The effects of retail concentration and own label penetration on manufacturer advertising and product variety

Abstract

Retail change in the convenience goods sector has been a dramatic feature of the United Kingdom since 1945 and of the 1970 in particular. The impact of such change on manufacturers is an area that is under developed both in economic and business research. This thesis aims to examine the effects on manufacturer advertising and brand variety of two of the most notable feature s of retail change, retail concentration and own label. After an examination of the changing retail environment in chapter one, the literature review in chapter two reveals that despite strong theoretical expectations of retail structure having an impact on manufacturers there is little empirical work on the subject. The empirical work on retailer-manufacturer interaction has been concerned with manufacturer profitability almost exclusively. Chapters three and four explore the existing theory and evidence on the structural determinants of advertising and variety. This exploration helps identify structural variables to be included with retail variables in the empirical part of the thesis. Chapter five develops the specific hypotheses regarding the effect of retail concentration and own label penetration on manufacturer advertising and brand variety both at firm and market level. Chapter six describes the sample and variables to be tested. The sample is for two periods, 1970 and 1981, which enables an analysis of change to be made as well as static cross sectional analysis. Chapter seven reports the results of the tests on advertising and chapter eight the results on brand variety. Chapter nine provides a summary of the results whilst chapter ten concludes by suggesting that the strong expectation of retail structure having an impact on manufacturer advertising and variety is given limited support by the empirical results. The importance of further work, the need for improvement in data provision and specific areas for research are then identified.