Assessing the impact of manufacturer power on private label market share in an equilibrium framework

Simbarashe Pasirayi, Timothy J. Richards

Research output: Contribution to journalArticlepeer-review

Abstract

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.

Original languageEnglish (US)
Article number113302
JournalJournal of Business Research
Volume154
DOIs
StatePublished - Jan 2023

Keywords

  • Bargaining power
  • Emerging markets
  • Private label market share
  • Retail margins
  • Wholesale margins

ASJC Scopus subject areas

  • Marketing

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