Anocha Aribarg, University of Michigan

(Co-authors: Neeraj Arora, University of Wisconsin; Ty Henderson,

University of Texas and Youngju Kim, Korea University)

Based on paper published in

Private Label Imitation of a National Brand:

Implications for Consumer Choice and Law

Brand Imitation

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Brand Imitation ≠ Counterfieting

Counterfeit products are fake replicas of the real product.

These replicas would bear the exact same brand name as the

real product.

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Brand Imitation by Private Labels

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Legal Aspects of Brand Imitation

Brand Confusion

Brand source and affiliation

Survey-based measurement

Initial Interest Confusion

The brand captures the consumer’s early attention

Helps gain crucial credibility during initial stages of search

No well established method to measure it

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Research Questions

From the legal standpoint …

Can Initial Interest Confusion be assessed?

Can we help develop better metrics to quantify “harm”?

From the theoretical standpoint, how does brand imitation

impact the consumer choice process?

Effects on brand consideration and brand preference?

Spill-over effects on other brands not being imitated?

Important moderating factors?

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Our Methodology

We use a combination of discrete choice experiments and

statistical modeling

A hierarchical Bayes consider-then-choose model

Separates brand consideration from brand preference

Allows for heterogeneity across individuals

Helps quantify shifts in brand share

Choice experiments were conducted among Usamp online

panel’s participants.

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Pilot Study

Consumers use brand name, label design, and package shape

to judge similarity (Hupman and Zaichkowsky 1995; Miceli and

Pieters 2009; Ward et. al. 1986; Warlop and Alba 2004)

Focus on:

hand sanitizer (Purell)

bottled water (FIJI)

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Example: Attributes for Hand Sanitizer

Name Label Design Package Shape

High

Similarity

Low

Similarity

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Study 1: Establishing the Effects

Study 1A Study 1B

Low

Similarity

High

Similarity

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Attributes and Levels: Hand Sanitizer

Attribute Study 1A Levels

Brand Purell

Germ-X

Private label

-Cleanse (Low similarity)

-Purify (High similarity)

Aloe Original

With Aloe

Price: Top-tier brand (Purell) $4.25

$4.00

$3.75

Middle-tier brand (germ-X) $3.75

$3.50

$3.25

Private label $3.25

$3.00

$2.75 11

Conjoint Choice Experiments

Twelve choice tasks

Across tasks, the brands were shown in the same position but aloe and

price levels were varied.

Low Similarity Condition High Similarity Condition

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Main Findings: Hand Sanitizer

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Net Effect on Share: Hand Sanitizer

14 Share equalizing price cut=56¢

Attributes and Levels: Bottled Water

Attribute Study 1B Levels

Brand FIJI

Aquafina

Private label

-Splash (Low similarity)

-MAUI (High similarity)

Low Plastic Regular bottle

Low plastic bottle

Price: Top-tier brand $1.39

$1.29

$1.19

Middle-tier brand (Aquafina) $1.19

$1.09

$0.99

Private label $0.99

$0.89

$0.79 15

Main Findings: Bottled Water

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Net Effect on Share: Bottled Water

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Share equalizing price cut=19¢

How Consumers View the Category

How do you view these three brands?

Each brand in its own category

Two brands in one category and one brand in the other category

All three brands in one category

For the participants that checked the second option (two brands in one category), we asked how they categorized all three possible combinations of brand pairs. Which two brands are in one category?

FIJI & Aquafina

FIJI & MAUI

Aquafina & MAUI

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Perceptions of Category Structure

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Study 2 & 3: Moderating Factors

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Study 2 Study 3

Low

Similarity

High

Similarity

Absence of the Imitated Brand PL Offered by Well-known Retailer

Main Findings: Absence of Imitated Brand

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Net Effect on Share: Absence of Imitated Brand

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Share equalizing price cut=13¢

Main Findings: Well-Known Retailer

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Net Effect on Share: Well-known Retailer

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Some evidence of “reactance” towards well-known retailers.

Summary of Results

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Brand imitation positively affects brand consideration (initial

interest confusion) and preference for the imitating private

label.

Brand imitation changes how consumers view products in the

category.

May harm other national brands not being imitated.

Harm quantified by share shift and share equalizing price cut

Brand imitation can backfire when its is carried on by a

reputable retailer.

Legal and Managerial Implications

Legal Implications: Beyond “brand confusion”– a process level understanding of brand

consideration and brand preference

Our proposed approach helps demonstrate the presence of “initial

interest confusion”: The legal system does not quite know how to

quantify it

We quantify harm in terms of (i) decline in brand premium the

imitated brand can charge (or WTP) and (ii) brand share loss for the

imitated brand

Brand managers: Brand imitation can adversely affect all national brands, even those

that are not being imitated.

Brand imitation may not be a good strategy for a reputable retail

brand

Using “Compare to” is a fair and honest way to inform consumers

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