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Retail brand equity: Conceptualization and measurement

Magali Jara a,n, Gerard Cliquet b

a University of Nantes, Institute of Technology of Saint Nazaire, LEMNA (Laboratory of Economics and Management of Nantes Atlantique), EA 4272, 58, rue Michel Ange, 44600 Saint

Nazaire, Franceb University of Rennes 1, Graduate School of Business Administration, CREM (Centre of Research in Economics and Management), UMR CNRS 6211, 11, rue Jean Mace, 35708 Rennes

Cedex 7, France

a r t i c l e i n f o

Available online 17 November 2011

Keywords:

Brand awareness

Brand equity

Brand image

Path-PLS

Retail brand

Retail brand personality

a b s t r a c t

This article focuses on retail brand equity to understand where this retail brand value stems from and

how to measure it. A conceptual framework is defined based on Keller’s contributions about brand

equity. A qualitative methodology and a confirmatory analysis enable the conception of a model. This

one is tested through structural equation modeling with Path-PLS. Results show that retail brand

awareness and perceived quality explain the most significantly retail brand equity. Retail brand

personalities and retailers with particular managerial values have also a significant influence. Hence,

the performance of retail brands depends on the same factors as those of other brands.

& 2011 Elsevier Ltd. All rights reserved.

1. Introduction

There is a tendency today towards an increasing perceivedquality level of retail brands in many countries (e.g., Huang andHuddleston, 2009; Kumar and Steenkamp, 2007; Quelch andHarding, 1996). Qualitative innovation,1 sophisticated packagingand a wide range of retail brands � from generic products tovalue-innovator retail brands (Kumar and Steenkamp, 2007) �can create consumer value through real retail brand marketing(Ailawadi and Keller, 2004). One of the sources of retail brandsuccess is perceived quality,2 which leads to store differentiationand store loyalty (Burt and Sparks, 2002; Corstjens and Lal, 2000;Halstead and Ward, 1995; Richardson, 1997; Rondan Catalunaet al., 2006). Retail branding policies have been developedthroughout Europe and, more specifically, in Belgium, the Nether-lands, Switzerland and the United Kingdom (Oubina et al., 2006).However, retail brand policies developed by European retailersseem to differ both from one country to the next as well as fromone retailer to another within the same country (Johansson andBurt, 2004).

This paper studies the situation of retail brands in France,which is at an intermediate performance level of retail brands in

Europe between the United Kingdom (probably the mostadvanced) and Italy (among the least developed) if we considercomparable countries. In 2005, retail brands in Europe had a 23%share across 17 markets (Lybeck et al., 2006), which is about thesame rate as in France, whereas this rate is much higher in the UK.For example, 51.9% of Sainsbury’s and 50% of Tesco’s3 sales comefrom their retail brands. The growth rate of retail brands (þ5%) istwice the growth rate of manufacturer brands, which is about 2%(Lybeck et al., 2006). So retail brands continue their penetration,and they represent a dynamic perspective of development forretailers (Corstjens and Lal, 2000). It focuses on retail brandequity to understand both where this retail brand value stemsfrom and how to measure it in the French retail context.

The retail brand equity concept is a recent view of the valuecreated by retail brands. Few articles have focused on it (Swobodaet al., 2009). So, we define a model of retail brand equity based onAilawadi and Keller’s propositions (2004) and we test it empiri-cally. In other words, the first objective of this research is toconceptualize retail brand equity, i.e., to identify the maincomponents that create and maximize the value of this brand.We use Keller’s model as a primary conceptual framework, andwe pose the following assumption: the cognitive process used byconsumers to perceive brands is the same between retail brandsand manufacturer brands. However, as retail brands seem to becloser to service brands, a new model is proposed to revealspecific dimensions of retail brand equity. The second objectiveaims to confirm the validity of the measures of these componentsthrough a confirmatory analysis using a partial least squares (PLS)

Contents lists available at SciVerse ScienceDirect

journal homepage: www.elsevier.com/locate/jretconser

Journal of Retailing and Consumer Services

0969-6989/$ - see front matter & 2011 Elsevier Ltd. All rights reserved.

doi:10.1016/j.jretconser.2011.11.003

n Corresponding author.

E-mail addresses: Magali.jara@univ-nantes.fr (M. Jara),

gerard.cliquet@univ-rennes1.fr (G. Cliquet).1 Many retailers’ innovations indicate the need to build strong positioning for

their brands. For example, Sainsbury’s proposes pizza pies with curry; Carrefour

the wash liquid in doses; Boot’s (health and beauty products) launches giant

effervescent pastilles for the bath, etc.2 Lybeck et al. (2006) showed that retail brands’ quality no longer enables us

to consider retail brands as cheap alternatives to national brands. 3 Private Label Magazine, 2009 (www.privatelabelmag.com).

Journal of Retailing and Consumer Services 19 (2012) 140–149

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approach. Expected contributions of this work are both concep-tual and managerial.

