Investigating the impact of Private Labels on National Brand prices in the Italian yogurt market

Using a panel data set on the yogurt market for four hundred points of sale in Italy, we investigate, at the segment level, the interactions between private label (PL) market shares and national brand (NB) leader’s prices. We estimate a reduced form model which controls for the heterogeneity of point of sales and time using a two way fixed effect (FE) error components model (ECM). Consistently with several theoretical findings available in the literature, we expect retailers to use PL to discriminate prices among different groups of consumers. The analysis, however, shows not all segments of the market are influenced by PL shares. Specifically, for the most dynamic segments (functional and yogurt with snack), Pl shares are on average smaller and NB leader’s prices are not affected by their presence. Differently, in the most traditional segments (whole and skimmed yogurt), where PL exhibits on average a sizable presence, the analysis shows a positive effect between PL shares and NB prices. Results suggest leader’s product innovation and product introduction dynamics might play a role on retailer’s power to influence NB leader’s prices, retaining PL development.


Editor(s):
None
Issue Date:
2014
Publication Type:
Conference Paper/ Presentation
Record Identifier:
http://ageconsearch.umn.edu/record/173020
PURL Identifier:
http://purl.umn.edu/173020
Total Pages:
10
JEL Codes:
Q13 D40 L11




 Record created 2017-04-01, last modified 2018-01-22

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