Consumer Perception Towards Private Label Brands of Four Key Supermarkets in Kenya

Abstract

Supermarket owned products are gaining popularity in Kenya and giving local manufactures of well-known brands a run for their money. With this new trend, manufacturers of other brands are not only competing amongst themselves but are now faced with a bigger challenge of competing with their distributing partners. However, private label branding is not a new idea in the world, but has been a common business practice in the United Kingdom and United States of America. This introduction of private label brands by Nakumatt, Tuskys, Naivas and other chains has seen some manufacturers of traditional brands crying foul since they have been by-passed in the conventional production chain. In addition, store branded products are taking over shelves and key display positions which is deemed by a few as unfair competition. However, this could be a strategy by the retail chains to increase consumer loyalty in their outlets even as competition since completion among the retailers is getting stiffer by day. In January 2013, Nakumatt, the biggest supermarket chain in Kenya, introduced its private label brand; Blue Label. Each of their products has a distinctive blue band implying the supermarket‟s commitment to delivery of high quality products. Other key retail chains including Tuskys, Naivas, Uchumi and Ukwala have also adopted this global trend especially on edibles including bread, milk, rice and sugar. The primary aim of the study was to determine consumer perception towards private label brands of the four key supermarkets in Kenya including Nakumatt, Tuskys, Naivas and Uchumi. The researcher did a critical analysis on the variables within consumer perception of private label brands such as brand awareness, perceived price and quality, consumers switching behaviour and the impact of pricing on consumers‟ choice for private label brands. From the findings of this study, the researcher was able to ascertain that consumers are aware of private label brands and the key purchase driver is price. Perception towards private label quality, availability, display on shelf and pricing was positive as most consumers still had an intention of purchasing the brands. The study also gives suggestions for further research on the future of these private label brands.