Innovation and the market share of private labels

Abstract This study investigates national brand manufacturers' innovations, and analyses the relationship between innovation and the market share of private labels in the consumer packaged-goods industry. The data for this study come from two extensive databases that cover 142 product categories during 2004–2006. According to logistic regression methods adapted to the resource allocation context, manufacturers' innovation strategy has a negative impact of the market share of private labels in two specific market conditions. Managers therefore must design a strategy that aligns with the market conditions because an innovation strategy may be effective in some situations, whereas in others a different strategy or combination of strategies may be more appropriate. Keywords: private labelinnovationmanufacturer Acknowledgement The author thanks Nora Lado and Ester Martinez for providing some of the data and for their useful comments. She also thanks Óscar Gónzalez for his data assistance. This research recieved partial support from the Ministerio de Educatión y Ciencia Dir. Gral de Investigación (Spain), Grant SEJ 2007–65897.