Why Do Local South Korean Market Leaders Supply Retailer Grocery Brands?

Abstract

This paper examines why many of the leading South Korean brand manufacturers produce retailer brand products within their major product categories. The reasons identified include: pressure from retailers; protection of other national brand product ranges; maintenance or improvements in working relationships; protection of other distribution channels; savings in marketing budgets; diversification of product lines and changing competitive structures. Evidence is also provided of the dynamic nature of decision making relating to retail brand supply across the whole portfolio of brands which the manufacturer offers, rather than in respect of individual product brands or markets which has tended to be the focus of much existing work.

Power Dynamics, Supply Network Restructuring and Modernised Retailing in China: A Comparison of Two Food Staples

“…see Shannon 2014, on Thailand), but sales levels are expanding quickly in many countries, albeit from a low base. Cho et al (2013) offer one of the few studies to investigate retailer-supplier relations through the lens of private labels in an emerging market, providing a comprehensive examination of why many leading manufacturers produce private labels alongside their core brands in the Korean market. They find that at the early stages of participation, leading producers were under great pressure from retailers to produce for them.…”