Retailer brands and channel Conflict: the case of Supermarkets in Nairobi

Abstract

This Study was done between the months of July and September 2003, with the objectives of establishing the impact of introduction of own brands (or retailer brands) by supermarkets in Nairobi on the levels of conflicts with the manufacturers who supply them with competing brands. Data was collected through two questionnaires, one to the manufacturers and the other to the supermarkets. A population of 10 supermarkets (all the supermarkets with own brands in Nairobi) was surveyed representing 100% response rate. On the other hand there were 55 manufacturers, nationally who were supplying the 10 supermarkets with competing brands. We managed to get 2~ responses from this sector (50% response rate). The data was analyzed by use of descriptive statistics more so, tables, percentages, proportions, frequencies and means. Descriptive statistics enabled the researcher to summarize and organize data in an effective and meaningful way as they provide tools for describing collections of statistical observations and reducing information to an understandable form. The research findings showed that though supermarkets and the manufacturers have conflicts or disagreement issues, there was no growth in the levels of conflicts after the introduction of own brands by the supermarkets. This was due to the support that the supermarkets continue to give the competing brands even they introduce own brands. The facts that the manufacturers classified the competition between their brands and the supermarkets own brands as fair and that their sales grov after introduction of own brands are some of the reasons there was no growth in conflicts. Both the supermarkets and the manufacturers agreed that joint goal setting is the best strategy for solving conflicts. Further research recommended in this area is how supermarkets market their own brands, on development and growth of own brands in other industries like clothing and on how own brands impact on business relationship between the manufacturers and the supermarkets at a National level.