Because of a dearth of literature on retail brand equity, thisresearch first attempts to provide theoretical contributions onhow to conceptualize and measure this concept. Adapting thebrand equity concept to retail branding is then of interest for newperspectives to define value components and develop retail brandpositioning strategies.

The article is organized as follows. In the first section, Keller’sconceptual framework of brand equity is adapted to retail brandsin order to suggest a theoretical retail brand equity model andhypotheses. In the second section, a confirmatory analysis verifiesmeasure reliability as well as convergent and discriminant valid-ity of the main retail brand equity components. In the finalsection, we test hypotheses and theoretical nomological validity.Results are finally discussed in conclusion, including researchperspectives.

2. Retail brand equity and hypotheses development

A retail brand equity model is proposed from Keller’s model(1993) in order to define the main hypotheses of the research.

2.1. Keller’s brand equity model applied to retail brands and main

hypotheses

Keller (1993) defines brand equity as ‘‘The differential effect ofbrand knowledge on consumer response to the marketing of thebrand’’. He suggests that consumer assessments concerning aproduct with a brand name should be compared to an unnamedproduct (without a brand). Comparing these two products couldthen explain the preference, the intention to buy or even the finalconsumer choice. Keller considers two general components, brandawareness and brand image, and defines them as follows: ‘‘Brandawareness relates to the likelihood that a brand name will comein mind and the ease with it does so’’ and ‘‘brand image is definedhere as perceptions about a brand as reflected by the brandassociations held in consumer memory’’. Hence, two componentsdetermine brand awareness: brand recognition, which requires abrand well known by consumers that means coming to mindspontaneously, and brand recall, which tests consumers’ ability toremember brand names according to a specific product category.These brand associations form the meaning of the brand inconsumers’ minds. However, these associations are not homo-geneous. Currently, three categories of brand associations emerge(distinguished by the level of abstraction of the association):

– Brand association with attributes corresponding to ‘‘descrip-tive features that characterize the product’’. These differencesstem from the direct performance of the product, for example:price information, packaging appearance and brand personal-ity4 are non product-related attributes, unlike ingredients.

– Brand association with benefits corresponding to ‘‘the personalvalue consumers attach to the product attributes, that is, whatconsumers think the product can do for them’’. Three cate-gories of benefits can be distinguished: functional benefitsobtained from physical product-related attributes; experien-tial benefits from product-related attributes such as sensorypleasure, variety and cognitive stimulation; and symbolic

benefits from non product-related attributes such as personalexpression and social approval.

– Brand association with attitudes corresponding to ‘‘consumers’overall evaluations of a brand’’, which are important becausethey can explain consumer behavior (e.g., brand choice). Theyare also related to both product benefits (attributes andfunctional and experiential benefits) and symbolic benefits. Acorrect specification or identification of associations is diffi-cult, and the real attitude concept can be misidentified. That iswhy attitude is usually considered as a general componentindependent of other associations (Srinivasan, 1979).

According to Keller’s model (1993), brand equity occurs ‘‘whenthe consumer is familiar with the brand and holds some favor-able,5 strong6 and unique brand associations in memory’’. Basedon this approach, general relations between constructs in buildingbrand equity can be determined. However, the content of eachconstruct must be adapted to the specific context of retail brands.

From the Keller’s approach, we formulate four main hypoth-eses applied to retail brands:

H1. Retail brand awareness positively and directly influences theconsumer’s response (retail brand choice and intention to buy)towards the retail brand.

H2. Retail brand awareness positively and directly influences theretail brand image, or more precisely:

H3. Retail brand image positively and directly influences theconsumer’s response (retail brand choice and intention to buy)towards the retail brand, or more precisely:

H4. Retail brand image is a mediator variable in the relationshipbetween retail brand awareness and the consumer’s response(retail brand choice and intention to buy).

Before testing these previous hypotheses, retail brand imageconcept must be defined precisely. This concept is indeed multi-dimensional and specific for each object of research. To do so,literature review about service brands and an exploratoryresearch are used.

2.2. Retail brand image in a retail brand equity model

Retail brands differ from manufacturer brands because retail-ing is a service business (Berry, 1986, 2000). As retail brands arelinked to a real store, their brand image should include associa-tions with the store image (Ailawadi and Keller, 2004; Burt, 2000;Burt and Sparks, 2002; Fullerton, 2005).

2.2.1. Retail brands as service brands: impacts on the retail brand

image construct

As a service brand, nothing links a retail brand to a product (aswith manufacturer brands and consumer packaged goods) exceptfor the retail company and its stores. As defined from theliterature on service brands, a service brand is composed oftangible attributes (product-related) and associations related tothe experience with the company (intangible attributes; Berry,2000; Blankson and Kalafatis, 1999; Brodie et al., 2009; DeChernatony and Riley, 1999; De Chernatony et al., 2003;Hardaker and Fill, 2005; Padgett and Allen, 1997). Hence, aservice-brand building process implies a holistic approach based

4 Brand personality is an important factor for differentiating product-branded

items, because ‘‘metaphorical and symbolic vocabularies available are much

richer’’ (Biel, 1992). Moreover, brand personality enables us to capture a brand’s

levels of abstraction.

