Three Essays On The Competition Between National Brand And Private Label Food Products PDF Download

The overall purpose of this dissertation is to identify the demand of fast moving consumer goods (FMCG) and to analyze the issues of brand level competition in FMCG markets product categories at the Canadian retail level. The analysis develops and applies industrial organization and price analysis methods using proprietary scanner data for the Canadian market. The first essay deals with the monetary valuation of brands, convenience and other quality attributes in FMCG product categories in grocery retailing in Canada by using scanner data. The method extends the hedonic model by using the least squares dummy variable approach. The analysis contributes the literature by establishing the relationship between attributes (brands, quality and convenience) and price using two examples of FMCG products at the Canadian retail level. The results show that branding, quality and convenience attributes have a significant influence on the price of FMCG product categories. The study concludes that dominant brands charge a premium price relative to other competing brands in the market. The second essay examines the type of competition between the private label (PL) and national brand (NB) under various retailer-manufacturer production arrangements for PLs. The empirical implementation based on proprietary store-level scanner data expands the Non-Nested Model Comparison (NNMC) approach. The theoretical model reveals that different production arrangements of the retailer's brand have an impact on the wholesale price of the PL and NB. The empirical model results for the selected product categories indicate no consistent pattern of competition between the PL and NB. The strategic games played vary with different FMCG product categories and for different production practices of the PL brand. The third essay focuses on the competitive relationship between the NB and PL in varying socioeconomic environments. The analysis extends the PL-NB competition model by explicitly incorporating socioeconomic characteristics (income) for individual retail store locations. For empirical purposes, retail scanner information is segmented by considering the store location spread. Results show that the elasticity of PL and NB varies for quality differentiated products and with consumers' varying socioeconomic environments.