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Title: Fighting store brands through the strategic timing of pricing and advertising decisions
Authors: Karray, Salma
Martín-Herrán, Guiomar
Issue Date: 2019
Description: Producción Científica
Citation: European Journal of Operational Research, 275, 635-647, 2019
Abstract: This paper investigates whether manufacturers can use the timing (sequence) of their pricing and ad- vertising decisions to benefit from or to deter store brand (SB) introductions. We develop and solve six sequential game-theoretic models for a bilateral channel where different timing of these decisions are considered before and after the retailer introduces a store brand. Comparisons of equilibrium solutions across games show that the sequence of pricing and advertising decisions in the channel significantly im- pacts the profitability of a store brand entry by the retailer. Such impact depends on: (1) whether each channel member decides on pricing and advertising simultaneously or sequentially prior to the SB entry, (2) whether the timing chosen for these decisions changes following the SB introduction , and (3) the intensity of competition between the store and national brands (NB). In particular, the SB entry leads to losses for the manufacturer when the sequence of advertising and pricing decisions is kept unchanged after the SB entry even when it is much differentiated from the NB. These results offer new perspectives on the effects of store brand entry in distribution channels, and suggest that for low levels of competition intensity between the NB and the SB, the manufacturer can either prevent or benefit from the retailer’s brand given an adjustment in the sequence of the manufacturer’s decisions.
Peer Review: SI
Sponsor: MEC under projects ECO2014-52343-P and ECO2017-82227-P, co- financed by FEDER funds
Junta de Castilla y León under projects VA024P17 and VA105G18 co-financed by FEDER funds
Language: eng
Rights: info:eu-repo/semantics/embargoedAccess
Appears in Collections:DEP20 - Artículos de revista

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