5 Dacin and Smith (1994) argued that ‘‘the favorability of consumers’ predis-

positions toward a brand is perhaps the most basic of all brand associations and is

the core of many conceptualizations of brand strength/equity’’.6 The strength of brand associations depends on the quantity of associations

evoked by consumer.

M. Jara, G. Cliquet / Journal of Retailing and Consumer Services 19 (2012) 140–149 141

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on a corporate view of the brand. In retailing, stores characterizethe retail company to which they belong; the store is the productof the company (Dicke, 1992). As many articles suggest, storeimage impacts retail brand image (Ailawadi and Keller, 2004; Burtand Mavrommatis, 2006; Burt and Sparks, 2002; Collins-Doddand Lindley, 2003; Grewal et al., 1998; Kozinets et al., 2002;Richardson et al., 1996; San Martin Gutierrez, 2006; Semeijnet al., 2004).

Unlike retail brands, the image of stores or the experiencewithin the stores does not influence manufacturer brands(Richardson et al., 1996). Four dimensions of store service (bothphysical and psychological dimensions) can impact the image ofservice brands (Eiglier and Langeard, 1987; Morrison and Crane,2007): 1) the physical elements (e.g., modernity, cleanness); 2)employees’ connections with customers; 3) the other clients(insofar as they contribute to the atmosphere of the store); and4) the service itself, stemming from interactions between thethree previous dimensions. The important role of the employeesis the common dimension among research on service brands(Berry, 2000; Blankson and Kalafatis, 1999; Brodie et al., 2009; DeChernatony and Riley, 1999; De Chernatony et al., 2003; Hardakerand Fill, 2005). Interactions between employees and consumersare determinant in the service brand’s success.

Based on these previous contributions, we can define retailbrand equity on similar elements as in any manufacturer brandwith an associated service component and a corporate dimensionincluding managerial values/symbols (Burt and Sparks, 2002) andretailer personality (Ambroise et al., 2003). These two previousdimensions explain why we propose an adapted model for retailbrands. Fig. 1 displays this model and shows that retail brandequity includes specifically experiential benefits related to storeservice, retailer personality and managerial values/symbols.

Because of a dearth of literature on retail brand equity, wedescribe here the techniques used to specify the content of eachconstruct of the model and specifically the retail brand imageconstruct.

2.2.2. Specify the content of retail brand image: items retrieval by

qualitative Methods

Because retail brands differ from manufacturer brands, aqualitative approach must be used. Thus, to identify specificitems of each theoretical component, 54 in-depth interviewswere conducted with familiar consumers of retail brands of thisresearch. Free association tasks and laddering techniques are used

to collect retail brand image associations and to understandconsumers’ motivations to purchase retail brands (Keller, 1993;Reynolds and Gutman, 1988). Content analysis results from theseinterviews enable completion and specification of the first step ofconceptualization (suggested from Keller’s work in 1993) of theretail brand equity.

From this method all components of the retail brand equitymodel are specified. Associations related to the product effectinclude ingredients, composition, financial benefits (‘‘retail brandsenable me to save money’’), qualitative (taste), psychologicalbenefits (‘‘thanks to the retail brand, I make a good deal’’; ‘‘I trustwhen I buy the retail brand’’) and positive attitude (i.e. ‘‘I like thisbrand’’).

The associations related to external attributes concern therecall of the brand name through a clear signature of the brandname on packaging. These associations can be summarized bythis way: facilitate decision-making and facilitate the brandlocation (because consumers know that the retail brand of thisresearch represents the middle range positioning). Characteristicslike attractiveness (colors, photos, design), information (aboutingredients, origin, y) and practical packaging (easy to take, toopen and to preserve) are also included in this category ofassociations.

The associations related to the store service are retail brandanimations/tests, promotions on retail brands, cleanness andmodernity of the store, retail brand visibility on shelves, retailbrand in-store visibility, rigor of merchandising and personnel(skills and availability).

The last associations deal with retail brand personality andretailer personality (completed with its managerial values andsymbols). Based on a list established previously (Ambroise et al.,2003), these associations are submitted to consumers. Onlyassociations cited more than twice are used (Dickson andAlbaum, 1977).

2.2.3. Items selection

A first questionnaire was designed to enable us to revise someitems and to test the strength of associations. Only associationsthat score greater than 3, on average, in a five-point Likert scaleare retained (see the Appendix). Despite an average value under 3(2.88) the variable ‘‘low price’’ is kept because of the importanceof price in the retail brand choice. Then, the final questionnaire isoperationalized using Likert scales because attitudes and opinionstowards brands are measured.

