TY - JOUR
T1 - Effect of Store Brand Introduction on Channel Price Leadership
T2 - An Empirical Investigation
AU - Chung, Hwan
AU - Lee, Eunkyu
N1 - Publisher Copyright:
© 2017 New York University
PY - 2018/3
Y1 - 2018/3
N2 - In this study, we conduct an empirical investigation of the impact of store brand introductions on the price leadership relations in a distribution channel between a retailer and national brand manufacturers. We analyze a multi-product category retail database from a major grocery chain, which captures both a period before and a period after the introduction of a store brand in each product category. By applying the time series approach to this data set, we show that store brand introductions frequently lead to price leadership changes, generally in a more favorable direction for the retailer than for the national brand manufacturer, evidenced by either the decay of the manufacturers’ price leadership or the rise of the retailer's price leadership. However, such a change is not universal but tends to be concentrated among a certain quality tier of national brands, which is not always the low-tier, but sometimes the top-tier despite the low-price low-quality position of the store brand. The patterns detected in the data suggest that these changes are likely to reflect the retailer's strategic effort to reshape the price leadership environment in a product category aided by the enhanced bargaining power and managerial sophistication that accompanied the store brand introductions.
AB - In this study, we conduct an empirical investigation of the impact of store brand introductions on the price leadership relations in a distribution channel between a retailer and national brand manufacturers. We analyze a multi-product category retail database from a major grocery chain, which captures both a period before and a period after the introduction of a store brand in each product category. By applying the time series approach to this data set, we show that store brand introductions frequently lead to price leadership changes, generally in a more favorable direction for the retailer than for the national brand manufacturer, evidenced by either the decay of the manufacturers’ price leadership or the rise of the retailer's price leadership. However, such a change is not universal but tends to be concentrated among a certain quality tier of national brands, which is not always the low-tier, but sometimes the top-tier despite the low-price low-quality position of the store brand. The patterns detected in the data suggest that these changes are likely to reflect the retailer's strategic effort to reshape the price leadership environment in a product category aided by the enhanced bargaining power and managerial sophistication that accompanied the store brand introductions.
KW - Distribution channels
KW - Price leadership
KW - Retail pricing
KW - Store brands
KW - Time series
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U2 - 10.1016/j.jretai.2017.10.001
DO - 10.1016/j.jretai.2017.10.001
M3 - Article
AN - SCOPUS:85032201388
SN - 0022-4359
VL - 94
SP - 21
EP - 32
JO - Journal of Retailing
JF - Journal of Retailing
IS - 1
ER -