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| Author: | Chen, S-F.S. |
| Title: | Transaction cost implication of private branding and empirical evidence |
| Journal: | Strategic Management Journal
2010 : APR, VOL. 31:4, p. 371-389 |
| Index terms: | models transaction costs products retailing industries companies marketing brands |
| Freeterms: | branding |
| Language: | eng |
| Abstract: | This paper explores the transaction cost implication of private (herein as: prv.) branding, which is a practice whereby products supplied by unaffiliated manufacturers are sold under prv. brands owned by retailers. It is argued that prv. branding can preempt a special case of asset specificity called brand specificity, where retailers also invest in the marketing of an outsourced product, with subsequent reputation effects being specific to the manufacturer branding the product. Hence, retailers will not be fully motivated to optimize their investment in product marketing unless taking over the branding right. Based on data from a national chain uncover that the retailer deploys its marketing resources according to the branding status of a product, implying that prv. branding can deflect the transaction cost of solving the brand specificity problem. New theoretical insights into branding and transaction cost analysis are provided. |
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