EXAMINING PURCHASE INTENTION OF PRIVATE-LABEL BRANDS: THE MODERATING EFFECT OF BRAND CATEGORY

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EXAMINING PURCHASE INTENTION OF PRIVATE-LABEL BRANDS: THE

MODERATING EFFECT OF BRAND CATEGORY

Effly Juvita Andarini Yeshika Alversia Universitas Indonesia, Indonesia

Abstract: Private label is seen as a way to maintain profits, encourage consumption, and as a form of CSR for retail companies when empowering local small businesses. In its development, private labels have evolved into brands that pay attention to value and sustainability. A brand category in Indonesia involves SMEs as product suppliers for PLB. This study examines the influence of factors related to the store on the perception of private-label products produced by SMEs. This study collects online data from 441 Indonesian respondents who are Alfamart and Indomaret customers aged 18 or above and have shopped in the last 3 (three) months, using the non-probability sampling method with a purposive sampling technique. The collected data were tested using SEM Partial Least Squares analysis. The results reflect that store loyalty and brand image have a significant positive impact on attitudes toward buying private labels. In contrast, store loyalty and price consciousness have the least significant positive impact. On the other hand, perceived risk was was found to have a significant negative effect. The Brand Category was found to be moderating in Store Loyalty and Brand Image antecedent variables. This study is expected to be useful for academics and marketing practitioners by expand- ing private-label studies, especially in relation to SMEs as producers. Moreo- ver, retailers can consider involving more SMEs in their private-label business, which will positively impact society.

Keywords: Brand Category, Private-Label, Purchase Intention, SMEs

CITATION

Andarini, E. J. and Alversia, Y. 2023. Examining Purchase Intention of Private-Label Brands: The Moderating Effect of Brand Category. Jurnal Aplikasi Manajemen, Volume 21, Issue 3, Pages 842- 862. Malang: Universitas Brawijaya. DOI: http://dx.doi.org/10.21776/ub.jam.2022.021.03.20.

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843 INTRODUCTION

Private labels have become a strategy for retailers to maintain their business. Over time, this strategy continues to evolve and adapt to consumer relevance (Cuneo et al., 2019; Dixit and Mau- rya, 2021). Its development has become interest- ing for modern retailers who use private labels to encourage retail customer consumption. In 2020, when the COVID-19 pandemic occurred, the retail business was recorded as one of the resilient business sectors. Jiang and Stylos (2021) found that retail survives in adaptive and transformative ways to the challenges of the pandemic, including by adopting digital technology. Observations regarding retail in the pandemic era are truly inseparable from the existence of private labels. Begley and McOuat (2020) at McKinsey saw the trend of private-label shopping in the retail sector has increased throughout COVID-19. From a manufacturing perspective, there are several ways PL can be produced, starting from manufacturers who also produce national brands (NB) (Dawes and Nenycz- Thiel, 2013), small and medium-sized enterprises, and sometimes the production of PLs is done internally (Chen et al., 2010). The allure of Indonesia lies in its thriving retail landscape, with minimarkets emerging as the dominant format (Databoks, 2021).

Interestingly, within these minimarkets, a significant portion of the products comes from the Small and Medium-sized Enterprises (SMEs). In- corporating private-label products sourced from SMEs enhances the stores' positive image and de- monstrates a commitment to Corporate Social Re- sponsibility (CSR) (Evans and Sawyer, 2010; Fraj -Andrés et al., 2012; Perrini, 2006). By supporting local SMEs, minimarkets contribute to the growth of these businesses while still operating within a framework that benefits the retailers themselves.

As SME development is now one of the pri- orities, various development programs are echoed in the retail sector. The CSR program that supports SMEs is also considered to help companies to get a good image. On the customer side, pride in the SMEs or what is often referred to as local products is also increasing and becoming a positive value.

A study looks at the perception of local brands with local perceived value in developing country markets, which is important for consumers (Sicht- mann et al., 2017). Aull et al. (2022) at McKinsey

also see that value needs attention in post-pandemic private-label marketing. Consumers realize that the price of goods is increasing, so the implication of loosening the shopping budget is the desire to get more value. In Indonesia, most retail stores are in the form of minimarkets. It is due to the wide reach of minimarkets to remote areas of the city and can reach people from various social classes.

Euromonitor International 2020 noted that the sales value of minimarket outlets in Indonesia conti- nued to increase to 12.5 billion USD in 2020. The- se increases exceeded the sales value of supermarkets and hypermarkets even when the pandemic occurred. The distribution of minimarkets is quite even in various cities in Indonesia. The minimarket business model is considered to have good resi- lience even when a crisis occurs. It makes research related to minimarkets important to explore, especially related to how SMEs are one of the brand categories.

Two brands that dominate the minimarket market share in Indonesia are Alfamart and Indo- maret. Alfamart, one of the minimarkets that dominate the Indonesian retail market, also empowers SMEs by involving them as suppliers through the Home Brand and Private Label (HBPL) products, whicharebrandedAlfamart(Alfamart, 2015). Em- powerment of SMEs does not only occur upstream but downstream, considering that the HBPL products sold at Alfamart outlets adjust to the location of the outlets so that each region can supply different SME products. The same thing is also done by Indomaret, especially in the snack category, which cooperates with the SMEs by including the manufacturer's name on the back of the package. These snack products are not only supplied by one SME but by various SMEs from various regions according to the origin of the snacks. Therefore, this research wants to see the attitude built by consumers towards private-label products, especially with information on suppliers from the SME sector. A study by Riboldazzi et al. (2021) states some gaps in analyzing the private label. Future research may focus on PLBs from different retailers and PLBs belonging to the same retailer portfolio. This study then wants to see the moderating effect of information about SMEs as producers. This study aims to provide an overview of the antecedent variables influencing attitudes toward purchasing these private-label products.

