Win-Win Strategies at Discount Stores by ja8233


									Win-Win Strategies at Discount Stores
Competence Area:
Retailing and e-commerce

Author(s) / Journal:
Deleersnyder, Barbara, Marnik G. Dekimpe, Jan-Benedict E.M. Steenkamp and Oliver Koll
Journal of Retailing and Consumer Services, 14, 309-318 (2007)

Managerial Abstract:
An important development in the grocery market is the considerable expansion of the discount
format which successfully captures market share from ‘mainstream’ retailers. Discounters
predominantly sell own, private-label (PL) brands and impede national-brand (NB) manufacturers
to benefit from their growth potential. To fight PLs, manufacturers of national brands (NB) feel
increasingly compelled to develop better trade relations with discounters. This is also an
opportunity for discounters that increasingly feel pressured to differentiate themselves not only via
price but for instance by extending their assortment with attractive NBs. This study determines
what factors drive NB success at discount stores, and lead to a win-win situation for both the
manufacturer and the discounter. For that purpose, the market-share evolution of over 400
branded goods sold through six discount stores in three major European countries is investigated.

The study shows that both channel members benefit from:
       a large price difference between the NB and the discounter’s PL variant
       a larger price gap for the NB between mainstream retailers and the discounter
       attractive outer-case boxes for NBs that allow a differentiated presentation of NBs in
       discount stores
       listing innovative NBs
       considering less popular but perhaps more targeted branded goods that may cause less
       cannibalization from the brands’ traditional outlets

Key takeaway:
Under certain conditions outlined above, collaboration between discounters and national-brand
manufacturers can improve both parties’ performance.

More info how to benefit from these learning’s into R&D / your organization:
Send email to: Europanel / AiMark team, dr. Koll (

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