Implementing online store for national brand competing against private label

Nawel Amrouche and Ruiliang Yan

Journal of Business Research, 2012, vol. 65, issue 3, 325-332

Abstract: We propose a game-theoretic model in three contexts. First, only the national brand (NB) is offered through a traditional retailer. Second, the private label (PL) is introduced by the traditional retailer. Finally, the NB's manufacturer opens an online store. We reassess the benefit of introducing the PL and investigate the profitability of implementing an online store. We found that the retailer is not always enjoying the PL's introduction. Also, the manufacturer could benefit from that strategy. The quality differential between the NB and the PL, the PL's potential and the cross-price competitions are all important factors to determine the result of PL's introduction. Hence, the manufacturer opens the online store either to counter the threat of such strategy or to expand his market.

Keywords: Private label; Dual channels; Game theory; Pricing strategies (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:65:y:2012:i:3:p:325-332

DOI: 10.1016/j.jbusres.2011.04.008

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