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Confirming the price effects of private labels development

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Author Info
Bontemps, C.
Orozco, V.
Réquillart, V.

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Abstract

We study the price response of national brands to the development of private labels. We use monthly data from a consumer survey reporting their purchases for 218 food products. We show that when private labels have a significant effect on national brands prices (144 cases over 218), that is positive (89%). We also show that the increase in the prices of national brand products is explained by a strategy of product differentiation. Finally, price reaction of national brands differs with the type of private labels they are facing. This paper confirms, on a larger number of products, previous empirical results. ...French Abstract : Les auteurs étudient la réponse en prix des producteurs de marques nationales au développement des marques de distributeurs. Ils utilisent des données mensuelles d'achats issues d'un panel de consommateurs, concernant 218 produits alimentaires. Ils montrent que le développement des marques de distributeurs a un effet significatif sur les prix des marques nationales (144 cas sur 218), qui est positif (89%). Ils montrent aussi que l'augmentation des prix des marques nationales est, en partie, expliquée par une stratégie de différenciation des producteurs de marques nationales. Enfin, la réaction en prix des marques nationales est différente suivant le type des marques de distributeurs. Ce papier confirme, sur un plus grand nombre de produits, nos précédents résultats empiriques.

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Publisher Info
Paper provided by French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse) in its series Economics Working Paper Archive (Toulouse) with number 200506.

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Length: 16 p.
Date of creation: 2005
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Handle: RePEc:rea:inrawp:200506

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Postal: INRA ESR - BP27 - 31326 Castanet Tolosan cedex - France
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Postal: INRA ESR - BP27 - 31326 Castanet Tolosan cedex - France
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Related research
Keywords: PRIVATE LABELS; PRICING; EMPIRICAL MODELS; FOOD PRODUCTS ; MARQUE DE DISTRIBUTEUR; DIFFERENCIATION DES PRODUITS; PRIX; CONSOMMATION DES MENAGES;

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Find related papers by JEL classification:
L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
D40 - Microeconomics - - Market Structure and Pricing - - - General

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  1. Christophe Bontemps & Valerie Orozco & Vincent Réquillart & Audrey Trevisiol, 2007. "Price Effects of Private Label Development," Journal of Agricultural & Food Industrial Organization, Berkeley Electronic Press, vol. 3(1), pages 1086-1086. [Downloadable!] (restricted)
  2. Antoine Bommier & Pierre Dubois, 2004. "Rotten Parents and Child Labor," Journal of Political Economy, University of Chicago Press, vol. 112(1), pages 240-248, February. [Downloadable!] (restricted)
    Other versions:
  3. Fiona Scott Morton & Florian Zettelmeyer, 2004. "The Strategic Positioning of Store Brands in Retailer--Manufacturer Negotiations," Review of Industrial Organization, Springer, vol. 24(2), pages 161-194, 03. [Downloadable!]
  4. Soberman, David A. & Parker, Philip M., 2004. "Private labels: psychological versioning of typical consumer products," International Journal of Industrial Organization, Elsevier, vol. 22(6), pages 849-861, June. [Downloadable!] (restricted)
  5. André Bonfrer & Pradeep K. Chintagunta, 2004. "Store Brands: Who Buys Them and What Happens to Retail Prices When They Are Introduced?," Review of Industrial Organization, Springer, vol. 24(2), pages 195-218, 03. [Downloadable!]
  6. 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.
  7. Staahl Gabrielsen, T. & Sorgard, L., 2000. "Private Labels, Price Rivalry, and Public Policy," Papers 8/00, Norwegian School of Economics and Business Administration-.
    Other versions:
  8. Mills, David E, 1995. "Why Retailers Sell Private Labels," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 4(3), pages 509-28, Fall.
  9. 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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