on consumers’ decision to purchase in-house brands, consumers no longer see in-house food brands as substitutes because the quality of such products is now very good, and finally, the study found that there is no relationship between consumers’ income levels and their loyalty to in-house food brands. The recommendations that were made to in-house brands retailers were that: in-house brands retailers should invest more in innovation, research and development, they must come up with attractive packages, they should compete with manufacturer brands on both quality and prices and not just on prices alone and they must increase product visibility through creative product positioning. It was also recommended that future studies should be undertaken to study the factors that need to be taken into consideration before in-house food brands are introduced so as to avoid in-house brand failure.