Assessing the Impact of Retailer Store Brand Presence on Manufacturer Brands in an Equilibrium Framework
Michael Andrew Cohen
New York University (NYU) - Department of Marketing
Ronald W. Cotterill
University of Connecticut - Department of Agricultural and Resource Economics
The Journal of Industrial Economics, Vol. 59, Issue 3, pp. 372-395, 2011
This article assesses the impact of retailer store brand products on manufacturer brand prices, profitability and consumer welfare in Boston's white fluid milk market. Estimates from a random coefficients logit demand model are used to specify and test a set of pricing games. Under the selected model, milk manufacturers are Stackelberg leaders to retailers, and store brand milks are procured by retailers at cost. The model is used to investigate counterfactual markets without retailer store brand milks. Counterfactual Simulation results indicate that store brands increase channel profits, retailer profits and consumer welfare, while having mixed effects on equilibrium retail prices.
Number of Pages in PDF File: 24Accepted Paper Series
Date posted: September 29, 2011
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