The Role of National Culture on Own-Label Brands Performance

The performance of own-label brands varies enormously across countries, with high penetration in Western countries but limited success in Eastern countries. This study aims to provide insights into the role of national culture... [ view full abstract ]

The performance of own-label brands varies enormously across countries, with high penetration in Western countries but limited success in Eastern countries. This study aims to provide insights into the role of national culture on own-label brands performance. We formulates and tests a conceptual framework linking Hofstede’s five cultural dimensions (power distance, individualism, masculinity, uncertainty avoidance and long-term orientation) to retail market development (size of the retail market) and own-label brands performance, controlling for three socio-economic variables: GDP per capita, Gini index and Government expenditure. Our data involving 65 countries show that among the five cultural dimensions: power distance, individualism and uncertainty avoidance have a significant role on retail market development, which in turn, significantly influences own-label brands performance. Moreover, results show that individualism and long-term orientation have a significant direct impact on own-label brands’ performance. Past studies on this domain are restricted to one or two cultural dimensions and generally involve a limited number of countries. This research would therefore pioneer in investigating the five national cultural dimensions across a high number of nations. The findings are important for retailers and may help them to adapt their own-label strategy according to the culture of the nations they are operating in.