The coexistence of manufacturer brands and retailer brands in FMCG product categories

The coexistence of manufacturer brands and retailer brands in FMCG product categories

The thesis investigates the coexistence of manufacturer brands and retailer brands in FMCG (fast moving consumer goods) product categories in the radically-shaped grocery retail landscape characterised by high retail consolidation and concentration, as well as direct competition between brands owned and managed by owners of the grocery retail shelves (retailer brands) and those owned and managed by their suppliers (manufacturer brands). The thesis argues firstly, that an FMCG/supermarket environment characterised by high retail consolidation and concentration does not necessarily lead to an overdominance of retailer brands in relation to manufacturer brands in the product categories. There are deeper underlying factors that support equilibrium points between the two types of brands. Secondly it is argued that, in addition to consumer choice considerations, aspects of strategic dependency between manufacturer brands and retailer brands have relevance for the determination of policies that govern the coexistence of the two types of brands in the categories. The aspects of strategic dependency examined are product innovation and category support. Finally it is argued that, in the New Zealand FMCG/supermarket landscape characterised by high retail consolidation and concentration, and direct competition between brands owned and managed by owners of the grocery retail shelves (retailer brands) and those owned and managed by their suppliers (manufacturer brands); despite the fact that there is an asymmetrical power relationship that is in favour of the grocery retail chains vis-a-vis manufacturers, it is actually expert and referent bases of power rather than coercive power that are dominant in the coexistence relationship of the two types of brands. The study is set in the realist variant of the interpretive paradigm and adopts the case study research methodology. The research process involves a review of the literature, a preliminary study into retailer brand share trends in four countries, a pilot study, and the main study which is New Zealand based. The main study involves in-depth interviews with supermarket retailers, FMCG manufacturers and industry experts; as well as instore category observation studies. The mode of data analysis employed is content analysis. The thesis is made up of seven chapters; Chapter 1, an overview of the study; Chapter 2, literature review; Chapter 3, research issues; Chapter 4, methodology; Chapter 5, a preliminary study on retailer brand share trends; Chapter 6, results and discussion; and Chapter 7, conclusions and implications.