Affiliations: School of Economics and Management, Tongji University, Shanghai, China
Correspondence:
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Corresponding author. Rong Cheng, School of Economics and Management, Tongji University, Shanghai 200092, China. Tel.: +86 13667737255; E-mail: 2014echocheng@tongji.edu.cn.
Abstract: Store brands are of great importance for the retailing industry in profitability. Abundant research is thus attracted to investigate the impacts of store brands on supply chains. However, the research is all conducted in the settings with certain information or historical data. As a matter of fact, for a retailer, initiating a store brand is just like the first time people eat a crab. Specifically, the related market information (the price competing intensity between store brands and national brands and the market base for store brands) is usually uncertain for retailers. Consequently, experienced experts are often invited to make estimation when marketing managers make decisions on pricing store brands. To deal with the estimated uncertain information, uncertainty theory is employed to build three uncertain programming models under three channel power structures. Accordingly, we provide pricing decisions and corresponding equilibrium results, and thus shed light on how store-brand introduction affects all the supply chain players and the whole channel differently under different power structures. It is found that the more powerful the national-brand manufacturers are, the more inclined they will suffer from the store-brand introduction; on the contrast, retailers with different power positions always benefit from the store-brand introduction and may behave differently when pricing the national brand markups after the store-brand introduction.
Keywords: Private label, uncertain programming, pricing decision, game theory, power structure
