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

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  • Chan Choi, S.

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.

Suggested Citation

  • Chan Choi, S., 2017. "Defensive strategy against a private label: Building brand premium for retailer cooperation," Journal of Retailing and Consumer Services, Elsevier, vol. 34(C), pages 335-339.
    • Handle: RePEc:eee:joreco:v:34:y:2017:i:c:p:335-339
    DOI: 10.1016/j.jretconser.2016.07.011
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    References listed on IDEAS

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    Cited by:

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    2. Bhat Ishfaq Hussain & Singh Sapna, 2018. "Examining the moderating effect of shopping value on private-label and loyalty in Indian grocery stores," Management & Marketing, Sciendo, vol. 13(1), pages 748-760, March.
    3. Assarzadegan, Parisa & Hejazi, Seyed Reza & Raissi, Gholam Ali, 2020. "An evolutionary game theoretic model for analyzing retailers’ behavior when introducing economy and premium private labels," Journal of Retailing and Consumer Services, Elsevier, vol. 57(C).
    4. Mao, Zhixin & Duan, Yongrui & Liu, Wenxia, 2023. "Consumers’ choice of private label considering reference price and moderating effect," Journal of Retailing and Consumer Services, Elsevier, vol. 71(C).
    5. Wu, Lifang & Yang, Wei & Wu, Jessica, 2021. "Private label management: A literature review," Journal of Business Research, Elsevier, vol. 125(C), pages 368-384.
    6. Feiyan Han & Herui Wang & Hongyu Lv & Bo Li, 2022. "Research on Manufacturers’ Referral Strategy Considering Store Brand Retailers and Traditional Retailers," Mathematics, MDPI, vol. 10(18), pages 1-23, September.
    7. Maksymilian Czeczotko & Hanna Górska-Warsewicz & Wacław Laskowski, 2020. "Towards Sustainable Private Labels—What is the Consumer Behavior Relating to Private Labels in the UK and Poland?," Sustainability, MDPI, vol. 12(15), pages 1-18, July.
    8. Pérez-Santamaría, Samanta & Martos-Partal, Mercedes, 2021. "Analyzing the effects of private-label supplier disclosure on retailer image," Journal of Retailing and Consumer Services, Elsevier, vol. 62(C).
    9. Hanna Górska-Warsewicz & Sylwia Żakowska-Biemans & Maksymilian Czeczotko & Monika Świątkowska & Dagmara Stangierska & Ewa Świstak & Agnieszka Bobola & Julita Szlachciuk & Karol Krajewski, 2018. "Organic Private Labels as Sources of Competitive Advantage—The Case of International Retailers Operating on the Polish Market," Sustainability, MDPI, vol. 10(7), pages 1-28, July.

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