Premium store brand: Product development collaboration between retailers and national brand manufacturers

Reiya Hara and Nobuo Matsubayashi

International Journal of Production Economics, 2017, vol. 185, issue C, 128-138

Abstract: Premium store brands (PSBs), a type of store brand (SB) that effectively matches customer preferences and thus differs horizontally from national brands (NBs), have become increasingly popular. This study focuses on the strategic introduction of a PSB through collaboration between a retailer and a national brand manufacturer (NBM). To understand their strategic interactions when introducing PSBs, we employ a game-theory model based on Hotelling's linear city model. Our results indicate that coordination between a retailer and an NBM in providing a PSB can be difficult, and thus, their collaboration does not necessarily benefit either party. Nevertheless, we show that if SBs have a relatively high value and therefore, face intense competition from NBs, then both channel members can benefit from developing and introducing a PSB to complement the NB. Our results also show that introducing multiple PSBs increases the possibility of successful collaborations. These results are consistent with the empirical observations of SB suppliers in actual markets, in which major NBMs often refuse to produce an SB, though are likely to supply PSBs that effectively match consumers' needs.

Keywords: Private label; Horizontal differentiation; Cannibalization; Channel coordination; Customization; Operations–marketing interface; Hotelling model; Game theory (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0925527316304042
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:proeco:v:185:y:2017:i:c:p:128-138

DOI: 10.1016/j.ijpe.2016.12.024

Access Statistics for this article

International Journal of Production Economics is currently edited by Stefan Minner

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