Private labels and new product development
Journal
Marketing Letters
Journal Volume
20
Journal Issue
3
Pages
227-243
Date Issued
2009
Author(s)
Abstract
This paper provides a positive theory of private labels in new product development when a non-integrated distribution channel is faced with demand uncertainty. We consider a regular marketing environment in which a manufacturer endowed with a branded product seeks to design a new product to resolve its retailer's mis-targeting problem and to optimally screen consumers. Assuming that only linear pricing schemes are available and that the retailer learns the state of demand earlier than the manufacturer does, we show that the presence of a private label always improves channel efficiency. Moreover, a private label is more likely to prevail when the existing branded product is a premium item. © 2009 Springer Science+Business Media, LLC.
SDGs
Type
journal article