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Assessing the Impact of Retailer Store Brand Presence on Manufacturer Brands in an Equilibrium Framework

24 Pages Posted: 29 Sep 2011  

Michael Andrew Cohen

New York University (NYU) - Department of Marketing

Ronald W. Cotterill

University of Connecticut - Department of Agricultural and Resource Economics

Date Written: September 2011

Abstract

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.

Suggested Citation

Cohen, Michael Andrew and Cotterill, Ronald W., Assessing the Impact of Retailer Store Brand Presence on Manufacturer Brands in an Equilibrium Framework (September 2011). The Journal of Industrial Economics, Vol. 59, Issue 3, pp. 372-395, 2011. Available at SSRN: https://ssrn.com/abstract=1935212 or http://dx.doi.org/10.1111/j.1467-6451.2011.00460.x

Michael Andrew Cohen

New York University (NYU) - Department of Marketing ( email )

Henry Kaufman Ctr
44 W 4 St.
New York, NY
United States

Ronald W. Cotterill

University of Connecticut - Department of Agricultural and Resource Economics ( email )

1376 Storrs Road, Unit 4066
Storrs, CT 06269
United States

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