Journal
ASIA-PACIFIC JOURNAL OF OPERATIONAL RESEARCH
Volume 35, Issue 4, Pages -Publisher
WORLD SCIENTIFIC PUBL CO PTE LTD
DOI: 10.1142/S0217595918500203
Keywords
Store brand; private label; power structure; supply chain; pricing competition; game theory
Categories
Funding
- National Natural Science Foundation of China [71371141, 71001080]
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In a framework where both power structure and consumer heterogeneity (brand loyalty and different willingness-to-pay for perceived quality) count, we study six noncooperative games (two Stackerberg and one Nash games with and without a store brand) between a national-brand manufacturer and a store-brand retailer. Our results contribute to the theoretical literature on store brand in four aspects: (a) revealing that the mechanism whereby store brands alleviate double-marginalization problem varies with supply-chain power structures; (h) finding that it is the power manufacturer with a low-loyalty national brand that suffers most from the store brand entry; (c) finding that a category follower retailer is more inclined to introduce its store brand than a power one, and should optimally position its store brand close to the low-loyalty national brand supplied by a power manufacturer; (d) showing that the store brand may lead the manufacturer and the retailer to be trapped in the prisoners' dilemma.
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