Thirdly, the profitability per square metregenerated by private label brands may not be on a parwith that of manufacturer brands. This may beattributable to the fact that most private label brands arepriced below their manufacturer brand counterparts(Kumar and Steenkamp, 2007). Consumers who areheavy purchasers of private label brands may not proveto be more profitable in the long run (ibid). This could beaccredited to the fact that these consumers may besubstituting a more expensive manufacturer brand withthe less expensive private label option. The authorsargue that this is sometimes considered an outdatedtheory as pricing differentials between private label andmanufacturer brands have been reduced. In the past,private label products tended to be lower priced generics.However, more recently, sophisticated private labelproducts have become available and relative prices haveincreased accordingly. A local example of this is the Pickn Pay Choice brand which, according to Prichard (2005),is usually priced only marginally below mostmanufacturer brands.
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