Strategic Reactions of National Brand Manufacturers towards Private Labels: An Empirical study in the Netherlands

Abstract

In recent years, the quality of private label products and their market shares have grown to such an extent that most consumer goods manufacturers, brand leaders included, can not afford to ignore them. Private labels are, however, not just another generic competitor. The retailer that sells them is also an important account, and the issue includes the question: to produce private label or not? Several authors have recently suggested a number of effective strategies for leading national brand manufacturers against private labels. However, the empirical evidence for the strategies identified is scarce. Using a sample of 101 Dutch national brand manufacturers, we get a better understanding of the sets of strategies companies use. Using an inductive approach, we find four dominant profiles that are linked to performance and are discussed.