Product brand differentiation and dual‐channel store performances of a multi‐channel retailer

Ruiliang Yan (School of Business and Economics, Indiana University Northwest, Gary, Indiana, USA)

European Journal of Marketing

ISSN: 0309-0566

Publication date: 1 June 2010

Abstract

Purpose

The purpose of this paper is to provide a framework to help business marketers with online and traditional retail channels (multi‐channel retailers) to find the optimal branding strategy and market structure in order to maximize their profits.

Design/methodology/approach

A game‐theoretic model is developed to determine the optimal branding strategy and market structure for the dual‐channel stores of a multi‐channel retailer.

Findings

The paper demonstrates that an optimal branding strategy and market structure exists for the dual‐channel stores of a multi‐channel retailer. When a retailer uses multiple channels in parallel to sell its product, the optimal branding strategy is to employ as large as possible brand differentiation between the dual‐channel stores, particularly when the price is less sensitive for consumers and the market base size is larger. Furthermore, it is also found that the optimal market structure is the Stackelberg mode, especially when the product brands between the two channels are less differentiated.

Research limitations/implications

The present study assumed that all information is known to both the online and traditional channels of a multi‐channel retailer. However, information could be incomplete. It is recommended that future research explore the value of product brand differentiation under incomplete information settings.

Practical implications

The paper provides a very useful model framework, branding strategy, and market structure for business managers who are using or planning to use multiple channels to sell their products.

Originality/value

This paper fills a conceptual and practical gap for a structured analysis of the current state of knowledge about multi‐channel branding strategies. The paper provides practical and solid advice and examples demonstrating the application of product brand differentiation strategies for business managers.

Keywords

Citation

Yan, R. (2010), "Product brand differentiation and dual‐channel store performances of a multi‐channel retailer", European Journal of Marketing, Vol. 44 No. 5, pp. 672-692. https://doi.org/10.1108/03090561011032324

Download as .RIS

Publisher

:

Emerald Group Publishing Limited

Copyright © 2010, Emerald Group Publishing Limited

Please note you might not have access to this content

You may be able to access this content by login via Shibboleth, Open Athens or with your Emerald account.
If you would like to contact us about accessing this content, click the button and fill out the form.
To rent this content from Deepdyve, please click the button.