Abstract
As manufacturers face a decreasing channel power, radical innovation in Consumer Packaged Goods represents for them both a risky activity and a necessity. At the same time, retailers keep investing in developing Private Label products. This paper aims to understand the role played by manufacturers and retailers in radical innovations in the CPG industry. Two datasets by Kantar Worldpanel are analysed, including all radical innovations launched in Spain between 2012 and 2016 across the 31 most innovative categories. Results indicate that Manufacturer Brands play a leading role in radical innovation, despite the difficulties they face in achieving distribution and the challenge of Private Label “me-toos”. Furthermore, in most categories with a high number of innovations the growth of PL market share slows down. The paper suggests that manufacturers need to keep innovating in order to hinder the development of private labels and to preserve their position in the channel.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Ailawadi, K.L., Pauwels, K.H., Steenkamp, J.-B.E.B.M.: The reciprocal relationship between private label use and store loyalty. SSRN Electron. J. (2007)
Anselmsson, J., Johansson, U.: Retailer brands and the impact on innovativeness in the grocery market. J. Mark. Manage. 25(1–2), 75–95 (2009)
Beckeman, M., Bourlakis, M., Olsson, A.: The role of manufacturers in food innovations in Sweden. Br. Food J. 115(7), 953–974 (2013)
Boyle, P.J., Scott Lathrop, E.: The value of private label brands to U.S. consumers: an objective and subjective assessment. J. Retail. Consum. Serv. 20(1), 80–86 (2013)
Braak, A., Deleersnyder, B.: Innovation cloning: the introduction and performance of private label innovation copycats. J. Retail. 94(3), 312–327 (2018)
Chandy, R.K., Tellis, G.J.: The incumbent’s curse. J. Mark. 1–17 (2000)
Costa, A.I.A., Jongen, W.M.F.: New insights into consumer-led food product development. Trends Food Sci. Technol. 17(8), 457–465 (2006)
Cuneo, A., Lopez, P., Yagüe, M.J.: Measuring private labels brand equity: a consumer perspective. Eur. J. Mark. 46(7), 952–964 (2012)
Cuneo, A., Milberg, S.J., del Carmen Alarcon-del-Amo, M., Lopez-Belbeze, P.: Private label and manufacturer brand choice in a new competitive reality: strategic directions and the future of brands. Eur. Manage. J. 37(1), 117–128 (2019)
Dawes, J., Nenycz-Thiel, M.: Analyzing the intensity of private label competition across retailers. J. Bus. Res. 66(1), 60–66 (2013)
Dobson, P., Chakraborty, R.: Assessing brand and private label competition. Eur. Competition Law Rev. 36(2), 76–81 (2015)
Garcia, R.: A critical look at technological innovation typology and innovativeness terminology: a literature review. J. Prod. Innov. Manage 19(2), 110–132 (2002)
Gielens, K., Steenkamp, J.B.E.M.: Drivers of consumer acceptance of new packaged goods: an investigation across products and countries. Int. J. Res. Mark. 24(2), 97–111 (2007)
Glimvall, S.: How Do Private Labels Affect Innovation in the Food Industry? (2015). http://stud.epsilon.slu.se
IRI. Private Label in Western Economies Losing Share IRI Special Report (2016). https://www.iriworldwide.com
IRI. Private Label Outperforms FMCG Brands in Europe, as Retailers up Product Quality in a Bid to Drive Differentiation and Loyalty – New IRI Report Reveals - IRI (2018a)
IRI. Top Categories Performance Overview In Key European Markets Iri Special Report (2018b). https://www.iriworldwide.com
Kantar. Radar de La Innovación 2017 (2017). https://www.kantarworldpanel.com
Kantar. Radar de La Innovación 2018 (2018). https://www.kantarworldpanel.com
Kumar, N., Steenkamp, Jan-Benedict E.M.: Brand versus brand. Int. Commer. Rev. 7(1), 46–53 (2007)
Lamey, L., Deleersnyder, B., Steenkamp, J.-B.E.M., Dekimpe, M.G.: The effect of business-cycle fluctuations on private-label share: what has marketing conduct got to do with it? J. Mark. 76(1), 1–19 (2012)
Lovreta, S., Končar, J., Stanković, L.: Effects of increasing the power of retail chains on competitive position of wholesalers. Acta Polytech. Hung. 12, 213–228 (2015)
Martos-Partal, M.: Innovation and the market share of private labels. J. Mark. Manage. 28(5–6), 695–715 (2012)
Nielsen. NIELSEN 360 El consumidor toma el control (2017). https://www.nielsen.com
Rossi, P., Borges, A., Bakpayev, M.: Private labels versus national brands: the effects of branding on sensory perceptions and purchase intentions. J. Retail. Consum. Serv. 27, 74–79 (2015)
Sorescu, A.B., Spanjol, J.: Innovation’s effect on firm value and risk: insights from consumer packaged goods. J. Mark. 72(2), 114–132 (2008)
Steenkamp, J.-B.E.M., Van Heerde, H.J., Geyskens, I.: What makes consumers willing to pay a price premium for national brands over private labels? J. Mark. Res. 47(6), 1011–1024 (2010)
Tidd, J.: Innovation management in context: environment, organization and performance. Int. J. Manage. Rev. 3(3), 169–183 (2001)
Weiss, C.R., Wittkopp, A.: Retailer concentration and product innovation in food manufacturing. Eur. Rev. Agric. Econ. 32(2), 219–244 (2005)
Acknowledgements
Authors would like to acknowledge Promarca and Kantar Worldpanel’s contribution to the research and thank Ana Varela for her valuable ideas and insights.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2019 Springer Nature Switzerland AG
About this paper
Cite this paper
Derqui, B., Occhiocupo, N. (2019). The Interplay Between Manufacturer Brands and Private Labels: Radical Innovation in Consumer Packaged Goods in Spain. In: Martínez-López, F., Gázquez-Abad, J., Roggeveen, A. (eds) Advances in National Brand and Private Label Marketing. NB&PL 2019. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-18911-2_3
Download citation
DOI: https://doi.org/10.1007/978-3-030-18911-2_3
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-18910-5
Online ISBN: 978-3-030-18911-2
eBook Packages: Business and ManagementBusiness and Management (R0)