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Private labels and public quality standards: How can consumer trust be restored after the mad cow crisis?

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Author Info
Éric Giraud-Héraud ()
Lamia Rouached ()
Louis-Georges Soler ()

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Abstract

In those sectors faced with questions of food safety (meat, fruit, vegetables), new private labels have been set up in Europe in order to restore consumer trust. In this paper, we perform a theoretical analysis of these private labels. We propose an original model of vertical relationships between producers and retailers which takes into account two supply sources through (i) a competitive spot market on which the retailers buy a minimum quality standard product and (ii) supply contracts aimed at marketing higher quality private labels. We study how producers and retailers could cooperate in setting up these new labels. From a public point of view, we show the complementarity of a moderate increase in public quality standards and the creation of these new private labels. Copyright Springer Science + Business Media, LLC 2006

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File URL: http://hdl.handle.net/10.1007/s11129-006-2777-5
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Publisher Info
Article provided by Springer in its journal Quantitative Marketing and Economics.

Volume (Year): 4 (2006)
Issue (Month): 1 (March)
Pages: 31-55
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Handle: RePEc:kap:qmktec:v:4:y:2006:i:1:p:31-55

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Web page: http://www.springerlink.com/link.asp?id=111240

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Related research
Keywords: Vertical relationship; Retailer; Food safety; Minimum quality standard; Private labels;

References listed on IDEAS
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  1. Cotterill, Ronald W & Putsis, William P, Jr & Dhar, Ravi, 2000. "Assessing the Competitive Interaction between Private Labels and National Brands," Journal of Business, University of Chicago Press, vol. 73(1), pages 109-37, January. [Downloadable!] (restricted)
  2. Connor, John M & Peterson, Everett B, 1992. "Market-Structure Determinants of National Brand-Private Label Price Differences of Manufactured Food Products," Journal of Industrial Economics, Blackwell Publishing, vol. 40(2), pages 157-71, June. [Downloadable!] (restricted)
  3. David Dickinson & DeeVon Bailey, 2002. "Meat Traceability: Are U.S. Consumers Willing To Pay For It?," Working Papers 2002-07, Utah State University, Department of Economics. [Downloadable!]
    Other versions:
  4. Schmalensee, Richard, 1987. "Competitive advantage and collusive optima," International Journal of Industrial Organization, Elsevier, vol. 5(4), pages 351-367. [Downloadable!] (restricted)
  5. Tian Xia & Richard J. Sexton, 2004. "The Competitive Implications of Top-of-the-Market and Related Contract-Pricing Clauses," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 86(1), pages 124-138, 02. [Downloadable!] (restricted)
  6. Jayson L. Lusk & Jutta Roosen & John A. Fox, 2003. "Demand for Beef from Cattle Administered Growth Hormones or Fed Genetically Modified Corn: A Comparison of Consumers in France, Germany, the United Kingdom, and the United States," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 85(1), pages 16-29, 02. [Downloadable!] (restricted)
    Other versions:
  7. Mills, David E, 1999. "Private Labels and Manufacturer Counterstrategies," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 26(2), pages 125-45, June.
  8. Lutz, Stefan & Lyon, Thomas P & Maxwell, John W, 2000. "Quality Leadership When Regulatory Standards Are Forthcoming," Journal of Industrial Economics, Blackwell Publishing, vol. 48(3), pages 331-48, September. [Downloadable!] (restricted)
  9. Mills, David E, 1995. "Why Retailers Sell Private Labels," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 4(3), pages 509-28, Fall.
  10. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August. [Downloadable!] (restricted)
  11. Slade, Margaret E, 1995. "Product Rivalry with Multiple Strategic Weapons: An Analysis of Price and Advertising Competition," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 4(3), pages 445-76, Fall.
  12. Crampes, Claude & Hollander, Abraham, 1995. "Duopoly and quality standards," European Economic Review, Elsevier, vol. 39(1), pages 71-82, January. [Downloadable!] (restricted)
    Other versions:
  13. Besanko, David & Donnenfeld, Shabtai & White, Lawrence J, 1988. "The Multiproduct Firm, Quality Choice, and Regulation," Journal of Industrial Economics, Blackwell Publishing, vol. 36(4), pages 411-29, June. [Downloadable!] (restricted)
  14. Bontems, Philippe & Monier-Dilhan, Sylvette & Requillart, Vincent, 1999. "Strategic Effects of Private Labels," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 26(2), pages 147-65, June.
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