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Private labels and the specific retailer's role


  • Bergès-Sennou, F.
  • Rey, P.


Private labels (or own-brand products) play a prominent role for consumers in their perception of retailers' reputation. In a model where products are experience goods, a retailer has the opportunity to introduce his own store brand, or to sell a branded product. However, the retailer does only control the production process in a case of a private label. We find that even if the national brand is the less costly product, the retailer prefers to introduce a private label for low frequently purchased goods. Controlling fully the production process for his own brand allows the retailer not to leave consequent rents to the national brand manufacturer for being certain of getting a high quality national brand. Besides, when the relailer does not know the market demand level when he takes the product decision to introduce, there are some cases where the private label is intoduced whereas it would have been more efficient to sell a national brand. Last, we find that an increase in retailer's size favors the introduction of private label. ...French Abstract : Les marques de distributeurs (MDD) jouent un rôle important auprès des consommateurs vis-à-vis de la réputation du détaillant. Dans un modèle oû les produits sont des biens d'expérience, le distributeur a le choix entre vendre sa MDD ou un bien de marque (marque nationale : MN). Le distributeur ne contrôle cependant le processus de production que s'il commercialise une MDD. Les auteurs montrent que même lorsque la marque nationale est le produit le moins coûteux, le détaillant préfèrera pour des biens achetés fréquemment, introduire une MDD. Le fait de contrôler entièrement le processus de production permet au détaillant de ne pas laisser des rentes coûteuses au producteur de MN afin d'être certain d'avoir un produit MN de haute qualité. Si le distributeur ne connaît pas le niveau de demande au moment oû il prend le choix pour le produit à commercialiser, il existe des cas oû la MDD est introduite alors qu'il aurait été plus efficace de mettre en vente la MN. Ils montrent enfin qu'un accroissement de la taille du détaillant favorise l'introduction d'une MDD.

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  • Bergès-Sennou, F. & Rey, P., 2004. "Private labels and the specific retailer's role," Economics Working Paper Archive (Toulouse) 200413, French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse).
  • Handle: RePEc:rea:inrawp:200413

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    References listed on IDEAS

    1. d'Aspremont, C & Gabszewicz, Jean Jaskold & Thisse, J-F, 1979. "On Hotelling's "Stability in Competition"," Econometrica, Econometric Society, vol. 47(5), pages 1145-1150, September.
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    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure


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