Store-brand introduction and production arrangement in the presence of multiple retailers

2020 ◽  
Vol 54 (3) ◽  
pp. 827-843 ◽  
Author(s):  
Rong Cheng ◽  
Weimin Ma ◽  
Hua Ke
Keyword(s):  
Game Theory ◽  
Real World ◽  
Stackelberg Games ◽  
Store Brand ◽  
Store Brands ◽  
National Brand ◽  
Model Interaction ◽  
National Brands ◽  
The Real ◽  
Retailing Business

Store brands play an increasingly important role in retailing business, leading more and more retailers to introduce store brands. Abundant research focuses on competition between store brands and national brands and counterstrategies that national-brand manufacturers can take to counter store-brand introduction. A little research studies the store-brand production issue, however, all under single-retailer scenarios. To approach the real world, we employ game theory to model interaction between a national-brand manufacturer and multiple locally monopolist retailers, one of whom has capability and motivation to introduce a store brand. Five Stackelberg games are build and solved to investigate: how the presence of the non-store-brand retailers affects the store-brand retailer’s decision on and profitability in the store-brand introduction; how the store-brand retailer should arrange store-brand production; whether there is a win–win situation where both the store-brand retailer and the national-brand manufacturerare better off with the latter producing the store brand. Accordingly, our study offers a novel rationale for why so many, especially leading, national-brand manufacturers are involved in the store-brand production. Some useful managerial suggestions are proposed on the store-brand introduction and production arrangement.

scholarly journals Store-Brand Production Arrangement Based on the Game Theory

2018 ◽  
Vol 2018 ◽  
pp. 1-10
Author(s):  
Weimin Ma ◽  
Rong Cheng ◽  
Hua Ke ◽  
Jianguang Zhang
Keyword(s):  
Game Theory ◽  
Production Efficiency ◽  
High Efficiency ◽  
Strategic Interaction ◽  
Store Brand ◽  
Store Brands ◽  
National Brand ◽  
National Brands ◽  
The Game Theory

The increasing popularity of store brands is resulting in greater cannibalization of national brands. Thus, national-brand manufacturers are trying their best to confront this trend. At the same time, however, many leading national-brand manufacturers have become involved in the store-brand production of their counterpart retailers. We construct a game-theory-based framework to model the strategic interaction between a leading national-brand manufacturer and a retailer. Besides the national brand, the retailer also has an option for its own store brand to compete with the national brand head to head. There are two choices for the store-brand production available to the retailer: a fringe manufacturer with low production efficiency or alternatively the national-brand manufacturer with high efficiency. It is shown that, under certain conditions, there is a win-win situation for both the store-brand retailer and the national-brand manufacturer with the latter supplying the store brand. More interestingly, it is found that the national-brand manufacturer supplying the store brand may lead to a higher likelihood of the store brand introduction. Our study offers an explanation for why more and more national-brand manufacturers supply store brands.

scholarly journals Testing the decoy effect in the presence of store brands

2015 ◽  
Vol 43 (2) ◽  
pp. 113-125 ◽  
Author(s):  
Ricardo Sellers-Rubio ◽  
Juan-Luis Nicolau-Gonzalbez
Keyword(s):  
Sales Promotion ◽  
Brand Names ◽  
Store Brand ◽  
Store Brands ◽  
National Brand ◽  
Content Type ◽  
National Brands ◽  
Decoy Effect ◽  
Relative Preference ◽  
Rule Out

Purpose – The purpose of this paper is to test decoy effect in the framework of sales promotion, by conducting several experiments to figure out how this decoy effect is influenced by the presence or absence of a store brand. Design/methodology/approach – Several experiments have been conducted to test the validity of the decoy effect and rule out some explanations for the changes in demand that take place. The experiments consider three brands (two national brands and one store brand). All the brand names and prices employed in the experiment are real. Findings – The results indicate that, as expected, the inclusion of a decoy in the choice set significantly increases the consumer’s relative preference for the promoted product; however, more importantly, the results also show that store brand consumers are more influenced by a decoy than national brand consumers. Originality/value – This paper presents the first evidence of the decoy effect in the presence of store brands.

Coalitions and Government Formation: An Empirically Relevant Theory

1978 ◽  
Vol 8 (4) ◽  
pp. 459-477 ◽  
Author(s):  
Ian Budge ◽  
Valentine Herman
Keyword(s):  
Game Theory ◽  
Real World ◽  
Coalition Formation ◽  
Government Formation ◽  
The Real ◽  
Relevant Theory ◽  
The Government ◽  
Number Of Parties ◽  
Government Coalition

Traditional theories of government coalition formation concentrate on formal criteria inspired by – if not directly drawn from – game theory. One such criterion is that the coalition which forms must be winning; another is that it should have no surplus members without whom it would still be winning, i.e. it should be minimal; and a third is that the number of parties should be as few as possible. The closest that such theories come to considering the substantive issues affecting the formation of coalitions in the real world is their focus on reducing the ideological diversity of parties within the government. On many occasions, however, such ideological considerations receive negligible attention from politicians, who often ignore size factors altogether.