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While national brands invest good marketing resources to gain advantages in brand equity (Steenkamp et al., 2010), private labels generally aim to keep production and packaging costs low and obtain profitable margins for retail stores. Pri- ce is indeed an important attraction among other brand equity. However, various studies also men- tion other key factors besides price that examine consumer perspectives that influence PL consumer buying decisions, along with the growth of the private-label (Abboud, 2021; Beneke and Carter, 2015; Dhaliwal et al., 2020; Dixit and Maurya, 2021). In the last few decades, private labels have developed from economy PL to value PL, premium PL, to Smart PL (Gielens et al., 2021). Compa- red to national brands, private labels are often associated with lower prices and lower quality (Boy- le et al., 2018; Choi and Coughlan, 2006; Vaidya- nathan and Aggarwal, 2020), although there has been an increase in quality recently (Rubio et al., 2020). This perception was built because of price differences, and no marketing efforts were made.

Consumers tend to think that suppliers with low- quality produce private-label products. Even thou- gh consumers often don't look at the company that produces the PL, this perception persists (Konuk, 2018). Private-label products that come from SME production are also treated the same. Information about SME production is not widely used in promotional materials and tends to be positioned as a form of corporate social responsibility (CSR) by retail companies. Unfortunately, there is limited research on SMEs as private-label producers and their impact on purchase intention. Exploring this area could unveil crucial insights into consumer behavior and offer strategies to benefit all stake- holders involved.

In the Indonesian retail sector dominated by minimarkets, private-label brands (PLBs) play a significant role as a strategic approach to retaining customers. However, limited research has explor- ed the role of Small and Medium-sized Enterprises (SMEs) as producers of these private-label products and how this information influences consumer attitudes and purchase intentions. Understand- ing this relationship is essential to shed light on the dynamics between SMEs, private-label brands, and consumer behavior. Moreover, given the gro- wing emphasis on SMEs' development and the increasing value consumers place on local products,

investigating the moderating effect of information about SMEs as producers can provide valuable insights into enhancing consumer perceptions towards private-label products. This study aims to ad- dress these gaps and uncover the factors influencing attitudes towards purchasing private-label products, focusing on the involvement of the SMEs as producers, ultimately contributing to a comprehensive conclusion on the dynamics of private-label marketing in the Indonesian context.

LITERATURE REVIEW Attitude Theory

Attitudes are formed when a person learns to behave consistently towards an object, both the pleasant and unpleasant (Schiffman and Wisenbl- it, 2015). Attitudes play a role in shaping customer intentions in different ways (Lin et al., 2018), as well as private labels. Ajzen and Fishbein first in- troduced this theory in 1975, where attitude refers to the evaluation of an object, concept, or behavior with some dimensions such as pleasant or unpleasant, good or bad, likes or dislikes (Ajzen, 2015;

Ajzen and Fishbein, 2000; Fishbein and Ajzen, 1975). Philip Zimbardo and Michael Leippe define attitude as the basis for evaluating certain obje- cts. This evaluation underlines cognition, affective reaction, behavioral intention, affective response, and related to future behavior (Littlejohn and Foss, 2009). The attitude measurement technique is carried out by giving an evaluative score to the indivi- dual's likes or dislikes of the attitude object.

Three groups of factors are interrelated in influencing the consumer behavior: psychological (personal factors), sensory (product-specific factors), and marketing (market-based factors), which are very important to meet consumer expectations and achieve satisfaction (Tomasevic et al., 2018).

Differences in attitudes towards private labels also occur in different product categories. Ruiz-Real et al. (2017) found that attitudes toward store brands have a direct influence on the store loyalty in the Spanish market. In Mumin and Phang's research (2021), the attitude was influential in mediating between store loyalty and purchase intention.

Private-Label Brand (PLB)

Private-label brand products are present in Indonesia due to market expansion by European, Asian, and American retailers. Kotler and Keller

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845 (2012) define a private-label brand as a brand cre-

ated and owned by a retail company. Private-label products are manufactured by third parties but are sold under the retailer's brand name. Private-label brands generally do not have promotional activities such as advertising, and product quality is most- ly perceived as a lower quality product than brands produced by manufacturers (Lupton et al., 2010).

Private-label product strategies are commo- nly found in the food retail sector worldwide (Cu- neo et al., 2014; Kumar et al., 2017). For the retail companies, private label brands (PLB) have some values that can support the retail businesses when compared to national brands (NB) (Hyman et al., 2010). Various studies related to private-label generally tend to focus on the effect of stores as retailers on perceptions and attitudes towards private- label (Agarwal et al., 2018; Calvo-Porral and Ma- ngin, 2016; Garrett et al., 2017; Graciola et al., 2020; Konuk, 2018; Lin et al., 2017; Manikandan, 2020; Massara et al., 2018).

Perceived Risk

Perceived risk is defined as a risk projected by consumers that can cause customers to experience feelings of uncertainty and dissatisfaction with a particular product or service (Aldousari et al., 2017). Theperceivedriskcandifferacrossproduct categories and purchase situations (Manikandan, 2020). It is more common in less familiar or relatively new products (McClure and Seock, 2020), including the private label concept. In particular, the effect of perceived risk on purchase intention of PL seems to be a key variable in the research the- me of perceived PL characteristics (Riboldazzi et al., 2021). As in a study where Easterners were found to have stronger risk aversion than Western- ers, this may also correlate with the fact that Asian buyers tend to seek commodities that present less risk (Svoboda and Kopecka, 2017).

The customers will reconsider their product choices because of the risks. The higher the risk consumers face, the more unprofitable and confus- ing multiple purchasing options become. By nature, the perception of high risk and the nature of people to avoid risk in their decision-making proc- ess, it is possible for customers to form a negative attitude towards private-label (Mumin and Phang, 2021).

