Consumers Switching to Store Brands: Is Product Innovation Effective to Prevent it?

Abstract

Product innovation is a critical activity for CPG companies to add value to consumers, enhance the equity of their brands and also to fight store brands. The purpose of this paper is to better understand whether product innovation is an effective strategy to prevent consumers switching to store brands and compare its effects to other marketing tools as promotion and price gap management. In terms of managerial implications the ideas offered herein suggest different degrees of success of product innovation as a tool to prevent switching. We highlight also differences compared to promotional and pricing gap management that could help to better understand the store brands dynamics and will contribute to the development of more efficient national brand manufacturers in the market place.