Linked vs. stand-alone – how focused and generic retailers should manage their private label (PL) branding strategy

When marketing private labels (PL), managers must decide between two PL branding strategies: 1) linking the PL with the respective retailer’s brand name (linked PL branding strategy) or 2) avoiding any link between the PL and the retailer’s brand (stand-alone PL branding strategy). To improve retailers’ PL branding strategies this paper is the first considering the degree of specialization as a moderator. While focused retailers have a widely homogenous product portfolio (i.e. high degree of specialization), generic retailers do not have any focus on a specific product category (i.e. low degree of specialization). An online experiment with a 2 (PL branding strategies) ×2 (degree of specialization) ×2 (PL tier: economy vs. premium) between-subjects design with 358 participants was conducted. As a result, the moderator degree of specialization has a significant impact in combination with the PL branding strategies and the PL tier, demonstrated by a significant three-way interaction. Thus, for focused retailers, our findings suggest that a linked strategy may be more favorable for premium PLs, whereas a stand-alone strategy could be more appropriate for economy PLs. For generic retailers, the results indicate that a stand-alone PL branding strategy might be more effective for both economy and premium PLs.