EconPapers    
Economics at your fingertips  
 

What drives brands’ price response metrics? An empirical examination of the Chinese packaged goods industry

Bernadette J. van Ewijk, Els Gijsbrechts and Jan-Benedict E.M. Steenkamp

International Journal of Research in Marketing, 2022, vol. 39, issue 1, 288-312

Abstract: As competition among CPG brands intensifies in both emerging and developed markets, brand managers increasingly focus on price as the weapon-of-choice. This calls for an assessment of not only their own price response, but also of their competitive pricing power, and its antecedents. The authors propose a set of universally applicable ('etic') and country-specific ('emic') drivers of brand price elasticity, clout, and vulnerability, for the world’s largest emerging market (viz., China). Leveraging a unique and large-scale data set from this market, they find that high price response is not necessarily indicative of high clout, nor does it signal high vulnerability. Hence, all three price response metrics matter. They also uncover marked differences in the impact of brand- and category-level drivers on these three metrics. Established etic factors such as line length, distribution intensity, and stockpilability have a substantial effect on one or more price response metrics. Among the emic factors, Chinese embeddedness, and especially social demonstrance play an important role: it strongly drives down brands’ price elasticity, but also reduces the intensity of price competition in the category and makes brands less vulnerable to rival actions. Foreign brands, in contrast, exhibit higher price response, and do not enjoy higher clout nor lower vulnerability than their domestic counterparts. Hence, they neither benefit from the aura, nor suffer from the liability, of foreignness. Overall, the study adds to empirical generalizations on the impact of price, and helps managers improve the effectiveness of their pricing strategies.

Keywords: Pricing; Clout; Vulnerability; CPG; China; Emerging markets (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167811621000860
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ijrema:v:39:y:2022:i:1:p:288-312

DOI: 10.1016/j.ijresmar.2021.10.005

Access Statistics for this article

International Journal of Research in Marketing is currently edited by Roland Rust

More articles in International Journal of Research in Marketing from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2022-07-02
Handle: RePEc:eee:ijrema:v:39:y:2022:i:1:p:288-312