Defensive strategy against a private label: Building brand premium for retailer cooperation

S. Chan Choi

Journal of Retailing and Consumer Services, 2017, vol. 34, issue C, 335-339

Abstract: We build a game-theoretic model of price competition between a national brand manufacturer and a retailer that also sells its private label. In particular, we examine a national brand's strategy of building brand premium in the context of channel coordination. The importance of national brand's brand equity has been well-documented in many empirical and behavioral studies. We reinforce the argument that building brand premium should be the first line of defense for a national brand instead of aggressively cutting wholesale price. Not only does the national brand manufacturer benefit from it, but also the retailer who sells both the national brand and its own private label has less incentive to promote the latter. Therefore, it can induce retailer cooperation, which is essential for a successful strategy in a distribution channel.

Keywords: Private label; Price competition; Brand premium; Channel distribution (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joreco:v:34:y:2017:i:c:p:335-339

DOI: 10.1016/j.jretconser.2016.07.011

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