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The Impact of Retail Store Brands on Manufacturer Brands: A Generalization of Steiner’s Elasticity Model

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  • Cohen, Michael
  • Cotterill, Ronald

Abstract

Store brands are thought to improve a retailer's position relative to leading brand manufacturers and to reduce retail prices. Steiner (2004) offers a characterization of typical industry structures by considering the relationship between interbrand and intrabrand elasticities. We estimate a model of demand and use elasticity estimates to characterize Boston's fluid milk market as falling into one of Steiner's "typical industry structures". In addition to investigating the relationship between interbrand and intrabrand elasticities we derive and test structural models of supply channel conduct that explicitly identify the pricing conduct that is implicit in Steiner's "typical industry structures". Using scanner data for brand level milk sales milk sales at leading retail chains in Boston we show that store brands do in fact improve the profit position of retailer vis a vis the manufacturer, reduce retail prices, and improve total welfare in the market.

Suggested Citation

  • Cohen, Michael & Cotterill, Ronald, 2008. "The Impact of Retail Store Brands on Manufacturer Brands: A Generalization of Steiner’s Elasticity Model," Research Reports 149933, University of Connecticut, Food Marketing Policy Center.
    • Handle: RePEc:ags:uconnr:149933
    DOI: 10.22004/ag.econ.149933
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    References listed on IDEAS

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    Cited by:

    1. Sylvie Tchumtchoua & Ronald W. Cotterill, 2010. "Optimal Brand and Generic Advertising Policies in a Dynamic Differentiated Product Oligopoly," Food Marketing Policy Center Research Reports 126, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.

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    More about this item

    Keywords

    Marketing;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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