The purpose of this study is to investigate the price perception, perception of quality, attitudes toward consumer conviction value and intention to buy private label. Seven hypothesis were developed and tested using the data collected from consumers who have tried private labels in Indonesia. The Data was analyzed by SEM to test all the hypotheses. Four of all hypothesis were significant. The novely of the model gave proof that consumer conviction value could be a bridge of the research gap between attitudes and intention to buy. Perception quality of private label towards intention to buy was rejected from this empiric research. The empiric research gives a challenge for private label to further improve the quality of their products to align with the national brands and then it can increase intention to buy private label.
Generally, companies give their products’ brand with national label or private label (Dawes & Nenycz-Thiel, 2013). Private labels are often used by retailers, sellers or distributors, in which they are known as home brands, store brands or own label brands (De Wulf, Odekerken-Schroder, Goedertier, & Van Ossel, 2005). Usually, private labels will use the name of the retailers, sellers or the distributors (Boyle & Lathrop, 2014; Hyman, Kopf, & Lee, 2010; Walsh & Mitchel, 2010). Beneke and Carter (2015) defined private label brands as brands sold exclusively through certain retailers. (see Fig. 1). Increasing of modern retailers' growth, employers must find chances and creativities towards their competitive excellences and catch the society's intention by shopping in their retailers. Private label does not develop only in Indonesia, Ngobo (2011) explained that the use of private labels becomes very important in some countries in Europe including Switzerland (54%), Germany (40%), and France (32%). One of creative and innovative efforts is by selling a number of their own brands (private label). Supermarkets have increased the use of private labels in their marketing strategies (Pepe, 2012). Private labels become the source of benefit for the supermarkets and threaten national brands (Quelch & Harding, 1996). Some researchers explained that private label could increase the consumers' decision to buy (Nies & Natter, 2012), increase store loyalty, control distribution channel and increase consumers' loyalty (Ailawadi & Keller, 2004; Ailawadi & Steenkamp, 2008; Levy & Weitz, 2007; Patti & Fisk, 1982; Richardson, Jain, & Dick, 1996). The more increasing of private labels’ quality will increase the store market (Sudhir & Talukdar, 2004), market share (Erdem, Zhao, & Valenzuela, 2004), store image (Nies & Natter, 2012) and intention to buy private label (Richardson et al., 1996; Semeijn, Van Riel, & Amrosini, 2004). Private label is also able to increase the competitiveness (Corstjens & Lal, 2000). Private label will increase store loyalty and profitability compared to national brands (Collins-Dodd & Lindley, 2003) through increasing gross margin (Corstjens & Lal, 2000; Ward, Shimshak, Perloff, & Harris, 2002).