scholarly journals National Versus Private-Label Brands: Dynamics, Conceptual Framework, And Empirical Perspective

2015 ◽  
Vol 13 (2) ◽  
pp. 123 ◽  
Author(s):  
Elias G. Rizkallah ◽  
Heather Miller
Keyword(s):  
Conceptual Framework ◽  
Consumer Products ◽  
Private Label ◽  
Store Brands ◽  
National Brand ◽  
National Brands ◽  
Product Categories ◽  
Private Label Brands ◽  
Empirical Perspective

Motivated by profits and their growing power in the marketplace, retailers have been expanding their private-label brands to include more categories of consumer products and differentiation on quality to reach different consumer segments. This global phenomenon is adversely impacting the performance of national brands, thus creating a conflict between two powerful parties manufacturers of national brands and their large retailers who are supposed to be their helping hands in the marketplace. In this paper, the authors develop a conceptual framework, which captures the complexity and multidimensionality of the situation the stakeholders involved, the interest and power of each, the relationships among them, various strategies they employ, and the outcomes of the conflict. Several hypotheses were examined and tested through the empirical part of this study; for example, would the powers of these parties determine who is the loser and who is the winner or will the verdict be in the hands of the consumers? The study surveyed 281 consumers to assess their attitudes toward and preferences of store brands versus national brands across product categories and the underlying motivations. The paper concludes with recommendations for retailers and national brand manufacturers to win the hearts of consumers rather than exhaust their resources in the conflict.

scholarly journals Sustainable Decision Making for Store Brand Product

2018 ◽  
Vol 10 (11) ◽  
pp. 3944 ◽  
Author(s):  
Ji-Hung Choi ◽  
Taewan Kim ◽  
Sang-Uk Jung
Keyword(s):  
Production Cost ◽  
Production Costs ◽  
Channel Coordination ◽  
Store Brand ◽  
Store Brands ◽  
National Brand ◽  
Coordination Problem ◽  
Private Brands ◽  
Brand Product

We investigate a multi-brands sustainable channel coordination problem where a national brand manufacturer sells a product through two local retailers competing against their own store brand product, respectively. We shows how the retailers strategically optimize the price and quality of private brands given the customer tastes and the production costs of the store brands in order to make their store brands sustainable. We identify two underlying strategic forces; a competitive force, and a quality force. First, we find that retailers have an incentive to position their store brand far away from the national brand in order to maximize monopolistic power. This strategic force attenuate the incentives for customer to switch to other retailer’s store brands. One the other hand, we show that the retailers prefer increasing the store brand’s quality to get more profit margin when the production cost is relatively high as well.

Influence of perceived risk on store brand proneness

2006 ◽  
Vol 34 (10) ◽  
pp. 761-772 ◽  
Author(s):  
Celina González Mieres ◽  
Ana María Díaz Martín ◽  
Juan Antonio Trespalacios Gutiérrez
Keyword(s):  
Perceived Risk ◽  
Purchase Intention ◽  
Risk Difference ◽  
The Other ◽  
Store Brand ◽  
Store Brands ◽  
Content Type ◽  
National Brands ◽  
Other Hand ◽  
Mediterranean Countries

PurposeThe purpose of the present study is to test that perceived risk is a multidimensional concept both when it is associated to the purchase of store brands and national brands and analyzes the effect of perceived risk on store brands proneness.Design/methodology/approachIn order to achieve its objective the paper used a confirmatory factor analysis to validate the proposed perceived risk scale and three regression analysis were carried out to evaluate the effect of perceived risk on store brands proneness.FindingsThe results of the study show significant differences between store and national brands and, on the other hand, it has been confirmed that these differences contribute to decrease store brand proneness, the latter being measured through three variables: actual store brands purchase, consumption intensity and future purchase intention.Originality/valuePrevious empirical research has focused primarily on the perceived risk associated with store brands individually. On the contrary, this paper considers the perceived risk difference between store and national brands, believing that the difference between brands is what will really make the consumer choose a store brand or a national brand. On the other hand, the present study will permit the evaluation of the effects of the evolution of store brands in Spain, effects that can be replicated in other Mediterranean countries.

scholarly journals National Brands, Private Labels, and Food Price Inflation

2014 ◽  
Vol 46 (4) ◽  
pp. 575-591
Author(s):  
Rickard James Volpe
Keyword(s):  
Low Income ◽  
Food Prices ◽  
Food Price ◽  
Private Label ◽  
Store Brand ◽  
Private Labels ◽  
National Brand ◽  
Price Inflation ◽  
National Brands ◽  
Fuel Prices

This article investigates the extent to which national brand and private label (store brand) prices behave differently as food price inflation changes. Empirical tests using a range of indices support the hypotheses that rising commodity and fuel prices lead to relatively larger surges in private label prices. When food prices are rising or high, the average price difference between national brands and private labels shrinks. The findings have implications for understanding the welfare effects of private labels. Moreover, they suggest that food price inflation is stronger for low-income households as food prices rise.

