Supported by the concentration of retailers

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supported by the concentration of retailers, especially if they are aiming for high profits and retailers who manage brands as part of their format, in order to be even more proficient. This causes high quality brands to compete with national brands. Based on this background the goal for the researchers was to find out, if the same phenomenon could be found in the Netherlands. In order to achieve their goal the authors made use primary research using in-depth interviews, surveys of 100 managers from FMCGs and an analysis of the performance of each named strategy . (Verhoef, Nijssen and Sloot, 2002). First of all more detailed information about past, traditional views and different strategic options were given. In the past national and private brands did not directly compete with each other because they had different strategy groups. Traditionally private brands offer either products with a high value for money, or products at a low price strategy. Verhoef et al. used the six strategic options implemented by Hoch 1996 in order to evaluate the most used strategy (as cited Verhoef et al. 2002). The six options either belong to the quality dimension or to the price dimension, they include: 1. new and improved products 2. more for money 3. reduce the price gap to private labels 4. formulate a value flanker 5. wait and see 6. and create a premium private label A value flanker stands for a lower priced, lower quality product, which includes a high barrier of entry to new markets because of a relatively small market share. Their primary, qualitative research showed that most of the managers still consider private labels as a separate category than national brands. But they are taking them into account when formulating aggressive, competitive actions and brand strategies. Most of the managers stated that they use extra advertisement and focus on quality improvement. Additionally they pointed out that value flankers is a very unpopular option, because it harms the relationship with the retailers (Verhoef, Nijssen and Sloot, 2002).In order to measure the brand performance 75
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measurements like the review of brands and companies, market positions, the level of segmentation, attitude towards cooperation with retailer and producing private labels were applied. In order to analyze these outcomes a hierarchical cluster analysis and a variable factor analysis were adopted. The variable factor analysis showed that four factors added up to 65% of the variations of strategic reactions. Most applied was the relative brand strength/ image and product variety. This was followed up by the attitude towards private label production, in addition the reaction of competitor´s attitude towards private label production plays a role and fourth the ability to create technological product differentiation (Verhoef, Nijssen and Sloot, 2002).
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