Marketing Manufacturer and Retailer House Brands: A Study of Shelf Space in Two Product Categories

Ranga Chimhundu

doi:10.5539/ijms.v4n6p35

Abstract

This article investigates shelf space allocation in the marketing of manufacturer brands (national brands) and retailer house brands (store brands) in the consumer packaged goods sector in a highly concentrated grocery retail environment. Of special interest is the degree to which the market mechanism is still at play in this kind of environment where retail chains wield considerable power over manufacturers supplying the respective grocery retail categories. The study focuses on two consumer packaged goods categories, and data collection is conducted via a combination of in-store category observation and in-depth interviews. The results of in-store category observation data indicate that the shelf space occupied by retailer house brands is largely proportional to the market share of the retailer house brands, which tends to negate the possibility of abuse of power within the product categories studied. Analysis of research interview data unveiled a number of themes that seem to collectively indicate that, both the manufacturer brand and the retailer house brand will continue to have a home in the respective categories, and performance on the part of manufacturer brands is expected for them to be able to justify occupation of valuable shelf space ahead of other competing manufacturer brands in the tightly contested shelf arena. The study points to the importance of participation of both manufacturer and retailer house brands if optimum category performance is to be achieved.

Highlights

The sharing of shelf space between manufacturer brands and retailer house brands is an integral part of the coexistence of these two types of brands in consumer packaged goods categories in all grocery retail industries around the world where retailer house brands are in existence
The results of in-store category observation data indicate that the shelf space occupied by retailer house brands is largely proportional to the market share of the retailer house brands, which tends to negate the possibility of abuse of power within the product categories studied
This research is an intensive study of the subject of shelf space allocation between retailer house brands and manufacturer brands in a grocery retail environment that has a high retail concentration level, and has the objective of eastablishing the extent to which dependency relationships between the two types of brands have a bearing on shelf space decisions

Summary

Introduction

The sharing of shelf space between manufacturer brands (national brands) and retailer house brands (store brands) is an integral part of the coexistence of these two types of brands in consumer packaged goods categories in all grocery retail industries around the world where retailer house brands are in existence. Bell & Duder, 1998; Gomez & Rubio’s, 2008), and this would lead one to believe that there is no standard practice with respect to how shelf space allocation is treated Systemmatic approaches such as category management may exist and may be practised in a number of consumer packaged goods industries, but these may not really tell the whole story, especially in highly concentrated grocery retail environments where retail chains wield considerable power over manufacturers. The article is organised as follows: - firstly, a theoretical background section discusses the literature on dependency and shelf space, and ends up outlining the objectives of the study. This is followed by a description www.ccsenet.org/ijms

Objectives

Methods

Results

Conclusion