Quality positioning strategy is the determinant of store brands success. Under the condition of cost difference between store brands and national brands, we consider the introduction strategies and channel effects of the store brands whose quality positioning strategies are different. The results are showed as follow:(i) When the wholesale price of the low-quality national brand is high enough, the retailer can introduce the economic store brand. When the wholesale price of the high-quality national brand is high enough, the retailer can introduce the premium store brand. (ii) No matter which kind of store brand the retailer introduces, the wholesale price and retailing price of the national brands will decrease, but their decreased degrees decrease with the store brand cost advantage of decreasing. When the economic store brand is introduced, the decreased degrees of the wholesale price and retailing price of the national brands increase with the the store brand quality increasing. When the premium store brand is introduced, the decreased degrees of the wholesale price and retailing price of the national brands decrease with the store brand quality increasing. (iii) No matter which kind of store brand the retailer introduces, the profits of the national brands will decrease, and their decreased degrees decrease with the store brand cost advantage decreasing. (iv) No matter which kind of store brand the retailer introduces, the retailer's profits will increase. When the economic or premium store brand is introduced, the increased degrees of retailer's profits increase, with the store brand cost advantage decreasing or the store brand quality increasing. In these three kinds of store brands being discussed, the premium store brand could most significantly enhance the retailer's profits. More importantly, the introduction of any kind of store brand could improve the profits of the entire supply chain.
Key words
store brands /
quality positioning /
relative cost advantage /
channel effects
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Footnotes
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Funding
National Natural Science Foundation of China (71372187, 71772115)
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