Store Images

Store image is a composition of factual and imaginary attributes that consumers attach to certain retail entities, including the commercial brand affiliations associated with outlets (Beristain and Zorrilla, 2011). Store image plays an important role for the retailers and business strategy marketing managers because it ensures differentiation in the market and can increase customer purchase intentions (Cornelius et al., 2010; Erdil, 2015). In various studies, the image factor is a strong predictor of store brand selection, so store image can be one of the most important factors influencing PL consumer decisions (Diallo, 2020; Kaswengi and Diallo, 2015). In a study of the relationship between store image and store brand equity in hypermarkets, the results show that retailers can use store image to influence all brand equity components (Wu et al., 2011). The study also found that store image has a direct and indirect effect on the purchase intention of private-label brands.

Store Loyalty

Many studies on store loyalty are found in studies of consumer behavior in retail marketing.

Customers loyal to certain products and brands will find it difficult to change or switch to other products or brands and will look for substitutes.

This aligns with various effects from store loyalty to private labels (Gielens et al., 2021; Mumin and Phang, 2021). Previous studies have defined store loyalty as a customer's preference for a store compared to available competitive alternatives (Rubio et al., 2017). Do Vale et al. (2016) report that des- pite the increasing importance of PL in assortment retailers, its impact on the store loyalty is only relevant in supermarkets with medium and premium cost positioning. According to the insights gained from the literature, the relationship between private labels and consumer store loyalty is now increasingly relevant to practitioners and academics, so it is important to offer further comprehensive em- pirical analysis.

Brand Images

Brand images are defined as perceptions about brands that are reflected in brand associations stored in consumers' memories (Kotler and Keller, 2012). Branding refers to the representational pro-

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cess that includes a particular brand's production, distribution, and consumption activities that pass through organizational agents to reach consumers (Vásquez et al., 2013). Strong branding represents a good understanding of consumers (Hewer et al., 2013). A strong brand identity also means that the consumers can differentiate the products from service providers or manufacturers of similar products. This study uses brand images to refer to private-label product associations and their relation to SMEs as producers who are the object of research.

Perceptions that are built in the minds of consumers can emerge from an assessment of quality (source) or disclosure of collaboration with private- label suppliers (Lamey et al., 2007; Pérez-Santa- maría and Martos-Partal, 2021; Steenkamp et al., 2010). Disclosure of collaboration or information regarding suppliers and manufacturers can benefit retail by increasing the consumer perceptions, attitudes, and purchase intentions towards private-label (Cho et al., 2015; Rahman and Soesilo, 2018;

Vaidyanathan and Aggarwal, 2000). Euromonitor, in 2013, stated that in developed countries such as the United States, the customers perceive private labels and national brands. Still, customers in the Asia Pacific, the Middle East, and Africa perceive private labels with a slightly negative image.

Price Consciousness

Price consciousness is defined as the degree to which consumers focus on paying low prices without considering the distinctive product attributes that justify each price increase, which makes price the most important factor when buying PLB (Cho et al., 2015; Rubio et al., 2020). Kasotakis and Chountalas (2015) emphasize that price can also be used with a brand name to imply consistency. Consumers who believe in the relationship between the price and quality usually rely heavily on brands and tend to research price choices (Kukar- Kinney et al., 2012). It also happens in PL cases.

When the price difference is large, the perceived PL quality decreases because the PL price is lower than the consumer's internal reference price (Kal- yanaram and Winer, 2022).

The retailers often use comparative pricing, comparing the prices of their national brand (NB) products with higher reference prices (Vaidyana- than and Aggarwal, 2000). Because of this, retailers must consider the reference price expected by

consumers before setting retail prices (Srivastava et al., 2022; Zhang et al., 2013). Through their analysis in the Thailand, Kocisiarova and Nagyova (2014) found that the average private label price was 30% lower than the average national producer price.

Dimensionsrelatedtotheprivate-labelprice consciousness have appeared in various previous studies (Beneke et al., 2013; Calvo-Porral and Ma- ngin, 2016; Norfarah and Siti-Nabiha, 2018; Tha- nasuta and Chiaravutthi, 2018). In Norfarah and Siti-Nabiha's (2018) study, consumer price consciousness was found to have an effect on private- label purchase intentions, while value consciousness was found to have an impact but not significantly.

Brand Categories

Private label brands generally exist as products with a low-cost strategy that reduces advertising and promotion costs so that the prices given to consumers can be cheaper (Czeczotko et al., 2020;

Gielens et al., 2021). Private-label (PL) is available in various product categories, such as household appliances such as tissue, simple kitchen ingredie- nts such as sugar or salt, andd snacks produced by multiple suppliers. In most cases, PL is produced by manufacturers producing national brands (Da- wes and Nenycz-Thiel, 2013). In some cases, the small and medium enterprises, especially fast-mo- ving consumer goods, also supply large retailers for PL. However, sometimes PL production is carried out internally (Chen et al., 2010). However, one study found that consumers often did not look at the PL-producing companies; the image of a retail store that sells products is considered sufficient to build trust (Konuk, 2018).

Other studies have seen that branding and disclosing information about these suppliers has the potential to increase consumer perceptions, attitudes, and purchase intentions towards PL (Cho et al., 2015b; Rahman and Soesilo, 2018). While some collaborations remain confidential, some countries require disclosure; the South Korea legally mandates that PL product packaging disclose the manufacturer's name (Cho et al., 2015b), and since 2012, Spanish wholesale market leader Mercado- na has displayed PL manufacturer information on itspackaging(Mercadona, 2017). InIndonesia, the treatment of products manufactured by different

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847 suppliers can be seen from the branding developed

by each type of brand, such as types produced by national brand suppliers. These types collaborate with SMEs to SME products positioned as empo- werment programs branded on special shelves without being labeled with a private-label brand. How branding is built is important for brands sold in retail stores to the retailer's image (Delgado-Balles- ter et al., 2014; Dolbec and Chebat, 2013; Massara et al., 2018).