Counterfactuals and Case Studies

2009 ◽  
Author(s):  
Jack S. Levy
Keyword(s):  
Game Theory ◽  
Case Studies ◽  
Real World ◽  
Explicit Description ◽  
Causal Effects ◽  
The Real

This article shows that counterfactuals can be used along with case studies to make inferences, although strong theories are needed for this. The article also argues that game theory is one approach that provides this kind of theory because a game explicitly models all of the actors' options including those possibilities that are not chosen. The article then indicates that any counterfactual argument requires a detailed and explicit description of the alternative antecedent which is plausible and involves a minimal rewrite of history, and suggests that one of the strengths of game theory is its explicitness about alternatives. The validity of counterfactual arguments is assessed in explaining cases or testing theoretical propositions. Counterfactuals should change as few aspects of the real world as possible in order to isolate their causal effects.

scholarly journals An Emergency Decision Making Method for Different Situation Response Based on Game Theory and Prospect Theory

Symmetry ◽  
2018 ◽  
Vol 10 (10) ◽  
pp. 476 ◽  
Author(s):  
Zi-Xin Zhang ◽  
Liang Wang ◽  
Ying-Ming Wang
Keyword(s):  
Game Theory ◽  
Decision Making ◽  
Prospect Theory ◽  
Real World ◽  
The Real ◽  
Psychological Behavior ◽  
Emergency Decision Making ◽  
Decision Environment ◽  
Emergency Decision ◽  
Decision Choice

Because of the continuous burst of emergency events (EEs) recently, emergency decision making (EDM) has become an active research topic due to its crucial role in relieving and reducing various losses and damages (property, lives, environment, etc.) caused by EEs. Current EDM studies based on prospect theory (PT) have considered decision maker’s (DM’s) psychological behavior, which is very important in the EDM process because it affects DM’s decision behavior directly, particularly under the uncertainty decision environment. However, those studies neglected an important fact that different emergency situations should be handled by different measures to show the pertinence and effectiveness of the emergency response in the real world, which has been taken into consideration in EDM studies based on game theory (GT). Different behavior experiments show that DMs usually have limited rationality when involved in risk and an uncertain decision environment, in which their psychological behavior has distinct impacts on their decision choice and behavior. Nevertheless, the existing studies of EDM based on GT build on an assumption that DMs are totally rational; however, it is obvious that such an assumption is unreasonable and far from the real-world situation. Motivated by these limitations pointed out previously, this study proposes a novel EDM method combining GT and PT that considers not only the DM’s psychological behavior, but also takes different situations’ handling for EEs into account, which is closer to the EDM problems in reality. An example and comparison with other methods are provided to demonstrate the validity and rationality of the proposed method for coping with real-world EDM problems.

The interplay of products from the same product line: the role of brand reputation

2014 ◽  
Vol 48 (9/10) ◽  
pp. 1648-1663 ◽  
Author(s):  
Mauricio Palmeira
Keyword(s):  
Positive Impact ◽  
Future Research ◽  
Store Brand ◽  
Store Brands ◽  
National Brand ◽  
Content Type ◽  
Brand Reputation ◽  
A Value ◽  
The Impact

Purpose – The main aim of this paper is to examine the role of brand reputation on the impact of value product on perceptions of a premium product from the same brand. As a secondary goal, it tests and extends existing findings from judgment tasks to a choice task. Design/methodology/approach – Two online experiments are presented. In Study 1 (1a and 1b), participants provided quality and price judgments to products. Brand reputation was manipulated by comparing common store brands to non-store brands (Study 1a) and to upscale store brands (Study 1b). In Study 2, we examined whether findings indicating a positive effect of a value store brand on a premium store brand extends to a choice context. Participants made choices between a premium store brand and a national brand in the presence of either a value store brand or a value national brand. Findings – It was found that brand reputation plays an important role in the interplay of products in line extensions. While the positive impact of a value brand on a premium brand is at its strongest level for a regular store brand, it still has a moderate size for a non-store brand without a defined reputation, as well as for an upscale store brand. Second, using a choice task, we reject an important rival explanation for the impact of a value store brand on a premium store brand observed in previous research. Research limitations/implications – The authors have focused on consumers’ expectations of products. While research has shown that these expectations play an important role in evaluations, future research may directly examine perceptions after consumption. The findings also offer an opportunity for future research to examine the differences in perceptions between store and non-store brands at different positioning levels, as well as other factors that affect brand reputation. Practical implications – The findings have two practical implications. First, our results indicate that when a manufacturer produces two products in the same category at different levels of quality, there is some benefit in letting consumers know about this relationship. The authors consistently found no negative impact on the brands and often a positive impact on the premium brand. While effects are stronger for common store brands, they are likely to emerge for any type of brand, albeit weaker. Originality/value – This paper contributes to the nascent literature on multi-tier brands and vertical extensions in several ways. First, the role of brand reputation was examined and how it interacts with positioning in line extension context. Second, we show that the effect of a value brand on a premium brand is stronger for store brands, but still existent for non-store brands. These results offer implications for practice and open opportunities for future research on multi-tier store brands.

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