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Effects of the private-label invasion in food industries

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  • Ward, Michael B.
  • Shimshack, Jay P.
  • Perloff, Jeffrey M.
  • Harris, J. Michael

Abstract

Using supermarket scanner data, we test a variety of hypotheses from trade journals about the invasion of private-label food products. According to conventional industry wisdom, name-brand firms defended their brands against new private-label products by lowering their prices, engaging in additional promotional activities, and increasingly differentiating their products. Our empirical evidence is inconsistent with these beliefs.

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File URL: http://mpra.ub.uni-muenchen.de/22186/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 22186.

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Date of creation: Nov 2002
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Publication status: Published in American Journal of Agricultural Economics 4.84(2002): pp. 961-973
Handle: RePEc:pra:mprapa:22186

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Keywords: private label; entry; price; promotional activity; differentiation; supermarket;

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  1. 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, Wiley Blackwell, Wiley Blackwell, vol. 40(2), pages 157-71, June.
  2. Nelson, Philip B. & Hilke, John C., 1991. "Retail featuring as a strategic entry or mobility barrier in manufacturing," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 9(4), pages 533-544, December.
  3. Perloff, Jeffrey M. & Suslow, Valerie Y. & Seguin, Paul J., 1996. "Higher Prices from Entry: Pricing of Brand-Name Drugs," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series, Department of Agricultural & Resource Economics, UC Berkeley qt1sh175fc, Department of Agricultural & Resource Economics, UC Berkeley.
  4. Dierker, E. & Dierker, H., 1998. "Product Differentiation and Market Power," Papers, Washington St. Louis - School of Business and Political Economy 9804, Washington St. Louis - School of Business and Political Economy.
  5. Bontems, Philippe & Monier-Dilhan, Sylvette & Requillart, Vincent, 1999. "Strategic Effects of Private Labels," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 26(2), pages 147-65, June.
  6. Salop, Steven, 1977. "The Noisy Monopolist: Imperfect Information, Price Dispersion and Price Discrimination," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 44(3), pages 393-406, October.
  7. Cotterill, Ronald W. & Putsis, William P., Jr. & Dhar, Ravi, 2000. "Market Share and Price Setting Behavior For Private Labels and National Brands," Research Reports, University of Connecticut, Food Marketing Policy Center 25209, University of Connecticut, Food Marketing Policy Center.
  8. Richard G. Frank & David S. Salkever, 1997. "Generic Entry and the Pricing of Pharmaceuticals," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 6(1), pages 75-90, 03.
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  10. Mills, David E, 1995. "Why Retailers Sell Private Labels," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 4(3), pages 509-28, Fall.
  11. Perloff, Jeffrey M & Salop, Steven C, 1985. "Equilibrium with Product Differentiation," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 52(1), pages 107-20, January.
  12. MacDonald, James M, 2000. "Demand, Information, and Competition: Why Do Food Prices Fall at Seasonal Demand Peaks?," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 48(1), pages 27-45, March.
  13. Hinloopen, Jeroen & Martin, Stephen, 1997. "Market-Structure Determinants of National Brand-Private Label Price Differences of Manufactured Food Products: Comment," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 45(2), pages 219-23, June.
  14. Mills, David E, 1999. "Private Labels and Manufacturer Counterstrategies," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 26(2), pages 125-45, June.
  15. Kohn, Meir G. & Shavell, Steven, 1974. "The theory of search," Journal of Economic Theory, Elsevier, Elsevier, vol. 9(2), pages 93-123, October.
  16. Nijssen, Edwin J & Van Trijp, Hans C M, 1998. "Branding Fresh Food Products: Exploratory Empirical Evidence from the Netherlands," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 25(2), pages 228-42.
  17. Ronald Cotterill & William Putsis, 2000. "Market Share and Price Setting Behavior for Private Labels and National Brands," Review of Industrial Organization, Springer, Springer, vol. 17(1), pages 17-39, August.
  18. G. Galizzi & L. Venturini & S. Boccaletti, 1997. "Vertical relationships and dual branding strategies in the Italian food industry," Agribusiness, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 13(2), pages 185-195.
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