Purchase Intentions

Purchase intention is a form of planned behavior by prospective customers that allows it to be passed on to purchase behavior (Schiffman and Wisenblit, 2015). A more complete statement has been disclosed in research of Lin and Lu (2010), where purchase intention refers to the possibility of consumers considering purchasing activities, representing what people want to buy in the future, including searching for information about the des- ired product, to the consumer's decision to make a repurchase. Purchasing decisions can be influenced by various needs, starting from physiological and socio-psychological needs, focusing on the factors forming consumer attitudes toward private- label products (Kakkos et al., 2015). Various studies have looked at the relationship and influence of antecedent factors on private label purchase intentions (Abril et al., 2015; Kakkos et al., 2015;

Mulatsih and Kusumawardhani, 2020; Mumin and Phang, 2021).

HYPOTHESIS DEVELOPMENT

In Mumin and Phang's research (2021), the store image is stated to have a significant effect on customerattitudestowardsprivatelabelpurchases. This variable will be in the store-focused area, among other variables focusing on brand equity. Sto- re image is also considered an important factor in retail influencing satisfaction (Irfan et al., 2019) and PL purchase intentions (Girard et al., 2017).

H1 : Store Image has a positive influence on Atti- tude towards Buying Private-Label.

Research revealed significant results about the relationship between store loyalty and attitude.

It emphasizes the important role of private labels in building store loyalty because private-label products are typically available exclusively at certain

retailers. In contrast, national-brand products can usually be found at many different retailers. Lin et al. (2017) also noted that store loyalty is directly and strongly correlated with using private labels.

H2 : Store Loyalty has a positive influence on At- titude towards Buying Private Label.

Previous research has shown that with perceived risk, consumers tend to develop negative attitudes as a natural response when they find a purchase option that allows them to avoid risk (Mumin and Phang, 2021). In other words, the existence of a private label when it is still at a less recognized stage will pose a high risk and can form a negative attitude towards private labels.

H3 : Perceived Risk has a negative influence on Attitude towards Buying Private-Label.

Price plays an important role in building the consumer attitudes in determining purchasing decisions. Norfarah and Siti-Nabiha (2018) found that consumers with price conscientiousness will influence attitudes toward their private label purchases.

Price consciousness can have a positive impact on the attitude of price-conscious consumers. It happens because consumers generally have a mindset that they want to benefit from private-label brands.

After all, they offer lower price options than national brands (Dixit and Maurya, 2021).

H4 : Price Consciousness has a positive influence on Attitude towards Buying Private-Label.

This study's modification is adding the brand image as a variable with a slightly different approach from the store image. The hypothesis will be built to see the perception of product image directly. This variable is intended to see the image built from information about SMEs as producers or suppliers of private-label products. Brand image is one of the variables included in PL marketing stimuli (Riboldazzi et al., 2021). Brand image in the minds of consumers is understood through the superiority or strength of brand associations and inherent uniqueness (Mitra and Jenamani, 2020).

Research Lin et al. (2021) discussed the relationship between the brand image that was built and its relation to the company's social mission. Rese- arch shows that the more customers agree with the stated mission, the more positive their perception of the brand will be.

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H5 : Brand Images have a positive influence on Attitudes towards Buying Private-Label.

The study of Mumin and Phang's research (2021) found that store-related variables had a significant relationship with attitudes toward purcha- singPLBproducts, influencingthepurchaseinten- tions. The study reports that attitude mediates the relationshipbetweenallstore-relatedvariablesand purchase intention.

H6 : Attitude towards Buying Private-Label has a positive effect on Purchase Intention.

Various studies have proven the importance of product categories as an important aspect of the consumer decision-making. Consumers are more psychologically bound to some types of products, while for some types of products, consumers behave rationally (Luong and Slegh, 2014). The moderating effect of product category may occur on the relationship between sales promotion, benefits, and perceived value by consumers. In this study, the main focus of the object is the branding strategy that is applied so that brand categories are more

appropriate to justify a moderating effect similar to the product category in private labels and its relation to producers originating from SMEs. Thus, the categories determined are based on information about the manufacturer. Therefore, the moderation hypothesis is derived in five points.

H7 : Brand Category has a moderating effect on the influence of Store Image on Attitude towards Buying Private Labels.

H8 : Brand Category has a moderating effect on the influence of Store Loyalty on Attitude towards Buying Private Labels.

H9 : Brand Category has a moderating effect on the influence of Store Perceived Risk on At- titude towards Buying Private Labels.

H10 : Brand Category has a moderating effect on the influence of Price Consciousness on At- titude toward Buying Private Labels.

H11 : Brand Category has a moderating effect on the influence of Brand Image on Attitude towards Buying Private Labels.

H12 : Brand Category has a moderating effect on Attitude towards Buying Private Labels towards Purchase Intention.

Figure 1. Research Conceptual Framework H5

H4 H2 Store H1

Image

Store Loyalty

Perceived Risk

Price Consciousness

Brand Image

Attitude Towards PLB

Purchase Intention

Brand Category H7 – H12

H3 H6

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849 Table 1. Variable Operational Definitions

Variable Indicator Item

Store Image Alfamart/Indomaret provides good overall service.

(Mostafa and Elseidi, Alfamart/Indomaret carries high-quality merchandise.

2018) Alfamart/Indomaret is close to my ideal store.

Alfamart/Indomaret has helpful and knowledgeable salespeople.

Alfamart/Indomaret provides an attractive shopping experience.

Store Loyalty (do Vale et al., 2016)

From the group of stores I know, this store is the one with better quality/price ratio.

Based on all my experience with this store, I am very satisfied.

I always choose to shop at this store.

I recommend this shop to others.

Perceived Risk Functional Risk I have doubts about the quality of this product (Diallo, 2012) I'm afraid this product won't last long

Financial Risk I have doubts about the materials used in its production In my opinion, buying this product is a waste of money.

I'm afraid the product I got is not worth the money spent.

