Effects of pricing, differentiation and value offering on the brand performance in competitive contexts

Abstract

Brands have different market share and profit margin performances that may be stimulated if they are competing with few competitors or unstimulated if they are competing with many competitors. In retail, supermarket own brands and manufacturers brands have performances within these competitive contexts. This study investigated the effects of marketing strategies used by retailers on supermarket and manufacturer brands' performance at different levels of competitive contexts. We used secondary data of pricing, differentiation, profit margin and market share of brands from a supermarket chain and, additionally, through survey, we collected data about the perceived value (familiarity and perceived quality) of each brand with customers in the supermarket. The sample was composed of 111 brands of 15 products marketed over 234 days. The regression results showed that marketing strategies (premium pricing, promotional price variation, level of differentiation and brands offering with different values) exert effects on the brand's performance (market share and profit margin), but they are not equal for supermarket and manufacturers brands in different competitive contexts. The study helps brand managers to identify the contexts to implement the strategies above mentioned.