Strategic interactions in marketing channel: Shelf-space allocation, pricing and advertising decisions

This thesis has a vested interest in the strategic interaction in a marketing channel composed of one retailer and one manufacturer. The importance of such interaction is reinforced when the retailer competes against the manufacturer by offering her own brand along with the national one and when channel members have to decide on the optimal amount of shelf space to be allocated to each brand within a category, what price is suitable for each one of them and how much money to invest in advertising in order to increase the goodwill of each brand in the market.; One of the important merchandising decisions in retailing is the allocation of the shelf space to different categories and brands. The literature has suggested long time ago rules to help retailers optimize the value of such asset. These rules, which are related to profitability and consumer's desire of variety, are now implemented in widely available software. Nevertheless, One aspect is missing in both the operations research literature and in the decision-support systems: the strategic interaction between manufacturers and retailers. Indeed, the formers are competing among themselves to secure the biggest possible share and hence are attempting to design mechanisms to incite the retailers to provide them a competitive advantage. On the other hand, private labels have been gaining ground in all major economies and their popularity is increasing. Then, their role in retailing cannot be ignored any more. Improved quality was verified as a major determinant of their success. However, national brands remain always the most powerful brands as long as they invest heavily in advertising. Hence, it seems that investing in advertising to build up more equity for private labels becomes more and more a necessity at least for some categories to be able to compete with leading national brands.; The first essay considers a static game where the national brand's manufacturer acts as a leader and maximizes her own profit and the retailer who carries the manufacturer's national brand as well as her private label, acts as a follower and maximizes the total categories profit. In this essay, the retailer may offer either a private label of low quality or a private label of high quality. The essay has three objectives: (i) it characterizes the resulting equilibrium in terms of shelf space and pricing (retail prices and wholesale price) assuming that no brand could be excluded from the shelf, (ii) discusses the divergent insights with previous studies and available software in retailing (PROGALI, SLIM, OBM, etc.) and finally (iii) provides sensitivity analysis for analyzing closely the impact of specific parameters, measuring the private label's quality, on shelf-space allocation decision and profits. The results of this exploratory study propose that the allocation on the shelves depends on the private label's quality highlighting the fact that this quality is a multidimensional concept.; Assuming that the retailer is also a competitor of the national brand's manufacturer, i.e., offering her own brand to consumers along with the national brand, the second essay attempts to find under which conditions it is feasible for a manu facturer to design an incentive scheme dependent on the shelf space such that (i) it improves her proportion on the shelves with respect to a benchmark scenario with no incentive and (ii) it is profitable for her. In this essay, we allow the retailer to use either a differentiation or an imitation strategy to precise the private label's concept competing against the national brand. Hence, the retailer may offer a premium brand, a me-too brand, a white-label generic or a distinct-second tier. The results show that the design of a shelf-space-dependent incentive depends on factors such as: (1) the private label's concept as measured by the private label's image and the price competition between both brands in the market, (2) the transfer price's level when no incentive i...