Journal of Marketing Management
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Competitive advantage, private-label brands, and category profitability Michael S. Pepe , Russell Abratt & Paul Dion
a b a b c
Siena College, New York, USA
Nova Southeastern University, Florida, USA and Wits Business School, University of the Witwatersrand, South Africa c
Susquehanna University, Pennsylvania, USA Version of record first published: 16 Aug 2011.
To cite this article: Michael S. Pepe , Russell Abratt & Paul Dion (2012): Competitive advantage, private-label brands, and category profitability, Journal of Marketing Management, 28:1-2, 154-172 To link to this article: http://dx.doi.org/10.1080/0267257X.2010.498145
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Journal of Marketing Management Vol. 28, Nos. 1–2, February 2012, 154–172
Competitive advantage, private-label brands, and category profitability Michael S. Pepe, Siena College, New York, USA Russell Abratt, Nova Southeastern University, Florida, USA and Wits Business School, University of the Witwatersrand, South Africa Paul Dion, Susquehanna University, Pennsylvania, USA Abstract The purpose of this study was to investigate the influence of private-label resources possessed by a supermarket retailer. Our study examines whether or not private-label products can help in the overall enhancement of product category performance. We examine the performance of a supermarket retailer in the Northeast United States that operates over 100 stores and generates a total yearly sales volume in excess of $3 billion. Data of this nature is difficult to obtain for research purposes, and this proved to be very valuable. Data obtained from the internal financial database of the supermarket was used and generated from point-of-sale information. We then developed a research model from the literature review and used structural equation modelling to analyse the data. The findings of this study indicate that a change in category private-label sales penetration and category market share had little impact on category profitability. The major implication for retailers is the necessity for category managers to focus on all brands within their respective categories and not over-emphasise a privatelabel brand focus. Keywords national brands; private-label brands; category management; resource-based view
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Research has been conducted on how private-label brands provide advantage to retailers who buy private-label products, and the category and market determinants of private-label share (Ailawadi & Keller, 2004). However, in an article summarising retailing research in the Journal of Retailing, Grewal and Levy (2007) called for additional work on private labels and their impact on retail...