Retail brands in the emerging Malaysian market

Abstract

Currently one of the most controversial innovations in grocery retailing in Malaysia is the introduction of retail brands. A retail brand can be defined as a product that retailers sell under their own brand name. These products may bear the name of the retailer selling them, such as 'Giant', 'Tesco' and/or 'Tesco Value', 'Carrefour', or may be sold under an entirely different name such as 'Aro'. The introduction of this brand may have a great impact particularly on consumer belief, which can lead to the modification in the relative efficacy of retail strategies for the hypermarkets concerned. This study provides a new opportunity for retailers particularly to reassess their retail strategies in order to gain a larger market share. Although Malaysia's grocery retailing was and still is dominated by manufacturers' brands, it is argued that developing a strong retail brand strategy can play an important role in competing and sustaining in the global market. Using one thousand systematic random samples from store-intercept technique from two major hypermarkets in Malaysia, this research investigates several attributes of retail brands that may affect consumers' overall perceptions. In addition, issues such as the situational factors, the shopping motives as well as the image of the store are also considered. Results are analysed and presented which show that while retail brands offer a lucrative market for retailers, as evidenced in the UK, retailers in Malaysia are struggling with these brands. The market indicates that Malaysia is more influenced by the manufacturers' brands. Malaysians perceived retail brands as inferior to manufacturer brands. In addition, certain aspects of the Tesco brands were not perceived as well as the Giant and the manufacturer brands. There is also some evidence suggestive of consumer confusion regarding the Tesco brand because it was introduced after, and possibly influenced by perceptions of the Tesco Value brand. The results also indicate some tactical problems being faced by Tesco. In addition, although situational factors, shopping motives as well as store image, provide significant relationships, the impact on the overall retail brands' perceptions is not strong. This demonstrates that consumers very often do not use explicit, concrete, rational factors to evaluate retail brand products, and thus their perceptions and motivation to purchase are not always easy to articulate. Nonetheless, the results conclude with an opinion of the responsibility that retailers could take in the delivery and strengthening of the advantage offered by retail brands. Retailers should convey their retail brand benefits' more on product functionality thus improving the brand attributes on a gradual basis; expanding on the retail promotion strategies; offering innovation and receptivity in-store environment; projecting store reputation clearly and finally managing their retail brands efficiently. It is argued that retail brands are not just about fulfilling basic consumer needs. Retail brands possess great power and the truly great retail brands will be those that learn to balance this power with responsibility. Incorporating a solid understanding of all aspects of consumer behaviour could assist retailers in their retail brand strategy. Hence, concentrating on one retail brand at a time in a store might be an ideal strategy for an immature market such as Malaysia.