RETAIL BRANDAWARENESS

CONSUMER’SRESPONSE

(Brand choice, intentionto buy)

RETAIL BRANDIMAGE

-Tangible attributes-Functional and

experiential benefits-Positive attitude

-Experiential benefitsrelated to store service

-External attributes-Symbolic benefits

-Retail brand personality-Personality and

managerialvalues/symbols of

retailer

H1

H3H2

Fig. 1. Retail brand equity framework.

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A total of 504 familiar consumers were interviewed in threedifferent areas, each of them corresponding to one of the threeretailers under study: Carrefour, E.Leclerc and Intermarche,selected after discussion with these retailers. The consumerssample was clustered in three groups: under 30 years, 30–50years and over 50 years (because perceptions could vary with lifestep). More details about the sample characteristics are presentedin the Appendix. A principal component analysis is conducted toreveal only latent constructs of the retail brand image because ofits multidimensionality.

2.2.4. Latent constructs of the retail brand image

Results provided by SPSS software show that data can be reducedto a few components because KMO and Bartlett’s test areacceptable (KMO¼0.843). After a Varimax rotation, we identifyseven components. The total of variance explained is around 69%(Table 1). The following variables have been removed because theircommunalities are under 0.5: ‘‘practical packaging’’ (commu-nality¼0.482), ‘‘informative packaging’’ (communality¼0.352) andlow price (average¼2.93).

The main component of the retail brand image is ‘‘personal-ities’’ (42.92% of the variance), including retail brand personalityand personality of the retailer and its symbols. Some componentsmight have been altered because they conceptually belong to thesame dimension. The variables ‘‘physical appearance of store’’,

‘‘store policy’’ and ‘‘store service’’ form a common dimension andbelong to the same nomological network, which can be named‘‘store service’’. At the end of this step, these five componentsrepresent the five latent variables of the retail brand image:personalities, price image, perceived quality, store service andbrand service. Based on these exploratory results, a confirmatoryanalysis is necessary to test finally the retail brand equity model.

3. Confirmatory analysis: validity of constructs

We conducted all confirmatory tests through a PLS (partialleast squares) modeling process because constructs are bothformative7 and reflective (Chin, 1998; Diamantopoulos andWinklhofer, 2001; Grace and O’Cass, 2005; Gudergan et al.,2008; Haenlein and Kaplan, 2004; Temme and Hildebrandt,2007) and this method is often used in a predictive way whichcorresponds to the managerial issues of this research.

3.1. Reliability and convergent and discriminant validities before

testing the model

The nature of latent variables is a key issue in testing reliabilityand convergent validity. Are they reflective or formativeconstructs?

3.1.1. Validity procedures of reflective constructs

To test the reliability of reflective variables, the statisticalprocess followed the paradigm of Churchill (1979). Thus, we useCronbach’s Alpha (a) and Joreskog Rho (r) as indicators ofreliability. At the confirmatory step, each reflective constructwas correctly measured [(a and r40.75), Nunnally andBernstein (1994)]. Table 2 depicts these indicators for eachreflective latent variable.

Table 1Seven components of retail brand image.

Components and variables Loadings afterVarimax rotation

Variance (%)

Real Internal

Component I: personalities– Unique retailer personality

– Symbols of retailer

– Common retailer personality

– Common brand personality

– Unique brand personality

0.768 29.663 42.92

0.726

0.689

0.659

0.604

Component II: price image– Adequate price

– Financial benefit

– Psychological benefit 2

– Value for money

– Psychological benefit 1

0.802 11.253 16.28

0.758

0.672

0.604

0.498

Component III: physical appearance of store– Modernity

– Cleanness

– Rigor of merchandising

0.803 7.077 10.24

0.786

0.710

Component IV: perceived quality– Attitude towards retail brands

– Taste

– Appealing packaging

0.756 6.176 8.94

0.698

0.588

Component V: store policy– Visibility in-store

– Visibility on shelves

– Promotions of retail service brands

0.856 5.535 8

0.761

0.723

Component VI: brand service– Facilitate the decision-making

– Facilitate the location of the brand

0.875 4.835 7

0.867

Component VII: store service– Personnel skill

– Personnel available

0.843 4.576 6.62

0.811

Total 69.117 100

Table 2Reliability indicators for reflective latent variables (XLSTAT PLSPM software).

Components and variables CronbachAlpha

JoreskogRho

Component I: personalities– Common brand personality

– Unique brand personality

– Symbols of retailer

– Unique retailer personality

– Common retailer personality

0.811 0.871

Component II: price image– Psychological benefit 2

– Value for money

– Common retailer personality 1

– Financial benefit

– Adequate price

0.800 0.863

Component III: brand service– Facilitate the decision-making

– Facilitate the location of the brand

0.890 0.948

Component IV: consumer’s response– Intent to buy the retail brand

– Retail brand choice

0.722 0.946

7 Chin (1998) suggested that it is theoretically possible to use formative

variables in LISREL (covariance-based SEM technique), but it may have a variety of

problems.

