Working Paper: CEPR ID: DP10877
Authors: Rachel Griffith; Michal Krol; Kate Smith
Abstract: Store brands are products over which a retailer (rather than a manufacturer) takes certain strategic decisions; we study the incentives of a retailer to advertise its store brands. We use detailed data on the British grocery market to document the considerable variation in store brand penetration across product categories and retailers. We develop a model that relates the pricing and advertising decisions of retailers and manufacturers to primitive characteristics of the category, and in particular the way that advertising affects consumer demand. We present empirical evidence that is consistent with several predictions from the model.
Keywords: Advertising; Store Brands
JEL Codes: D21; D22; M37
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Advertising by national brands (M37) | Store brand penetration (M37) |
| Retailer size (L81) | Store brand penetration (M37) |
| Perceived quality of store brands (v1) relative to national brands (v2) (L15) | Advertising efforts for store brands (M37) |
| Advertising efforts for store brands (M37) | Store brand penetration (M37) |