Published by:
MIT Sloan School of Management
Length: 16 pages
Share a link:
https://casecent.re/p/6630
Write a review
|
No reviews for this item
This product has not been used yet
Abstract
Private labels or store brands are an important source of profits for retailers and a formidable source of competition for national brand manufacturers. Market share of private labels, however, varies dramatically across categories. The authors propose and test a framework to explain this variation in order to understand the determinants of private label success in the US supermarket industry. They find that private labels perform better in large categories offering high margins. Private labels also do better when competing against fewer national manufacturers who spend less on national advertising. Surprisingly, high quality is much more important than lower price.
About
Abstract
Private labels or store brands are an important source of profits for retailers and a formidable source of competition for national brand manufacturers. Market share of private labels, however, varies dramatically across categories. The authors propose and test a framework to explain this variation in order to understand the determinants of private label success in the US supermarket industry. They find that private labels perform better in large categories offering high margins. Private labels also do better when competing against fewer national manufacturers who spend less on national advertising. Surprisingly, high quality is much more important than lower price.