In my opinion, buying this product is not a wise way to spend money.

Price Consciousness I tend to buy the lowest-priced brand that suits my needs (Mostafa and Elseidi,

2018)

When purchasing a product, I look for the cheapest brand available

When making purchases, I rely heavily on price Brand Image Functional The products have a high-quality

(Lin et al., 2021) The products have better characteristics than competitors Affective The brand is nice

The brand has a personality that distinguishes it from its competitors

It is a brand that does not disappoint its customers Reputation It is one of the best brands in the sector

The brand is very consolidated in the market Attitude toward Buying this product is a good thing

buying PLB Buying this product is what I like (Liang, 2015) Buying this product is a positive thing

Buying this product is a pleasure

Purchase Intention The probability that I would consider buying store brands is high (Diallo and Siqueira, I would purchase store brands next time

2017) I would consider buying store brands next time

I will recommend buying store brands

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850 METHOD

The study employed a quantitative research design, utilizing numerical data analysis to explore relationships and draw statistically significant conclusions. Data collection was carried out using the online method via a questionnaire from March 2023 to April 2023. The samples in this study were taken using the non-probability sampling method withapurposivesamplingtechniquedirectedtoIn-

donesian people with certain criteria. This study's criteriaareAlfamartandIndomaretcustomerswho have shopped in the last 3 (three) months. All the items on the questionnaire were measured using a 6-point Likert scale (1 for strongly disagree - 6 for strongly agree) to minimize the neutral judgments.

This study adapted from previous studies, modifi- ed according to context, and added several new variables (2 out of 8) to assess each construct in the proposed research model. This study uses structural equation modeling (SEM) hypothesis testing to analyze structural models that contain latent variables (Meyers et al., 2013) by combining two statis- tical methods: factor analysis and regression. SEM

model used in this study is the Partial Least Square SEM (PLS-SEM) to test causal relationships (Hair et al., 2020). The software used is SmartPLS4.

RESULTS

This study collected 441 respondents who know or have purchased the private-label products withtheIndomaretorAlfamartbrandsatminimar- kets. Respondent demographics can be seen in Ta- ble 1. Based on Table 1, 74% of respondents were female, 49.9% were from the Greater Area Jakar- ta, and 58.9% spent less than 3 million. As many as 51.7% chose Indomaret as the brand most fre- quently visited for shopping, while the remaining 46.7% chose Alfamart.

This study has reviewed the reliability and validity tests for each item measurement. Accordi- ng to Hair et al. (2020), all the factor loadings must exceed the recommended threshold value 0.5. The measurement results of Factor Loading and Aver- age Variance Extracted (AVE) gave the result that all indicators in each research latent variable met the minimum criteria of value.

Table 2. Respondent’s Demographic Profile

Variable Category Frequency Percentage

Gender Male 115 26%

Female 326 74%

Age 18 – 24 235 53.3%

25 – 35 174 39.5%

35 – 50 28 6.3%

> 50 4 0.9%

Region Greater Area Jakarta 220 49.9%

Outside Greater Area Jakarta 185 42%

Outside Java Island 36 8.2%

Expenditure < IDR 3 million 260 58.9%

IDR 3 – 5 million 103 23.4%

IDR 5 – 10 million 61 13.8%

> IDR 10 million 17 3.9%

Minimarket brand Indomaret 228 51.7%

Alfamart 206 46.7%

Source: Processed Questionnaire Data (2023)

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851 Table 3. Descriptive Statistic Analysis

Variabel N Min Max Mean Std. Dev Mean Variabel

Store Image 441 2.00 6.00 5.08 0.57 5.00

441 2 6 5,15 0,61 5.00

441 2 6 4,87 0,77 5.00

441 2 6 4,93 0,79 5.00

441 3 6 4,97 0,67 5.00

Store Loyalty 441 2 6 4,61 0,9 4,72

441 2 6 4,92 0,77 4,72

441 2 6 4,66 0,97 4,72

441 1 6 4,69 0,93 4,72

Perceived Risk 441 1 6 3 1,19 3

441 1 6 3,24 1,19 3

441 1 6 2,98 1,22 3

441 1 6 2,57 1,07 3

441 1 6 3,32 1,28 3

441 1 6 2,89 1,14 3

Price Consciousness 441 1 6 4,52 1,17 4,35

441 1 6 4,2 1,27 4,35

441 1 6 4,34 1,18 4,35

Brand Image 441 1 6 4,49 0,83 4,38

441 2 6 4,26 1,02 4,38

441 1 6 4,47 1,03 4,38

441 1 6 4,44 1,02 4,38

441 1 6 4,42 0,96 4,38

441 1 6 4,25 1,05 4,38

441 1 6 4,32 1,09 4,38

Attitude towards Buying PLB 441 1 6 5,06 1,1 5,01

441 1 6 4,98 1,16 5,01

441 1 6 5,04 1,11 5,01

441 1 6 4,97 1,16 5,01

Purchase Intention 441 1 6 4,45 1,06 4,29

441 1 6 4,01 1,2 4,29

441 1 6 4,44 1 4,29

441 1 6 4,29 1,09 4,29

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852

The results show that outer loadings of all items were greater than 0.70 and thus were acceptable. Second, reliability and internal consistency reliability were measured by composite reliability coefficients (Hair et al., 2020). A composite reliability (CR) coefficient higher than 0.70 for each latent construct considered being acceptable. Con- vergent validity was evaluated by examining the measures' average variance extract (AVE) scores of 0.571 to 0.911. Based on the results of the Cron- bach's Alpha measurements and the Composite Reliability (CR) value in the reliability analysis, it was found that all the indicators for each variable met the criteria, namely the Cronbach's Alpha val-

ue and the Composite Reliability value of more than 0.7. So, it can be concluded that all the indicators in each latent variable can be declared reli- able.

