Memory for Private Label Versus National Brand in Feature Advertising

Abstract

Feature advertising is perceived to be the most cost-effective way to deliver information that would influence consumers’ store choice. Retailers increasingly use store flyers as a common form of feature advertising. Promotions featured in store flyers represent two sources, manufacturers and retailers, who pursue different objectives—support sales of National Brands (NBs) and increase store traffic and PL sales, respectively. Store flyers design implies a very difficult trade-off between promoting PLs or NBs. The aim of this study was to examine whether featuring PLs vs. NBs on flyers is equally effective in terms of memory. We found that free recall and recognition—commonly used as proxies of memory—did not differ between PL and NBs. For retailers, this means that despite the different presence in terms of flyer space, featuring PL is as effective as NB in terms of flyer space allocation. We also explored the association between memory and customer characteristics, an area of investigation that has not specifically covered PL feature advertising before. Flyer proneness and loyalty to the retailer were discovered to be significant predictors of—respectively—NBs free recall and PL recognition. These findings support the relevance that customers characteristics play as far as memory for feature advertising is concerned. Retailers and manufacturers are therefore encouraged to segment the audience for flyers and target different segments with versions of the flyer that place different emphasis on NB or PL.