Store Vs. National Brands: A Product Line Mix Puzzle
AbstractThis paper examines retailers' strategic decisions about store brand introduction when each retailer can stock a limited number of brands. The different product line mix equilibria depend on demand parameters that measure the cross-effect across national and store brands and the cross-effect within each brand type, thus leading to a simple testable implication. Store brand introduction is determined by the combination of the three effects that result from replacing a national brand by a store brand; the direct effect, the exclusivity effect and the in-store effect. Interestingly enough, we identify conditions under which similar retailers take different decisions concerning their product line mix.
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Bibliographic InfoPaper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2007-10.
Length: 44 pages
Date of creation: Apr 2007
Date of revision:
Publication status: Published by Ivie
store brands; retail duopoly; product line mix;
Find related papers by JEL classification:
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-04-21 (All new papers)
- NEP-COM-2007-04-21 (Industrial Competition)
- NEP-MKT-2007-04-21 (Marketing)
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