Creating and seeking "value" in supermarkets: Three essays
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As consumers become more and more value conscious as well as sophisticated in searching for more value in what they buy, it becomes necessary for retailers to understand and offer the right value proposition sought by their consumers. This dissertation consists of three essays that investigate how consumers seek value, and how retailers create value proposition through their own label store brands. Specifically, the first essay focuses on understanding the store patronage behavior of consumers who seek value through store brands. Here we investigate whether store brands help in building store differentiation and loyalty besides catering to value conscious consumers. We also analyze the moderating effects of household spatial configuration, store brand quality and category characteristics on the store differentiation ability of store brands. In the second essay, we explore the consumer value seeking tendency during economic downturns. Here, we investigate the dynamics in consumer brand preferences and response sensitivities during the recent Great recession to understand the factors driving high store brand shares and to infer the long run consequences of recession time consumer behavior. We find that persistence in store brand shares post recession are driven by the combined effects of persisting marketing mix sensitivities, inertia and preference updation due to learning. In the third essay, we study the brand level impact of the entry of Wal-Mart supercenter. We further investigate whether offering increased value proposition through economy store brands will help a retailer in competing against supercenters. We demonstrate that store brands could be effective tools even when competing with value mass merchandisers like Wal-Mart supercenters.