Competition between Private Label and National Brand for Differentiated Food Category: A Canadian Retail Case

• Author / Creator

  Ying, Xiongwei

• Retailers in Canada have introduced private labels to gain vertical bargaining power over manufacturers’ national brands and to establish customer loyalty. Product differentiation in quality and increasingly product formulation is an emerging trend for both private labels and national brands in many grocery categories. This thesis applies a model derived from a random utility nested logit model to estimate structural demand for differentiated canned soup products. Using a Distance-Matrix (DM) approach we identify the location of both private labels and national brands in the ingredient attribute space within the canned soup category. To empirically estimate and test the effects of private label usage on the competitive interactions between retailers and manufacturers, we estimate supply-side Cost-Price Margin (CPM) equations. Our results strongly suggest that retailers’ private label is acting as an effective strategic tool to generate market power over upstream manufacturers.

• Subjects / Keywords

  • Private label
  • National brand
  • Differentiation
  • Canada
  • Distance
  • Retail
  • Food

• Graduation date

  Fall 2013

• Type of Item

  Thesis

• Degree

  Master of Science

• DOI

  https://doi.org/10.7939/R3HH6CF0B

• License

  This thesis is made available by the University of Alberta Libraries with permission of the copyright owner solely for non-commercial purposes. This thesis, or any portion thereof, may not otherwise be copied or reproduced without the written consent of the copyright owner, except to the extent permitted by Canadian copyright law.