Resource title

Why private labels may increase market prices (RV of 2002/105/MKT)

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Empirical research has found that retail prices do not necessarily fall with the introduction of private label brands which today represent some 18% of all retail products sold. In this paper, the authors show that an equilibrium exists whereby national brands engage in heavy advertising and retailers introduce private label brands to better serve their customers. They focus their analysis on a specific type of private label brand, a quality-equivalent private label supplied by the national brand manufacturer. Their analysis suggests that in these conditions, quality-equivalent private label will often lead to higher average prices for consumers and higher profits for retailers and manufacturers.

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en

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application/pdf

Resource resource URL

http://flora.insead.edu/fichiersti_wp/inseadwp2003/2003-77.pdf

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