Introduction of Store Brands Considering Product Cost and Shelf Space Opportunity Cost

Joint Authors

Huo, Jiazhen
Mao, Zhixin
Duan, Yongrui

Source

Mathematical Problems in Engineering

Issue

Vol. 2018, Issue 2018 (31 Dec. 2018), pp.1-19, 19 p.

Publisher

Hindawi Publishing Corporation

Publication Date

2018-07-16

Country of Publication

Egypt

No. of Pages

19

Main Subjects

Civil Engineering

Abstract EN

This paper studies the introduction of store brands (SBs) when the product cost, shelf space opportunity cost, and baseline sales are taken into consideration.

We construct a Stackelberg model in which one retailer, acting as the leader, sells a national brand (NB) and its SB and maximizes the category profit by allocating shelf space and determining the prices for the SB and NB products.

Meanwhile, an NB manufacturer, acting as the follower, maximizes its profit based on the decisions of the retailer.

Our results demonstrate that the product cost of the SB (NB) and the shelf space opportunity cost are the dominating factors that determine the optimal pricing strategy.

If the two costs are low, then the optimal pricing strategy is the me-too strategy (competitive strategy); otherwise, the optimal pricing strategy is the differentiation strategy.

There exists a threshold of the product cost, shelf space opportunity cost, and baseline sales to decide the pricing strategy and introduction of SB.

American Psychological Association (APA)

Duan, Yongrui& Mao, Zhixin& Huo, Jiazhen. 2018. Introduction of Store Brands Considering Product Cost and Shelf Space Opportunity Cost. Mathematical Problems in Engineering،Vol. 2018, no. 2018, pp.1-19.
https://search.emarefa.net/detail/BIM-1206152

Modern Language Association (MLA)

Duan, Yongrui…[et al.]. Introduction of Store Brands Considering Product Cost and Shelf Space Opportunity Cost. Mathematical Problems in Engineering No. 2018 (2018), pp.1-19.
https://search.emarefa.net/detail/BIM-1206152

American Medical Association (AMA)

Duan, Yongrui& Mao, Zhixin& Huo, Jiazhen. Introduction of Store Brands Considering Product Cost and Shelf Space Opportunity Cost. Mathematical Problems in Engineering. 2018. Vol. 2018, no. 2018, pp.1-19.
https://search.emarefa.net/detail/BIM-1206152

Data Type

Journal Articles

Language

English

Notes

Includes bibliographical references

Record ID

BIM-1206152