Manufacturer Encroachment, Store Brand Introduction and Sales Modes

Wen Tao ()
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Wen Tao: Shanghai Maritime University, Institute of Logistics Science & Engineering

A chapter in Proceedings of the 5th International Conference on Economic Management and Big Data Application (ICEMBDA 2024), 2024, pp 583-602 from Springer

Abstract: Abstract Reselling and agency selling are two common modes used by manufacturers to sell products through e-tailers, in addition, manufacturers may establish direct channel to encroach on the market, and e-tailers could introduce store brands to compete with them. This paper explores the interaction between the manufacturer’s encroachment, sales modes and the e-tailer’s store brand strategy. Our findings reveal that e-tailer is more likely to introduce store brand at moderate levels of agency fees when there is no manufacturer encroachment, whereas e-tailer is more likely to introduce store brand at lower or higher levels of agency fees when manufacturer encroaches and choosees a dual-channel structure. In addition, a moderate increase in the quality of the store brand facilitates the e-tailer’s the introduction strategy, but a higher quality may have the opposite effect. When the agency fee is at a low level, the manufacturer’s direct-only channel structure can deter e-tailer from introducing store brand if the direct channel disadvantage is small; manufacturer’s encroachment strategy can also keep store brand out of the market when the agency fee is at a moderate level.

Keywords: reselling; agency selling; manufacture encroachment; store brand; game theory (search for similar items in EconPapers)
Date: 2024
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DOI: 10.2991/978-94-6463-638-3_58

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