TY - JOUR
T1 - Assessing the impact of manufacturer power on private label market share in an equilibrium framework
AU - Pasirayi, Simbarashe
AU - Richards, Timothy J.
N1 - Publisher Copyright:
© 2022 Elsevier Inc.
PY - 2023/1
Y1 - 2023/1
N2 - In emerging markets, private label growth has not kept pace with the growth in private labels elsewhere. In Europe and North America, private labels now constitute an average of 35% of total retail market share, but market shares vary between 1% and 8 % in emerging markets. Existing explanations for this observation do not account for the unique nature of manufacturer-retail relationships in emerging economies. That is, in most emerging economies, national brand manufacturers tend to be the sole producers of private labels. We investigate whether national brand manufacturers possess bargaining power relative to retail buyers and, if so, we examine how this may affect private label market shares. The results show that dominant manufacturers set relatively high wholesale prices for private labels, which in turn leads to higher-priced private label products, and low private label market shares.
AB - In emerging markets, private label growth has not kept pace with the growth in private labels elsewhere. In Europe and North America, private labels now constitute an average of 35% of total retail market share, but market shares vary between 1% and 8 % in emerging markets. Existing explanations for this observation do not account for the unique nature of manufacturer-retail relationships in emerging economies. That is, in most emerging economies, national brand manufacturers tend to be the sole producers of private labels. We investigate whether national brand manufacturers possess bargaining power relative to retail buyers and, if so, we examine how this may affect private label market shares. The results show that dominant manufacturers set relatively high wholesale prices for private labels, which in turn leads to higher-priced private label products, and low private label market shares.
KW - Bargaining power
KW - Emerging markets
KW - Private label market share
KW - Retail margins
KW - Wholesale margins
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U2 - 10.1016/j.jbusres.2022.113302
DO - 10.1016/j.jbusres.2022.113302
M3 - Article
AN - SCOPUS:85137777775
SN - 0148-2963
VL - 154
JO - Journal of Business Research
JF - Journal of Business Research
M1 - 113302
ER -