Quality and Private Label Encroachment Strategy
研究零售商在已有全国性品牌时，如何根据成本与质量权衡选择引入低质量或高质量自有品牌，发现高质量自有品牌在特定条件下能提升零售商利润、渠道总利润和消费者福利。
We consider a supply chain consisting of an incumbent national brand manufacturer and a retailer, who wishes to determine the private label encroachment strategy. By investigating the cost–quality trade‐off between lower‐ and higher‐quality private labels, we characterize the retailer's optimal encroachment decisions. Intuitively, the retailer would choose to introduce a lower‐quality private label when the quality of the national brand is high. However, we find that a higher‐quality private label may better benefit the retailer under certain conditions. Moreover, we establish that introducing a higher‐quality private label can improve both channel profit and consumer welfare. Using the results we derive, we explain the market practices and provide useful guidelines for retailers’ private label encroachment decisions.