This study evaluates the structural models’

by calculating the path coefficient value using the Partial Least Squares Analysis (PLS-SEM). The model’s predictive accuracy is examined via path coefficient scores. Because the positive or negative relationship between the variables has been determined in the research hypothesis and the num- ber of sub-samples is set at 5000, the p-value must be less than 0.05 for the hypothesis to be accepted, and the t-statistics must be greater than 1.645.

Table 4. Results of Hypothesis Testing

Hypothesis Path

Coefficient

T- value

P-

value Conclusion

H1 Store Image  Attitude towards buying PLB -0.002 0.051 0.959 Rejected H2 Store Loyalty  Attitude towards buying PLB 0.128 2.227 0.026 Supported H3 Perceived  Attitude towards buying PLB -0.130 3.992 0.000 Supported H4 Price Consciousness  Attitude towards buying PLB 0.019 0.537 0.591 Rejected H5 Brand Image  Attitude towards buying PLB 0.528 11.963 0.000 Supported H6 Attitude towards buying PLB  Purchase Intention 0.681 22.640 0.000 Supported Source: Processed Questionnaire Data (2023)

Table 5. Results of Moderation Analysis

Hypothesis Category 1

(p-value)

Category 2 (p-value)

Category 3

(p-value) Conclusion H7 Store Image  Attitude

towards buying PLB

0,237 0,918 0,544 Not significant

H8 Store Loyalty  Attitude towards buying PLB

0,001 0,566 0,920 Significant in Category 1

H9 Perceived Risk  Attitude towards buying PLB

0,034 0,102 0,006 Significant in categories 1 and 3

H10 Price Consciousness  Attitude towards buying PLB

0,675 0,904 0,783 Not significant

H11 Brand Image  Attitude towards buying PLB

0,000 0,000 0,000 Significant in all categories H12 Attitude towards buying PLB

 Purchase Intention

0,000 0,000 0,000 Significant in all categories Source: Processed Questionnaire Data (2023)

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853 From the results of hypothesis testing listed

in Table 4, the Store Image variable has a p-value above 0.05, which is 0.959, and a t-statistic value of 0.051 or less than 1.645. That means that Store Image has no significant influence on Attitude towards Buying PLB. So, from these results, Hypo- thesis 1 was rejected. The Store Loyalty variable has a p-value below 0.05, which is 0.026, and a t- statistic value of 2.227 or more than 1.645 means that Store Loyalty has significant positive influence on Attitude towards Buying PLB. So, from these results, it can be ascertained that Hypothesis 2 is accepted. The Perceived Risk variable has a p- value below 0.05, which is equal to 0.000, and a t- statistic value of 3.992 or more than 1.645 means that Perceived Risk has a significant negative effect on Attitude towards Buying PLB, it can be ascertained that Hypothesis 3 is accepted. The Price Consciousness variable has a p-value above 0.05, which is 0.591, and a t-statistic value of 0.284 or lessthan1.645, whichmeansthatPriceConscious- ness has no significant effect on Attitude towards Buying PLB, so Hypothesis 4 is rejected. The brand Image variable has a p-value below 0.05, which is 0.000, and a t-statistic value of 11.963 or more than 1.645 means that Brand Image has a significant positive influence on Attitude towards Buying PLB. So, from these results, it can be ascertained that Hypothesis 5 is accepted.

The results of the hypothesis testing conducted separately in each category, with p-values analyzed, revealed that some independent variables exhibited different levels of significance while the others showed no differences. In cases where significant differences were observed, the hypotheses were accepted due to the moderating role of the br- and category. For instance, the Store Image variable had p-values above 0.05 in all three categories, indicating that its influence was insignificant, leading to the rejection of Hypothesis 7. Store Loyal- ty variable showed a significant influence with a p-value below 0.05 in Category 1 (MSME PLB).

Still, in Categories 2 (Big manufacturer PLB) and 3 (MSME brands), the p-values were above 0.05, suggesting an insignificant influence, resulting in the acceptance of the Hypothesis 8. The Perceived Risk variable significantly influenced p-values below 0.05 in Categories 1 and 3. Still, in Category 2, the p-value was above 0.05, indicating an insignificant influence, leading to the acceptance of the

Hypothesis 9. The Price Consciousness variable had p-values above 0.05 in all three categories, indicating that its influence was insignificant, leading to the rejection of Hypothesis 10. Conversely, Brand Image variable showed significant influence with p-values below 0.05 in all three categories, leading to the rejection of Hypothesis 11. Finally, the Attitude towards Buying Private Label variable had a significant influence on Purchase Intenti- on with p-values below 0.05 in all three categories, leading to the rejection of Hypothesis 12.

DISCUSSION

The results of this study are in contrast to reference journals, which find that Store Image has a positive and significant effect on Attitude towards Buying PLB (Mumin and Phang, 2021).

However, these results align with research from Mulatsih and Kusumawardhani (2020), which found that Store Image has a very low and insignificant effect. This research was also conducted in In- donesia, which means it is relevant when compared to the results of this study. So, it can be explained that retail companies need more than just a good image to foster consumer attitudes and purchase intentions. Other studies have also seen that the Store Image alone does not have a significant effect on the Brand Image of PLB (Diallo, 2012). In Diallo's research (2012), store image is not a factor that can directly increase attitudes towards PLB in developing countries. The store image factor must be combined with other elements to become a sig- nal that can increase a positive attitude towards the PLB. In addition, this study also found that the store image variable as a whole has an inverse effect on the attitude toward buying PLB with a negative path coefficient. When analyzed based on differences in minimarket brands, the path coefficient of respondents who fill in the Indomaret brand is positive, while for Alfamart, it is negative. From these results, it can be found that there are differences in results from different store brands. It has implications for the insignificant effect of store image on the overall assessment.

The results of this study follow the reference journal, which stated that Store Loyalty has a significant positive effect on Attitude toward Buy- ing PLB (Mumin and Phang, 2021). This research has p-value of 0.00, which means it is significant.

