A model of consumer choice for national vs private label brands

Most consumer choice theory is built around the study of manufacturer brands but in recent years there has been a dramatic rise in the share of private label brands. This empirical study suggests that models of consumer choice need to reognise an asymmetry in competition when both manufacturer and retailer private label brands are available. A nested logit model is introduced which demonstrates asymmetric cross-brand substitutability in this type of market and leads to important implications for strategic brand management.