Beyond private label : the strategic view on distributor own brands

Abstract

During the past two decades something fundamental has happened to the relationship between manufacturers and distributor organisations in many European countries. Within a number of product markets, distributors have launched their own products, forcing manufacturing companies to compete with shelf space owners in addition to the traditional competition with other manufacturers. Theoretical and empirical findings regarding Distributor Own Brands (DOB’S) offer us a number of explanations of the differences between national markets and product categories in terms of DOB penetration. However, much of this literature is deterministic in its approach: DOB penetration is often seen as a direct consequence of different market conditions, rather than as the result of strategy processes involving a number of decision-makers and their perceptions of market-related and organisational factors.This study investigates how an array of organisational and market related factors are perceived by distributor organisations, and how this is expressed in the organisations’ own brand strategies. To investigate this research problem, a theoretical framework that explicitly takes distributor own brand strategy into consideration when examining proposed determinants of DOB penetration is presented. The empirical study is mainly based on interviews with decision-makers within the central organisations of the two largest distributors within Swedish fmcg distribution: the ICA federation and the consumer co-operation KF.

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