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The test of convergent validity requires two additional criteria:communalities (between observed variables and their latentconstruct) and Average of Variance Explained (AVE).

Since communalities were under the threshold of 0.5 (Table 3),we used the bootstrap method to check the validity of each value(Bastien et al., 2005). After this procedure, all communalitiesreached the recommended level. The Average of VarianceExplained was also correct (0.621).

Discriminant validity assessment is meaningful only whenlatent variables are reflective (Bagozzi, 1994; Diamantopoulos,1999). Therefore, correlations among indicators must be high andpositive (this is not the case for formative variables). To demon-strate that latent variables measure different constructs, discri-minant validity is shown for all latent variables in this researchonly when there is no correlation between all latent variables(o0.5). Table 4 indicates low correlations between all latentvariables (o0.5). Therefore, latent variables of the retail brandequity model could be considered separate dimensions.

3.1.2. Validity procedures of formative constructs

Based on several papers, certain latent variables can beidentified as formative constructs, leading to different measuresof reliability (Diamantopoulos and Winklhofer, 2001; Jarvis et al.,2003; Coltman et al., 2008).

Three latent variables are formative constructs: ‘‘perceivedquality’’, ‘‘store service’’ and ‘‘awareness’’. For all of them, man-ifest variables are heterogeneous, and they seem to be causesrather than reflections of the construct (Bagozzi and Fornell,1982; Bollen, 1989). Moreover, respective correlation matrixdepicts the lack of correlation between manifest variables(Bollen and Lennox, 1991).

The reliability of formative variables is tested by following theprocedure suggested by Diamantopoulos and Winklhofer (2001).,8

At the end, weights and correlations must vary in the same way tovalidate the formative constructs. Three variables were finallyremoved: ‘‘modernity’’, ‘‘promotion’’ and ‘‘cleanness’’. Table 5depicts for each variable its external weight, which indicates thatall formative latent variables are stable.

The second step suggested by Diamantopoulos and Winklhofer(2001) concerns external validity. The correlations of each indi-cator are compared to other latent variables, and only indicatorsthat are significantly correlated with the variable under studyshould be retained (Table 6). Table 6 illustrates that all indicatorsshow acceptable correlations with their latent variable.

All measures of the retail brand equity concept are thusempirically validated, leading to test the model (Fig. 2) structuredby four specific hypotheses:

H1 Retail brand awareness positively and directly influencesthe consumer’s response (retail brand choice and intention tobuy) towards the retail brand.

H2 Retail brand awareness positively and directly influencesthe retail brand image, or more precisely:

H2.1. Retail brand awareness positively and directly influencesthe perceived quality of the retail brand.

H2.2. Retail brand awareness positively and directly influencesthe price image of the retail brand.

H2.3. Retail brand awareness positively and directly influencesthe personalities of the retail brand and its retailer.

Table 3Communalities of reflective variables (XLSTAT PLSPM software).

Latent variable Observed variables Correlations Communalities Bootstrap

correlations

Lower

threshold (95%)

Higher

threshold (95%)

Price image Value for money 0.704 0.496 0.702 0.615 0.779

Adequate price 0.741 0.550 0.740 0.663 0.799

Psychological benefit 1 0.723 0.523 0.724 0.649 0.783

Psychological benefit 2 0.816 0.666 0.817 0.769 0.852

Financial benefit 0.743 0.551 0.740 0.673 0.799

Personalities Common brand personality 0.728 0.529 0.724 0.651 0.789

Unique brand personality 0.641 0.411 0.636 0.530 0.714

Common retailer personality 0.824 0.679 0.822 0.778 0.858

Unique retailer personality 0.809 0.654 0.808 0.754 0.846

Symbols of retailer 0.772 0.595 0.769 0.703 0.826

Brand service Facilitate the location of the brand 0.951 0.905 0.952 0.936 0.963

Facilitate the decision-making 0.948 0.898 0.948 0.930 0.962

Consumer’s response Intent to buy the retail brand 0.997 0.992 0.995 0.997

Retail brand is a regular choice 0.704 0.495 0.656 0.748

Table 4Discriminant validity of reflective variables (XLSTAT PLSPM software).

