Is Producing a Private Label Counterproductive for a Branded Manufacturer?

Bergès, Fabian and Bouamra-Mechemache, Zohra (2011) Is Producing a Private Label Counterproductive for a Branded Manufacturer? European Review of Agricultural Economics, 39 (2). pp. 213-239.

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Branded food manufacturers vindicate the use of excess production capacities (idle otherwise) to justify their production of retailers’ brands.
We study the distributor and food manufacturer’s private label strategy for production within a framework featuring endogenous store brand quality, bargaining power, possible differences in production technology and potential capacity constraints for the branded manufacturer.
According to the structure of capacity constraint (applying to both products or private label only), the retailer may prefer to choose an independent firm whereas he selected the branded manufacturer when unconstrained. The conclusions of our article thus partially confirm branded manufacturers’ thinking: they may produce store brands when they are not capacity constrained.

Item Type: Article
Language: English
Date: 23 March 2011
Refereed: Yes
Uncontrolled Keywords: production, brand competition, capacity constraint, retailing
JEL codes: L11 - Production, Pricing, and Market Structure; Size Distribution of Firms
L13 - Oligopoly and Other Imperfect Markets
Q13 - Agricultural Markets and Marketing; Cooperatives; Agribusiness
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 09 Jul 2014 17:27
Last Modified: 07 Mar 2018 13:22

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