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Marketing store brands and manufacturer brands: Role of referent and expert power in merchandising decisions

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An Erratum to this article was published on 01 November 2016

Abstract

The purpose of this article is to explore the use of power in the merchandising of store brands and manufacturer brands in a highly concentrated fast-moving consumer goods (FMCG) retail environment where grocery retailers wield phenomenal power over manufacturers. The study employed in-depth interviews and in-store category observation in five product categories and triangulated the results of the two study methods and the five categories. While grocery retail chains own the point of sale and market their own store brands alongside competing manufacturer brands, despite having the balance of power over manufacturers in a highly concentrated grocery retail environment, it is not necessarily coercive power that drives merchandising practice for store and manufacturer brands. Indeed, referent and expert bases of power play a key role. Consistent with rational business judgement, what is best for the consumer and the business is what largely gets factored into merchandising policy. Little research has specifically scrutinised the merchandising patterns of store and manufacturer brands in a highly concentrated FMCG retail environment using specific sources of power as a theoretical base. This article further suggests a relevant theoretical framework for store and manufacturer brand merchandising practice in a highly concentrated FMCG retail environment.

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Authors and Affiliations

  1. School of Management and Enterprise, Faculty of Business, Education, Law and Arts, University of Southern Queensland, Toowoomba, QLD, 4350, Australia

    Ranga Chimhundu

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  1. Ranga Chimhundu
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Correspondence to Ranga Chimhundu.

Additional information

An erratum to this article is available at http://dx.doi.org/10.1057/s41262-016-0020-6.

Appendix: interview guide

Appendix: interview guide

  1. Note 1

    This interview guide was not seen by the interviewees. The guide has a list of topics that were covered in the research interviews and the list of topics served to guide the questioning.

  2. Note 2

    This interview guide is an extract from a larger list of topics as the research interviews were part and parcel of a larger study that covered other areas other than merchandising. Specific issues that were covered on merchandising were based on points 4 and 12 of the larger list of topics and these are expanded below to specify the sub-issues that were covered with respect to merchandising decisions.

  3. Note 3

    On the subject of merchandising decisions, examining the role of power with respect to the entire merchandising arrangements was the main purpose of the interviewer.

Specific issues discussed:

  • Background information:

  • FMCG retail chain/specific supermarket chain/manufacturer/relevant product categories.

  • Merchandising issues and operational arrangements:

  • Category brand and product portfolio (store and manufacturer brands, and products).

  • Shelf display patterns for store and manufacturer brands.

  • Product deletion and ranging/stocking.

  • Allocation of shelf space/shelf position.

  • Other issues relevant to merchandising decisions.

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Chimhundu, R. Marketing store brands and manufacturer brands: Role of referent and expert power in merchandising decisions. J Brand Manag 23, 24–40 (2016). https://doi.org/10.1057/s41262-016-0003-7

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  • DOI: https://doi.org/10.1057/s41262-016-0003-7

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