View article

The purpose of this paper is to examine the question, “should national brand manufacturers produce private labels?”. Anecdotal evidence shows that though this is a common question for managers in different industries and countries, managers and companies react differently to it. As such, there are national brand manufacturers that produce private labels and others whose policy is to produce only branded products.

This paper examines this question through the construction of a model, focusing especially on the effects of producing private labels on manufacturers' profits when their provision may affect both the consumers' perception of the quality of the private label and the national brand manufacturer's costs.

The analysis allows for different degrees of competition in the retail market, and for linear and non‐linear pricing.

An important …