This finding also aligns with research by Vale et

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al. (2016), who revealed a significant relationship between store loyalty and attitude. So, it can be explained that consumers tend to buy products and have a positive attitude because of their loyalty. In another study, Hyman et al. (2010) conducted a comprehensive review of the existing literature on Private-Label Brands (PLBs). They underscored their potential to enhance the store loyalty, as PLB customers tend to exhibit higher loyalty towards the store. The study also highlighted that PLBs can drive increased sales and foster goodwill, especially when prices are subsidized and product quality is high. Additionally, the research revealed that retailerscancapitalizeontheloyaltyoftheircusto- mers by selling higher-margin PLBs, contributing to greater profitability. As a result, there are dual implications arising from Store Loyalty and Atti- tude towards PLB, creating a mutually reinforcing relationship.

The results of this study align with various previous studies that show that with the perceived risk, consumers tend to develop negative attitudes as a natural response when finding the purchase options that allow them to avoid risk (Mumin and Phang, 2021). Other research also shows the same thing, namely that perceived risk has a significant negative effect on Attitude towards Buying PLB, whichistranslatedthroughthedimensionsoffunc-

tionalrisk, socialrisk, andfinancialrisk(Manikan- dan, 2020). Two of the three dimensions are also used in this study. From the results of this study, it can be explained that the existence of a private-label when it is still at a less well-known stage will pose a high risk and can form a negative attitude towards private-label. The perception of risk can be negatively affected is also related to the different product categories. PLB is not promoted in the mass media, and only in-store media is used for PLB promotion.

Various studies tend to see price as important in building consumer attitudes in determining purchasing decisions. Low prices are an important factor in attracting consumers to buy private-label products. However, the results of this study are in line with the research of the González-Benito and Martos-Partal (2012), who discussed that although PLB buyers are price sensitive, price is said to be less important than brand awareness, brand reputation, and quality in PLB retail chains. On the other hand, this study also found that the variable pri-

ce awareness at different minimarket brands produces path coefficient values that are inversely pro- portional. The path coefficient value of respondents who fill in the Indomaret brand is negative, while for the Alfamart, it is positive. For Alfamart customers, price awareness makes Alfamart customers have an increasingly positive attitude towards PLB purchases. Meanwhile, for Indomaret customers, price awareness reduces attitudes towards PLB purchases. From these results, it can be found that there are differences in results from different store brands. It has implications for the insignificant influence of price consciousness in the overall assessment.

Brand Image is one of the modifications in this study. This variable emphasizes the perceived image of the product directly. It is intended to see the image built from information about MSMEs as producers or suppliers of private-label products.

Brand Image is one of the variables included in PL marketing stimuli, which has a positive influence on PLB purchases (Riboldazzi et al., 2021). This study's results align with various types of research looking at the image of PLB products. As defined by Keller (1993), brand image refers to the total of brand associations held in consumers' memory, which leads to perceptions about the brand. Keller further classified brand image associations into the quality and affective dimensions. In line with the above research, the brand image of Private-Label Brands (PLBs) in this study pertains to the associations consumers attribute to PLB products, influencing their perceptions of the brand. That aligns with the findings of this research, which indicate that branding attached to products as part of brand equity, irrespective of associations with the store, significantly influences the attitudes formed by consumers towards PLB.

This study's results contribute to the existing body of research, aligning with previous studies demonstrating the significant and positive influence of attitudes, formed from antecedent variables acting as mediating factors, on purchase intention. Consistent with the research conducted by Mumin and Phang (2021), attitudes are highlighted as a crucial mediating factor between the store- related aspects and purchase intention, supporting findings from Lin et al. (2018). Additionally, the positive association between the attitude toward brands, derived from consumers' assigned value to

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855 the brand (Keller, 1993), and purchase intention

has been well-established in prior research, particularly in studies focusing on the perceived value of the Private-Label Brands (PLBs) (Beneke et al., 2013). Furthermore, the study confirms the significant impact of overall attitude towards the PLBs on purchase intention, in line with the findings of Mostafa and Elseidi (2018). These collective findings enhance our understanding of the pivotal role of attitudes in influencing consumer behavior and underscore the importance of considering store-related factors and perceived value in the context of PLBs to optimize purchase intention strategies.

The insignificance of Store Image in each brand category can be attributed to specific cont- extual factors. Firstly, in the context of PLBs produced by big manufacturers, the research aligns with previous findings by Mulatsih and Kusuma- wardhani (2020) in Indonesia, suggesting that Sto- re Image has a very low and insignificant effect. It indicates that retail companies need more than just a good image to foster positive consumer attitudes and purchase intentions. Secondly, regarding the PLBs associated with the Small and Medium-sized Enterprises (MSMEs), the store's influence in shaping consumer attitudes appears minimal. This finding aligns with research conducted by Diallo (2012), where Store Image alone did not significantly affect consumers' attitudes towards PLBs in developing countries. Rather, the store image must be combined with other factors to effectively influence consumers' positive attitudes toward PLBs.

Moreover, the study found an inverse effect of the store image variable on the attitude toward buying PLBs, with a negative path coefficient. The analysis of different minimarket brands revealed var- ied results, with a positive path coefficient for respondents associated with the Indomaret brand and a negative path coefficient for Alfamart. These va- riations in results from different store brands have implications for the insignificant effect of the Sto- re Image on the overall assessment, indicating that the store's influence plays a limited role in shaping consumer attitudes towards PLBs in the MSME context.

Store Loyalty's significant effect on Attitu- des toward Buying PLBs in the context of MSME- produced PLBs is driven by the trust and unique brand characteristics associated with social values.