Awareness Price image Store

service

Brand

service

Perceived

quality

Personalities Consumer

response

AVE

Awareness 1 0.100 0.027 0.094 0.299 0.029 0.345 0.633

Price image 0.100 1 0.086 0.215 0.306 0.156 0.196 0.554

Store service 0.027 0.086 1 0.084 0.140 0.231 0.043 0.461

Brand service 0.094 0.215 0.084 1 0.204 0.095 0.149 0.901

Perceived quality 0.299 0.306 0.140 0.204 1 0.157 0.413 0.588

Personalities 0.029 0.156 0.231 0.095 0.157 1 0.110 0.577

Consumer response 0.345 0.196 0.043 0.149 0.413 0.110 1 0.749

AVE 0.633 0.554 0.461 0.901 0.588 0.577 0.749 0

8 Formative measures are difficult to validate because of a dearth of literature.

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H2.4. Retail brand awareness positively and directly influencesthe service given by the retail brand.

H2.5. Retail brand awareness influences positively and directlythe store service image.

H3 Retail brand image positively and directly influences theconsumer’s response (retail brand choice and intention to buy)towards the retail brand, or more precisely:

H3.1. Perceived quality of the retail brand positively and directlyinfluences the consumer’s response (retail brand choice andintention to buy).

H3.2. Price image of the retail brand positively and directlyinfluences the consumer’s response (retail brand choice andintention to buy).

H3.3. Personalities of the retail brand and its retailer positivelyand directly influence the consumer’s response (retail brandchoice and intention to buy).

H3.4. Service given by the retail brand positively and directlyinfluences the consumer’s response (retail brand choice andintention to buy).

H3.5. Store service positively and directly influences the consu-mer’s response (retail brand choice and intention to buy).

Table 5Final validation of formative variables (XLSTAT PLSPM software).

Latent variable Observed variables Correlations External

weight

(normalized)

Perceived

quality

Attitude toward retail brand 0.938 0.545

Appealing packaging 0.394 0.026

Taste 0.767 0.196

Store service Visibility on shelves 0.740 0.195

Rigor of merchandising 0.777 0.340

Visibility in-store 0.655 0.144

Personnel skill 0.657 0.315

Personnel available 0.541 0.006

Awareness Recognition 0.657 0.338

Recall 0.909 0.662

Table 6Cross loadings of indicators (XLSTAT PLSPM software).

Latent variable Observed variable Perceived quality Price image Personalities Store service Brand service Awareness

Perceived quality Attitude towards retail service brands 0.938 0.468 0.324 0.357 0.391 0.558

Appealing packaging 0.394 0.227 0.375 0.248 0.230 0.223

Taste 0.767 0.543 0.338 0.276 0.414 0.382

Store service Visibility on shelves 0.259 0.208 0.352 0.740 0.265 0.137

Rigor of merchandising 0.305 0.280 0.449 0.777 0.157 0.093

Visibility in-store 0.234 0.194 0.256 0.655 0.254 0.188

Personnel skill 0.242 0.140 0.333 0.657 0.176 0.042

Personnel available 0.225 0.142 0.415 0.541 0.125 0.034

Awareness Recognition 0.373 0.229 0.092 0.083 0.275 0.657Recall 0.499 0.275 0.166 0.136 0.233 0.909

CONSUMER’SRESPONSE

PRICE IMAGE

PERSONALITIES

STORE SERVICE

BRAND SERVICE

PERCEIVEDQUALITY

H1(+)

H3.1(+)

H3.2(+)

H3.3 (+)

H3.4(+)

H3.5(+)

H2.1(+)

H2.2(+)

H2.3(+)

H2.4(+)

H2.5(+)

AWARENESS

Fig. 2. Retail brand equity model and hypotheses.

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H4 Retail brand image is a mediator variable in the relation-ship between retail brand awareness and the consumer’sresponse (retail brand choice and intention to buy).

4. Results: the validation of the retail brand equity model

Findings of this research show that two main components canexplain the value created by retail brands: retail brand awarenessand retail brand image, which is composed of five sub-compo-nents (perceived quality, price image, personalities of the brandand retailer, brand service and store service). Hence, the objectiveis to identify the relevant components that maximize the value ofthe retail brand. To do so, hypotheses of the model and nomolo-gical validity are tested.

The four hypotheses are now tested in turn.

H1 is validated: Retail brand awareness positively and directlyinfluences the consumer’s response (retail brand choice andintention to buy) towards the retail brand (Figs. 3 and 4). Allstatistical indicators (R2, Goodness-of-Fit and Average of VarianceExtracted) show that this relation is significant.

H2 is validated: Retail brand awareness positively and directlyinfluences the retail brand image because for each component ofthe retail brand image, one can observe this influence. Moreover,all statistical indicators are significant (Fig. 5): H2.1, H2.2, H2.3,H2.4 and H2.5 are validated.

H3 is validated except for H3.5: Retail brand image positivelyand directly influences the consumer’s response (retail brandchoice and intention to buy) towards the retail brand (Fig. 6)through perceived quality (H3.1); price image (H3.2); personal-ities of the retail brand and its retailer (H3.3) and service of theretail brand (H3.4). H3.5, concerning store service, is not validatedand the relationship between store service and consumer’sresponse (retail brand choice and intention to buy) is negative.

