The Introduction and Performance of Store Brands

Abstract

We present an analytical framework for understanding what makes a product category more conducive for store brand introduction. We also investigate market characteristics that help explain differences in store brand market share across product categories. Our findings suggest that the introduction of a store brand is likely to increase retailer's profits in a product category if the cross-price sensitivity among national brands is low and the cross-price sensitivity between the national brands and the store brand is high. Our model predicts that the store brand share would also be greater under these conditions. In addition, we find that the introduction of a store brand is more likely to lead to an increase in category profits if the category consists of a large number of national brands---even though the store brand market share is expected to be lower when there are a large number of national brands. We compare the key predictions of our model with data on 426 grocery product categories. The data are consistent with the predictions of the model.private labels, retailing, new product introduction, pricing, distribution channels, game theory

Factors Influencing Customer Perceived Quality and Purchase Intention toward Private Labels in the Vietnam Market: The Moderating Effects of Store Image

“…Traditionally, a private label (also called as store brand, own brand, house brand or distributor's brand) is early identified as "one which owned and controlled by an organization who primary economic commitment is distribution" (Schutte, 1969, p. 9). Sometimes private labels are owned, controlled and sold exclusively by a retailer (Raju, Sethuraman, & Dhar, 1995). Hoch (1996) conceptualizes that private labels have various forms, but they are usually carried by retailers such as an exclusive trademark, retailers' own name or other names that are only sold in the retailer's market.…”

Consumer preferences of store brands: Role of prior experiences and value consciousness

“…Additional studies focused on estimating the impact of national and store brands ' marketing actions on brand sales or market share, 32 developing optimal marketing strategies for national and store brands, 33 understanding whether store brands attract the same value conscious consumers, 34 building loyalty through store brands, 35 -37 attitudes toward store brands, 38 and the role of store brands on retail margins. 39 More recent studies focused on investigating the relationship between household ' s private label share and its behavioral store loyalty 40 and predicting demand for store brands across categories.…”

Do private labels increase retailer bargaining power?

“…Private labels now account 22.3% of the units sold in U.S. supermarkets; further, they are category leaders in as many as 25% of the 775 categories in which they are represented (Private Label Yearbook 2009, published by the Private Label Manufacturer Association). The growing importance of private labels has spawned an academic literature empirically investigating the factors that facilitate its success (Hoch and Banerji, 1993;Starzynsky 1993, Raju et al, 1995Hoch, 1996;Narasimhan and Wilcox, 1997;Dhar and Hoch, 1997;Chintagunta et al, 2002, Cotterill et al 2000Hoch et al 2006, Sethuraman 2000. Researchers have empirically identified three sets of factors: (1) demand characteristics (consumer demographics and preferences) (2) costs and benefits of private labels (e.g.…”