Consumers' inclination to try PLB products from

the MSMEs is attributed to this trust. This finding aligns with previous research by Vale et al. (2016), emphasizing the significant relationship between store loyalty and attitude. Hyman et al. (2010) also highlighted PLBs' potential to enhance store loyalty, particularly in the MSME context. On the other hand, the lack of significant effect of the Store Lo- yalty on Attitude toward Buying PLBs in the big manufacturer-produced PLBs may be due to their perceived lower quality than national brands. In contrast, consumers view MSME-produced PLBs, especially in the snack category, as unique and so- cially valuable, fostering positive attitudes. This difference in perception and positioning explains thevaryingeffectsoftheStoreLoyaltyonAttitude toward Buying PLB between the two categories.

Furthermore, in the third category of independent MSME products, Store Loyalty does not significantly influence Attitudes toward Buying PLB.

The research findings reveal that perceived risk is significant in Category 1 - MSME PLB and Category 3 - MSME independent brands. As part of perceived characteristics, perceived risk is the risk perceived by customers or consumers that makes them feel uncertain and dissatisfied with a particular product or service (Aldousari et al., 2017).

Since the outcome of purchasing decisions can only be known in the future, consumers are forced to confrontuncertaintyandperceivedriskswhenthey realize they may not achieve all their purchase go- als(Mitchell, 1999). Perceivedriskcanvaryacross product categories and purchase situations (Mani- kandan, 2020). In this study, perceived risk only influences products produced by MSMEs, which is reasonable considering that products produced by big manufacturers in category two generally also manufacture national brands, resulting in fewer perceived risks. Therefore, with the existing differences in this variable, the brand category moderates the perceived risk of the attitudes built by consumers.

The research findings indicate that the price consciousness was insignificant in any category. It contrasts with the various studies that highlight the substantial role of the price consciousness in shaping consumer attitudes and purchase decisions to- wardsPLBs(Benekeetal., 2013;Calvo-Porraland Mangin, 2016; Norfarah and Siti-Nabiha, 2018).

However, the results of this study align with the research by González Benito and Martos-Partal

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856

(2012), who discussed that although the PLB buyers are price-sensitive, price is considered less important compared to factors like brand awareness, brand reputation, and quality in PLB retail chains.

One possible explanation could be that the prices of products in the three categories and national brands are not significantly different. Additionally, the unique traditional snack types in MSME-produced PLBs and independent MSME brands may possess distinct values that differentiate them from typical national brands, thereby reducing the impact of price evaluation.

Theresearchfindingsindicatethatthebrand image is significant in all categories, which means that brand category does not moderate the influence of brand image on attitude towards the brand. It is consistent with most of PLB literature, which highlights that while PLBs were initially popular due to their lower price points, they are now perceived as equivalent to, or in some cases, even better than the national brand (NB) (Dawes and Nenycz- Thiel, 2013). Improving the brand image through management efforts is essential to achieve product differentiation for PLBs and obtain a competitive advantage (Collins and Lindley, 2003; Pepe et al., 2012). Therefore, in this study, the brand image built from branding, whether for MSME PLBs or the other two categories, will significantly influence the attitude formed by the consumers. Effective branding leads to positive attitudes, while the poor branding may reduce consumer attitudes.

The results indicate that various independent variables related to attitude towards PLB are significant. When divided into brand categories, the results remain significant in all categories. The consumers form different perception values when receiving offers and consider whether the product falls into the category of food products or others (Sinha and Verma, 2020). However, in the discussion regarding attitude, both brand and product categories become irrelevant. It is consistent with the study by Mumin and Phang (2021), which uses the product category as a moderating variable. The results of this study make a new contribution by adapting brand categories that emphasize the context of PLB products in relation to MSMEs. Previous studies have seen product categories as an important aspect of consumer decision-making. This study places the brand category as a moderating variable by providing stimuli to three different prod-

uct categories to respondents whose results are the Brand Category variable, which is found to moderate two of the five antecedent variables in the study.

IMPLICATIONS

The study's outcomes are expected to bring academic and practical benefits. Academically, it will contribute to private-label research in Indone- sia, focusing on SMEs as suppliers. Practically, the findings will offer insights into consumer perceptions of SME-produced private-label products, promoting their wider implementation and positive brand image in retail. The retailers can leverage these insights to enhance loyalty programs, impro- ve brand image, and capitalize on local origin indi- cations through store layout design.

RECOMMENDATIONS

The limitations of this study are related to the research scope, which is only focused on minimarkets. Furthermore, this research is also limited totwominimarketbrandsinIndonesia. Inaddition,

the demographics of respondents, which are dominated by age profiles and relatively low spending ranges, make this research limited in view of perception trends in the age group and higher spending ranges. Due to this study's limitations, several suggestionsareputforwardforpossiblefuturestu- dies. Future research can develop and fill in gaps in this study with recommendations, including ex- panding the scope of research on certain types of retail formats and PLB in the snack food category.

Future research can look for influences on purchasing MSME PLB categories outside of snacks.

CONCLUSIONS

Based on the data processing and hypothesis testing results, the study concludes that Store Loyalty, Perceived Risk, and Brand Image significantly influence consumer attitudes toward private-label purchases. At the same time, Store Image and Price Consciousness show no significant effect. Attitudetowardbuyingprivate-labelproducts exhibits a significant positive impact on Purchase Intention. Moreover, the study utilizes three brand categories as moderating variables: PLBs produced in collaboration with a national brand, the PLBs produced by SMEs, and snack products using independent MSME branding. The Brand Category

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857 variable significantly moderates Store Loyalty and

Brand Image antecedent variables, offering a fresh contribution by contextualizing PLB products in relation to MSMEs and demonstrating the significance of product categories in consumer decision- making. The results of this study make a new contribution by adapting brand categories that emphasize the context of the PLB products in relation to MSMEs. Previous studies have seen product categories as an important aspect of consumer decision-making. This study places the brand category as a moderating variable by giving stimuli to three different product categories to respondents whose results are the Brand Category variable, which is found to moderate two of the five antecedent variables in the study.

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