The Strategy of Own Brands

The author attempts in this article to compare some economic aspects of own and manufacturers' brands, in an attempt to shed light on some of the broader issues in the economics of marketing. The choice of brand policy is complex, depending on demand — and supply — side variables. Simple explanations of either the price differential between own and manufacturers' brands, or their relative market shares are misleading. Despite the absence of sufficient data, preliminary indications are that the price differential is related to different marketing expenditures. However, the market share of own brands is not related to the price differential alone; its market penetration is limited by the strength of the manufacturers.