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Shelf space allocation game with private brands: a profit-sharing perspective
Journal of Revenue and Pricing Management Pub Date : 2021-03-18 , DOI: 10.1057/s41272-021-00295-1
Arvind Shroff , Bhavin J. Shah , Hasmukh Gajjar

This work examines the role of a non-price variable, shelf-space in inter-brand competition. The retailer introduces a private brand to control the prices of the national brand, which acts as a monopoly in the absence of any competition from other brands. The private brands compete with national brands for demand, which is a function of the allocated shelf space and the brand price. We propose a game-theoretic model involving a national brand and a private brand who compete horizontally in the supermarkets for shelf space. A comparative study is undertaken through two different cases. In the first case, the retailer promotes the private brand manufactured by itself followed by the second case wherein retailer sells the private brand produced by another manufacturer. The retailer allocates shelf space to both the national as well as private brand simultaneously to capture the competition. The manufacturer of the national brand acts as the stackelberg given its power of setting wholesale prices. The equilibrium of the profit maximization game is expressed in terms of prices, shelf-spaces and profit margin of the players. This work is an attempt to gain insights on the conditions of allocation which are profitable for the manufacturer taking into account the consumer preferences between competing brands. The study also indicates that manufacturer’s profits reduces when they compete for space and make the retailer dominant, when the latter is only involved in shelf space allocation without any in-house production. We contribute as building blocks to understand how shelf-space limitation intensifies the manufacturer-retailer competition and also obtain managerial insight on disproportionate distribution of profits.



中文翻译:

私人品牌的货架空间分配游戏:利益共享的视角

这项工作研究了非价格变量,货架空间在品牌间竞争中的作用。零售商引入了一个私人品牌来控制民族品牌的价格,在没有其他品牌竞争的情况下,该品牌将充当垄断者。私人品牌与国家品牌竞争需求,这取决于分配的货架空间和品牌价格。我们提出了一个博弈论模型,该模型包含一个在超市中横向竞争货架空间的民族品牌和私人品牌。通过两个不同的案例进行了比较研究。在第一种情况下,零售商推广自己制造的自有品牌,然后在第二种情况下,零售商出售另一家制造商生产的自有品牌。零售商同时为国家品牌和私人品牌分配货架空间,以吸引竞争者。鉴于其设定批发价的能力,民族品牌的制造商扮演着Stackelberg的角色。利润最大化博弈的均衡用价格,货架空间和玩家的利润率表示。这项工作是在考虑竞争品牌之间消费者的偏好的情况下,试图获得对制造商有利的分配条件的见解。研究还表明,制造商的利润在竞争空间并让零售商占主导地位时减少,而后者仅涉及货架空间分配而没有任何内部生产。

更新日期:2021-03-19
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