Private-Labels and the Channel Relationship: A Cross-Category Analysis

Posted: 1 Oct 1998

See all articles by Chakravarthi Narasimhan

Chakravarthi Narasimhan

Washington University in St. Louis - John M. Olin Business School

Ronald T. Wilcox

Carnegie Mellon University

Multiple version iconThere are 2 versions of this paper

Abstract

Retailers introduce private-labels in a category not only to gain profits directly from the private-label but also to use as a strategic weapon to elicit concessions from the national brand manufacturers. We show that, in certain categories, the retailer can gain better terms of trade by introducing a private-label. The ability of the retailer to use the private-label for this purpose is hypothesized to be inversely related to the risks consumers associate with purchasing in that category. The implications of our model are supported by data from a cross-section of grocery categories.

JEL Classification: L81, L10

Suggested Citation

Narasimhan, Chakravarthi and Wilcox, Ronald T., Private-Labels and the Channel Relationship: A Cross-Category Analysis. Available at SSRN: https://ssrn.com/abstract=112561

Chakravarthi Narasimhan

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive, Campus Box 1133
Olin School of Business
St. Louis, MO 63130-4899
United States
314-935-6313 (Phone)
314-935-6359 (Fax)

Ronald T. Wilcox (Contact Author)

Carnegie Mellon University ( email )

Baker Hall 260
Pittsburgh, PA 15213-3890
United States
412-268-2268 (Phone)
412-268-6837 (Fax)

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