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Mass Retailers' Advertising Strategies Against Commodity Stores

Author

Listed:
  • Fabian Bergès

    (UMR GREMAQ-INRA)

  • Sylvette Monier-Dilhan

    (INRA ODR)

Abstract

A retailer has different opportunities to advertise in the media: emphasizing the store image or promoting specifically its private label (PL). In the first option, advertising benefits all products sold, whereas in the alternative, only store brands are concerned by image improvement. We analyze the retailer's advertising campaign strategies when its competitor's format is a small commodity store. PL quality is endogenous and chosen according to the competitor's product range. We show the retailer prefers to advertise the store rather than its PL. However, this strategy may push commodity stores out of the market and reduce social welfare.

Suggested Citation

  • Fabian Bergès & Sylvette Monier-Dilhan, 2013. "Mass Retailers' Advertising Strategies Against Commodity Stores," Economics Bulletin, AccessEcon, vol. 33(4), pages 2968-2981.
    • Handle: RePEc:ebl:ecbull:eb-13-00507
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Advertising; Retailing; Competition.;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • M3 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising

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