Do Retailers Manipulate Prices to Favour Private Label over Brands?

Ratula Chakraborty
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Ratula Chakraborty: Centre for Competition Policy and Norwich Business School, University of East Anglia

No 2018-02, Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) from Centre for Competition Policy, University of East Anglia, Norwich, UK.

Abstract: Retailers act as both customers and competitors for brand manufacturers when selling private label in direct competition with brands. This paper considers whether retailers exploit this double-agent position to practice switch marketing, manipulating elements of the retail marketing mix to encourage shoppers to switch from buying brands to private label. Such manipulation can be blatant in nature, such as comparative advertising, brand delisting trials, copycat packaging, and biased shelf allocation. However, the key interest in this paper concerns whether retailers use a more subtle means through strategic pricing to favour private label over brands. The paper reveals very different price treatments of brands and matching private label goods. However, the identified pricing patterns are more indicative of retailers manipulating prices for the sake of segmenting consumers rather than displacing brands.

Keywords: brand; private label; retailer; pricing; marketing; manipulation (search for similar items in EconPapers)
JEL-codes: K21 L13 L14 L40 (search for similar items in EconPapers)
Date: 2018-10-01
New Economics Papers: this item is included in nep-com, nep-ipr, nep-mkt and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:uea:ueaccp:2018_02

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