Research On The Strategy Of Retailer's Store Brand Introduction Considering Sales Efforts

In the traditional marketing channel,the retailer only serves as the manufacturer's distribution channel.They sell the manufacturer's national brand products,and competes with other retailers who holds the same products in the same market.Manufacturers can also open online sales channel to directly trade with consumers.Therefore,retailers are relatively weak in the competition with manufacturers.They urgently need to take steps to change the status quo.The introduction of store brands not only helps retailers reach more consumer groups,but also enhances retailers' status in channel cooperation.In the past few decades,store brands have evolved into powerful weapons for retailers to make strategic transformations.In the fierce market competition,in order to compete for a larger market share,all parties in the channel will inevitably put into sales efforts,which will have an impact on market demand.This paper studies the introduction of retailers' store brands in the single-channel secondary supply chain system whose demand is affected by the level of sales effort.By constructing the game model,this paper analyze the introduction of store brand theoretically and numerically,and then the main conclusions of this paper are obtained.Under the four sales effort cost structures,there is a negative correlation between the manufacturer's profit and the cross-price elasticity coefficient between the retailer's store brand and the existing national brand.Under the three cost structures of no sales efforts,retailers providing sales efforts,and both parties providing sales efforts,the retailer's profit is positively correlated with the cross-price elasticity coefficient between the two products.And the retailer is more motivated to introduce the store brand which can be high replacement of national brand.In the cost structure where the manufacturer invest sales efforts,the introduced store brand and the national brand are less alternative when the manufacturer's sales efforts are significantly contributing to the sales of the products.At this time,the introduction of store brands can benefit both parties in the supply chain.Moreover,under this cost structure,retailer profits decrease as the cross-price elasticity coefficient between the two products increases,and retailers will not introduce store brands with high substitution.In the cost structure where retailers are engaged in sales efforts,the retailer's sales efforts and profits increase as the substitution of the two products increases.For the manufacturer at this time,the introduction of store brands does not necessarily damage his profit.The increase in sales efforts will also increase the sales of the national brand.Finally,this paper analyzes manufacturer profit,retailer profit and total profit under different cost structures.It is found that in the market where the retailer's store brand have been introduced,it is not always possible to maximize the overall profit of the channel when both manufacturers and retailers make sales efforts.When the substitution between the two products is small,the cost structure of the manufacturer's sales efforts can maximize the overall profit of the channel.When the substitution between the two products is large enough,the retailer's sales efforts can maximize the overall profit of the channel.