Are National Brands More Promotion Elastic Than Store Brands?

Abstract

Are national brands more discount elastic and display/feature elastic than store brands? This research tests this traditional view using a dataset comprising of 18 brands from five retail chains, 424 SKUs and 24,260 observations that account for over 90 % of the Carbonated Soft Drinks category sales. Our results indicate that, on aggregate, there are no significant differences in response elasticities between national brands and store brands. However, leading national brands in popular subcategories conform to a large extent to the traditional view of being more promotion elastic than store brands. Implications of these findings for managers and directions for future research are discussed.