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2021 | Book

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Advances in Theory and Practice in Store Brand Operations

Author: Prof. Jiazhen Huo

Publisher: Springer Singapore

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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About this book

This book is developed by focusing on the four issues: (1) product strategy of private brand; (2) pricing strategy of private brand; (3) channel strategy with private brand introduction; and (4) supply chain coordination with private brand introduction. Private brand (PB), also known as private label (PL) or store brand (SB), refers to a brand created and controlled by a retailer. In the 1960s and 1970s, private labels began to emerge in France and England. Although private label has grown rapidly worldwide, market share varies greatly from region to region. According to Nielsen's 2018 Global Private Label Report, the largest markets for private-label products are found primarily in the more mature European retail markets. In recent years, many large domestic retail enterprises have launched their own brand products. With the growth of e-commerce, some online retailers have also launched private-label goods. JD started to introduce its private brands in 2010, with annual sales of its private brand products reaching several hundred million yuan. However, at present, the market share of China's private label is only 1-3%, which still has a big gap compared with Europe and America.The main challenges to China's private label lie in private brand operations management. Among them, how to select the correct product categories, how to make pricing decision, how to restructure channels and how to coordinate supply chain after introducing private brands are four operations management problems need to be solved.

Table of Contents

Frontmatter
Chapter 1. Introduction
Abstract
Store brand (SB), also known as private label (PL) or private brand (PB), refers to a brand created and controlled by a retailer. According to the definition from the Private Label Manufacturers’ Association (PLMA), private brand products include all the products sold under a retailer’s brand name, where the retailer controls part of or all the process from design to the sale of products. Although usually produced by third party manufacturers, private brand products are designed by the retailers and sold in their own stores. Private brands stand in contrast to supplier or manufacturer brands, which are also known as national brands (NB). In the main however, for simplicity and consistency we will now prefer the term “store brand” and “store label” over the other “private brand or label” terminology.
Jiazhen Huo
Chapter 2. Product Strategy for Store Branding
Abstract
Manufacturers of store brand products fall into four general classifications: they are (a) large national brand manufacturers that utilize their expertise and excess plant capacity to supply store brands; they are (b) small, quality manufacturers that specialize in particular product lines and concentrate on producing store brands almost exclusively (often such companies are owned by corporations that also produce national brands); they are (c) major retailers and wholesalers that own their own manufacturing facilities and provide store brand products for themselves; and they are also (d) regional brand manufacturers that produce store brand products for specific markets.
Jiazhen Huo
Chapter 3. Pricing Strategy for Store Brands
Abstract
In recent years, store branding has become an important strategic tool for retail stores to enhance their status and brand influence. In particular, the production and purchase cost of store brands is often lower, and the circulation process of commodities has become less. The gross profit rate is often higher than that of the national brands.
Jiazhen Huo
Chapter 4. Channel Strategy and Conflict Resolution
Abstract
The introduction of a retailers’ store brand is sure to bring channel competition to the relationship between manufacturers and retailers because of channel encroachment. The reality is that it is easy for store brand products to compete with the national brand products of manufacturers, which may be problematic for the manufacturers. Most of the profit from store brand products accrue to the retailer, manufacturers cannot afford for their products to lose significant market share to the competition. Thus, even if national brand manufacturers become co-producers of store brand products, they still need to find a reasonable channel coordination method to mitigate channel conflicts caused by the introduction of store brands and achieve win-win outcomes. In this chapter, we discuss aspects of channel competition between traditional manufacturers and retailers, followed by aspects of channel competition that further consider store brand issues. We consider the relevant in the appropriate sections following.
Jiazhen Huo
Chapter 5. Supply Chain Coordination
Abstract
The introduction of store brands by retailers has created a new fierce competition for manufacturers, but it is not uncoordinated. Through a specific coordination mechanism, the supply chain benefits can be maximized, and a win-win situation can be achieved. In terms of research methods, scholars generally adopt standardized mathematical models and use game theory to study the impact of store brand involvement on each member of the supply chain’s pricing and profit and propose a feasible coordination mechanism. In reviewing the research for this book, we conclude that supply chain coordination for store brands is principally divided into the following three categories: theoretical analysis based on game theory; coordination mechanisms, and competition and cooperation between retailer and manufacturer.
Jiazhen Huo
Metadata
Title
Advances in Theory and Practice in Store Brand Operations
Author
Prof. Jiazhen Huo
Copyright Year
2021
Publisher
Springer Singapore
Electronic ISBN
978-981-15-9877-7
Print ISBN
978-981-15-9876-0
DOI
https://doi.org/10.1007/978-981-15-9877-7