H4 is partially validated: Retail brand image has a partialmediation between retail brand awareness and the consumer’sresponse (retail brand choice and intention to buy) because therelationship between awareness and consumer’s response isdifferent from zero (Baron and Kenny, 1986; see Fig. 6).

Based on this quantitative research, we propose a brand equitymodel adapted to retail brands. In other words, retail brands seemto embody several elements used to create and maximize theirvalue. We summarize the main results in seven points:

1) The two main components that explain the value created byretail brands are retail brand awareness and its perceived quality.Their influence on consumers’ behaviors are the most important(brand awareness¼0.331; perceived quality¼0.371).

2) Retail brand personalities and retailers with particular man-agerial values have a significant influence on consumers’behaviors (0.116) and are the only constructs that differentiateretail brand positioning. This construct is, in part, based onspecific associations that lead to unique position of the brandand retailer. The interest of the personality construct in thecreation of brand value is also proved in the case of retailbrand (Biel, 1992; Keller, 1993).

3) Store service is the only component that negatively influencesthe consumer’s response (�0.086). But this result must bemoderated at the product category and store levels becauseprevious research has shown that this negative relationshipcould be explained by the nature of the product (Semeijn et al.,

AWARENESS

PRICE IMAGE

PERSONALITIES

STORE SERVICE

BRAND SERVICE

PERCEIVEDQUALITY0.367

0.173

0.316

0.308

0.171

GoF = 0.871 ; AVE = 0.580Xlstat-PLSPM software

Fig. 4. H2 validation.

AWARENESS CONSUMER’SRESPONSE0.605

R2 = 0.367; GoF = 0.934 ; AVE = 0.697Xlstat-PLSPM software

Fig. 3. H1 validation.

CONSUMER’SRESPONSE

PRICE IMAGE

PERSONALITIES

STORE SERVICE

BRAND SERVICE

PERCEIVED QUALITY0.544

0.074

0.106

0.098

-0.098

R2 = 0.432; GoF = 0.926 ; AVE = 0.594Xlstat-PLSPM software

Fig. 5. H3 validation.

M. Jara, G. Cliquet / Journal of Retailing and Consumer Services 19 (2012) 140–149146

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2004) or by the nature of store (Baker et al., 2002; Ailawadiand Keller, 2004).

4) Price image influences positively consumers’ behaviors but itsimportance is less than previous components (0.079). Thisresult shows that the price positioning of retail brands isnecessary but it is not sufficient to create value in long-term.

5) The signature of the brand name (measured here by ‘‘brandservice’’ concept) enables consumers to facilitate their deci-sion-making and to locate the brand. Even if its influence islow on consumers’ behaviors (0.069), it creates additionalbenefits that can represent interesting axis of positioning.

6) Retail brand image is a partial mediator variable in therelationship between retail brand awareness and consumer’sresponse. Therefore, direct and indirect relationships coexist inthe retail brand equity model.

7) Previous results have shown that retail brand equity model isempirically validated. General relations of the model depictthat retail brand awareness influences positively the retailbrand image and the consumer’s response; and retail brandimage influences positively the consumer’s response.

So, general relations described by Keller (1993) are verified ina theoretical point of view. In other words, we can say thattheoretical nomological validity of the retail brand equity conceptis acceptable.

5. Contributions, limitations and research perspectives

Because of a dearth of literature on retail brand equity, thisresearch strives to provide theoretical foundations to conceptua-lize and measure this concept. Because retail brands can beconsidered service brands, a model of retail brand equity basedon Keller’s model (1993) is proposed, with corporate and servicedimensions added to Keller’s original model.

The exploratory research described in this paper aims tospecify components and their associations of retail brand image.To do so, 54 customers (qualitative research) and then 504consumers (quantitative research) are interviewed. From theseinterviews and Keller’s model, we derive a retail brand equitymodel that describes customers’ perceptions and behaviorstoward the retail brand. This model reveals that retail brandequity is a multidimensional concept composed of two maincomponents: awareness and positive retail brand image. Positive

retail brand image includes five sub-components: perceivedquality, price image, retail brand personality and retailer person-ality, brand service and store service. In other words, retail brandimage is composed of different components; some are directlyrelated to product-branding (creating no particular value to thebrand) and others are unrelated to product-branding but concernstore dimensions, retail brand personality, retailer personalityand managerial values/symbols. This result confirms previouscontributions on service brands. Retail brands are indeed servicebrands and their brand image is built on store dimensions.

Quantitative research reveals that, among these components,two are particularly determinant of the success of retail brands.Retail brand awareness and perceived quality systematicallyexplain the performance of the retail brand. Based on this result,one can say that retails brands are real brands because theirperformance depends on the same factors as the other brands.This result shows also that price positioning is not sufficientnowadays to develop a long-term relation with consumers. Basedon this research, advertizing investments must be pursued toreinforce the memory of the retail brand name and its distinctivefeatures. Because store image could have an influence on per-ceived quality of retail brands, managers should pay attention tostore atmospherics and all components of service delivered instore. However, it is important to maintain an appropriate priceimage with the discount positioning of the retailer: the morebeautiful the store, the more the perception that it is expensive(Baker et al., 2002).

