What can the price gap between branded and private label products tell us about markups (original) (raw)

Price and quality competition between brands and own brands

European Journal of Marketing, 2004

The selling prices to consumers of similar products vary considerably within the same retail outlet and between different types of retail outlet. Applying a value systems framework, the cost structures behind the selling prices of products in five product categories are identified using primary and secondary data. The quality of the competing products is also compared using conjoint analysis of the ratings given by consumers for the edible products and available chemical analysis in the case of detergents. The main explanation for the differences observed in selling prices and cost structures of competing value systems lay not in the interface costs between value chains such as logistics, as expected, nor only in advertising costs, but in the internal costs of individual value system members. In particular, the internal costs of brand manufactures are shown to be the main source of their cost disadvantage against own brands. Only in one product category was there a quality justifica...

Price differentials among brands in retail distribution: product quality and service quality

2011

We develop a theoretical model of retail competition that include two sources of quality, one inherently linked to brand characteristics and the other linked to the retailer level of service. We then measure their contribution in explaining the observed price differentials for a sample of U.K. grocery retailer prices in the south of Coventry during the period November 1995 to