Collusive conduct in private label markets

Nam Woon Kim, Philip M. Parker

Research output: Journal article publicationJournal articleAcademic researchpeer-review

29 Citations (Scopus)

Abstract

This paper considers retailers' pricing strategies when they sell both nationally-advertised brands and quality-equivalent private-label brands (a form of store, house or own-label branding). We investigate the impact of advertising on the ability of retailers to increase profitability across all brands. Supporting recent theoretical arguments (though contradicting others), our industry study reveals that retailers can react to the heavy advertising amongst national brands by increasing prices, revenues, and economic profits generated from both national brands and private-label brands. For the category studied, retailers' strategies may include setting collusive prices for both national brands and private-label brands. We use a structural test to support this conclusion. Management interviews further support this finding.
Original languageEnglish
Pages (from-to)143-155
Number of pages13
JournalInternational Journal of Research in Marketing
Volume16
Issue number2
Publication statusPublished - 1 Jun 1999
Externally publishedYes

Keywords

  • Advertising
  • Collusion
  • Market power
  • Price
  • Private-label brands
  • Retailing

ASJC Scopus subject areas

  • Marketing

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