Finally, results show that personality component has a sig-nificant influence on the consumers’ behaviors. In other words,retail brands build their image on symbolic associations thatcreate value for consumers. These associations could offer aunique axis of positioning for the retail brand. Hence, it seemsthat retail brands have reached a maturity step from a pureeconomic positioning to a brand positioning.

Adapting brand equity to retail marketing is a real managerialand strategic stake. This could be used by marketers to maximizethe potential value of their brands and to position them on alarger set of associations (because of the synergies of image).Building service brands on an extended set of associations canimprove differentiation and definition of a unique position inconsumers’ minds. So the last contribution concerns managerialissues: in order to help managers to identify the specific keys oftheir retail brand success this model should encourage them tobuild a long-term relationship with their consumers and define a

CONSUMER’SRESPONSE

PRICE IMAGE

PERSONALITIES

STORE SERVICE

BRAND SERVICE

PERCEIVEDQUALITY

AWARENESS

0.376

0.316

0.171

0.307

0.163

0.373

0.079

0.116

0.069-0.086

0.331

R2 = 0.516; GoF = 0.867 ; AVE = 0.595Xlstat-PLSPM software

Fig. 6. H4 validation.

M. Jara, G. Cliquet / Journal of Retailing and Consumer Services 19 (2012) 140–149 147

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unique axis for their positioning. They could finally use this modelto drive the retail brand performance by knowing the impact ofeach component on it.

However, this work presents some limitations. First, theexternal validity of results is questionable. Only three retailers,corresponding to three different hypermarkets, were selected inFrance for this research. Thus, they do not represent all strategiesin food retailing. Products chosen here were limited to just threeitems. Even if they reveal variations and precisions in the buildingof retail brand equity, they are not sufficient. Second, we needinternational comparisons both to define more precisely variousretail brand equity models and to identify common and specifickey factors of the success of retail brands for each country. Third,we should enlarge this research to specific products according totheir involvement level in consumer’s minds. At the conclusion ofthis extended research agenda, we could propose a benchmarkingtool that enables comparison of the efficiency of each brandingstrategy at national and international levels. Finally, retail brandequity could be appreciated at the store and the product categorylevels. Specific components of retail brand equity for each storeand each product category could emerge that could help man-agers in supporting their tactical and operational decisions.

Acknowledgment

The authors thank very much Mr. Alain Thieffry, former vice-president for marketing at Carrefour, for his helpful commentsduring the development of this research.

Appendix

See Tables A1 and A2 for more details.

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Table A1Variables of the model.

Associations related to the product effect include: Means

Attitude towards retail brands (i.e., ‘‘I like this brand’’) 3.48

Value for money 3.71

Adequate price 3.63

Low price 2.88

Taste 3.53

Psychological benefit 1 (thanks to the retail brand, I make a good deal) 3.30

Psychological benefit 2 (I trust when I buy the retail brand) 3.27

Financial benefit (retail brands enable me to save money) 3.24

Associations related to external attributes include:Facilitate the location of the brand 3.34

Appealing packaging 3.25

Practical packaging 3.46

Informative packaging 3.14

Facilitate the decision-making 3.36

Associations related to the store service include:Visibility on shelves 3.47

Rigor of merchandising 3.63

Visibility in-store 3.34

Promotion 3.02

Cleanness 3.76

Modernity 3.33

Personnel skill 3.40

Personnel available 3.10

Associations related to brand personality and retailer personality(completed with its managerial values and symbols). These associationsvary according to each retailer, which lead to specific and unique retailbrand positioning; therefore, they are not reported in this article.

Common brand personality 3.40

Unique brand personality 3.30

Common retailer personality 3.48

Unique retailer personality 3.35

Symbol 3.42

Table A2Sample characteristics.

Age Gender Retailers

Carrefour Leclerc Intermarche Total

o30 years old Male Number 28 27 33 88

% of total 16.8 16.2 19.8 52.7

Female Number 25 23 31 79

% of total 15.0 13.8 18.6 47.3

Total Number 53 50 64 167

% of total 31.7 29.9 38.3 100.0

30–50 years old Male Number 29 30 27 86

% of total 16.4 16.9 15.3 48.6

Female Number 31 34 26 91

% of total 17.5 19.2 14.7 51.4

Total Number 60 64 53 177

% of total 33.9 36.2 29.9 100.0

450 years old Male Number 25 26 24 75

% of total 15.6 16.3 15.0 46.9

Female Number 30 28 27 85

% of total 18.8 17.5 16.9 53.1

Total Number 55 54 51 160

% of total 34.4 33.8 31.9 100.0

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