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Manufacturer’s channel strategy with retailer’s store brand

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  • Lisha Wang
  • Jing Chen
  • Huaming Song

Abstract

This paper examines the manufacturer’s channel strategy as it considers introducing an online channel to sell its own national brand (NB) product, when the brick-and-mortar retailer sells both the NB and its own lower-quality store brand (SB) product. The manufacturer is motivated to introduce an online channel when the customers’ ‘hassle cost' of shopping online is relatively low and their transportation cost is relatively high. However, our results also demonstrate that when the online shopping hassle cost is high and the transportation cost is low, and even when there are very few sales in the online channel, the online-sales strategy can still contribute positively to the manufacturer’s profit. The introduction of the online channel by the manufacturer may result in a win-win situation for the manufacturer and the retailer. As a corollary effect, when the retailer is able to determine the SB quality, it should position the SB at a lower quality level to avoid competition with the manufacturer’s online channel.

Suggested Citation

  • Lisha Wang & Jing Chen & Huaming Song, 2021. "Manufacturer’s channel strategy with retailer’s store brand," International Journal of Production Research, Taylor & Francis Journals, vol. 59(10), pages 3042-3061, May.
    • Handle: RePEc:taf:tprsxx:v:59:y:2021:i:10:p:3042-3061
    DOI: 10.1080/00207543.2020.1745313
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    Citations

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    Cited by:

    1. Li-Hao Zhang & Cheng Zhang & Jie Yang, 2023. "Impacts of power structure and financing choice on manufacturer’s encroachment in a supply chain," Annals of Operations Research, Springer, vol. 322(1), pages 273-319, March.
    2. Wu, Huamin & Li, Guo & Zheng, Hong & Zhang, Xuefeng, 2022. "Contingent channel strategies for combating brand spillover in a co-opetitive supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 164(C).
    3. Huang, Lingchen & Huang, Zongsheng & Liu, Bin, 2022. "Interacting with strategic waiting for store brand: Online selling format selection," Journal of Retailing and Consumer Services, Elsevier, vol. 67(C).
    4. Li, Hengyu & Chen, Huangen & Chai, Junwu & Shi, Victor, 2023. "Private label sourcing for an e-tailer with agency selling and service provision," European Journal of Operational Research, Elsevier, vol. 305(1), pages 114-127.
    5. Cheng, Fei & Chen, Tong & Shen, Yuting & Jing, Xiaodong, 2022. "Impact of green technology improvement and store brand introduction on the sales mode selection," International Journal of Production Economics, Elsevier, vol. 253(C).
    6. Wang, Lisha & Chen, Jing & Lu, Yali, 2022. "Manufacturer's channel and logistics strategy in a supply chain," International Journal of Production Economics, Elsevier, vol. 246(C).
    7. Gongbing Bi & Hao Pan, 2023. "The Impact of Platform Encroachment on the Manufacturer’s Financing Strategy," Sustainability, MDPI, vol. 15(5), pages 1-21, March.
    8. Li, Dan & Liu, Yongmei & Hu, Junhua & Chen, Xiaohong, 2021. "Private-brand introduction and investment effect on online platform-based supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 155(C).
    9. Junyi Zhong & Jiazhen Huo, 2023. "How Does Green Store Brand Introduction Influence the Effects of Government Subsidy on Supply Chain Performance?," Mathematics, MDPI, vol. 11(14), pages 1-22, July.
    10. Hsiao, Lu & Xiong, Hui, 2022. "Store brand introduction, retail competition and manufacturers’ coping strategies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 165(C).

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