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Understanding Competition between Retailers and Manufacturers: An Integrated Analysis of Store Brand and National Brand Deal Usage

22 Pages Posted: 6 May 2003  

Kusum L. Ailawadi

Tuck School of Business at Dartmouth

Karen Gedenk

University of Cologne

Scott Neslin

Tuck School of Business at Dartmouth

Date Written: May 2003

Abstract

This paper jointly examines how consumers' perceptions drive their usage of store brands and deals for national brands. We find that both behaviors are influenced by economic as well as hedonic factors. Among hedonic factors, peer approval plays an important role in determining both behaviors. Among economic factors, the most important driver of store brand usage is perceived quality, and the most important driver of national brand deal usage is perceived savings. We also find a negative
intrinsic relationship between store brand and national brand deal usage. Overall, our results suggest a competitive advantage for store brands. Store brands can attract many consumers by increasing their perceived quality. Manufacturers would then have a hard time attracting back these consumers even if they increase deal savings.

Keywords: Store Brands, National Brands, Deal Proneness, Sales Promotion, Retailing

Suggested Citation

Ailawadi, Kusum L. and Gedenk, Karen and Neslin, Scott, Understanding Competition between Retailers and Manufacturers: An Integrated Analysis of Store Brand and National Brand Deal Usage (May 2003). Tuck Business School Working Paper No. 03-16. Available at SSRN: https://ssrn.com/abstract=404641 or http://dx.doi.org/10.2139/ssrn.404641

Kusum Ailawadi (Contact Author)

Tuck School of Business at Dartmouth ( email )

100 Tuck Hall
Hanover, NH 03755
United States
603-646-2845 (Phone)
603-646-1308 (Fax)

Karen Gedenk

University of Cologne ( email )

Albertus-Magnus-Platz
50935 Köln
Germany
+49-221-470-2639 (Phone)

HOME PAGE: http://www.marketing-koeln.de

Scott Neslin

Tuck School of Business at Dartmouth ( email )

Hanover, NH 03755
United States

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