An Study On The Effect Of Developing Private Brand On Strategic Relationship Between Retailer And Supplier

During the recent years, the relations between retailers and suppliers, AKA, Vendor Relations have been becoming a focused issue among marketing scholars. With the expanding of retailers’organization and market scope, the challenge that retailers bring to suppliers is bigger and bigger, in which private brands of the former has played an important part. Private brands help to enhance retailers’ strategic status in the supply chain and affect strength contrast between two parts. Some manufacturers compete with retailers in various ways, meanwhile, others prefer to make use of their overcapacity to yield products of private brands with OEM, which even lead to a more closer strategic alliances. It shows that the using of private brands not only has triggered zero for the game (competition effect), but also in a certain degree pushed retailers and suppliers to a collaboration or a alliance (combination effect). Therefore, I wonder whether private brands will have influence on strategic relations between retailers and suppliers or not? If so,in which aspects? The research available has not given an efficient answer yet. This paper will try to reply the questions above with method of case study, using examples of Strategic Alliance between P&G and Wal-mart.Under any circumstances, completion and combination are both existing in retailer-supplier relationship, in view of which, this article discusses strategic relations between those two parties and inspects the influences of private brands. It concludes that private brands adjust the relations between retailers and suppliers in some ways and the corresponding theory framework will be induced and lay certain foundation for succeeding researches. The main conclusions are as follows:Conclusion1:Private brand is a double-edged sword with different leverages, that is to say, not only promotes strategic cooperation but also intensifies competition and game between retailers and suppliers. All in all, it is an important way to adjust retailer-supplier strategic relationship.Conclusion2:It is a kind of marketing channel behavior that retailers develop their own brands, which will improve synergy as well as zero for the game between retailers and suppliers. Conclusion3:Private brands bring cost edge for both parties and their mutual completion will break the cost and price system, which will make both suffer from great loss.Conclusion4:The function of private brands in retailer-supplier relationship is fighting brands or alternative brandsHere are Innovations in this article:First, combining private brands with retailer-supplier relationship, investigating impact that the former has on the latter, concluding its function mechanism and then refining the corresponding theory framework.Second, based on "P&G and Wal-mart mode", analyzing the adjustment effect of private brands in the win-win relations, at the same time, providing advice for both parties.