Can premium private labels compete with luxury brands: the impact of advertising on perceived luxuriousness

Increasingly, high-end retailers in various parts of the world are marketing premium private label products. This study examines the degree to which advertising can lead premium private labels to be perceived as luxurious and the factors that enhance this perception. Using a theoretical framework based on cue utilization theory and categorization theory, a model is proposed to describe the key factors driving perceived luxuriousness. The findings generally support the model and suggest that premium private labels should be advertised in a way that maximizes the image difference in comparison to regular private labels and equates them to a leading national brand. Additionally, advertising that emphasizes the superiority of the label’s quality relative to competitors and strong image congruity between the store and the brand can improve consumer perceptions of private label luxury brands. It is also found that store type (department store vs. hypermarket) influences the perceptual factors that drive perceived luxuriousness.