Review of Industrial Organization 24: 129–141, 2004.
© 2004 Kluwer Academic Publishers. Printed in the Netherlands.
Investigating the Cross-Category Effects of Store
and JAGMOHAN S. RAJU
College of Adm. Sci. and Econ., Koç University, Rumeli Feneri Yolu, Sariyer, Istanbul, 80910,
Turkey, E-mail: firstname.lastname@example.org;
The Wharton School, University of Pennsylvania, 700 Jon M.
Huntsman Hall, 3730 Walnut Street, Philadelphia, PA, 19104 - 6371, U.S.A.,
Abstract. Our study examines the cross-category effects of store brand products in other categories
on the products in a target category. Using scanner data for 13 product categories, we ﬁnd that higher
number of store brands in other categories increases the store brand share in the target category.
In addition, share of the leading national brand in the target category is negatively affected by the
number of store brands in other categories. Our results do not offer evidence for the effects of store
brand promotions in other categories on both the store brand and the national brands in the target
Key words: Brand extensions, promotions, retailing, store brands
Store brands constitute about 20% of unit sales and are among the top three
brands in 70% of supermarket product categories (IRI, 1998). Although store
brand penetration varies across retailers, store brands are the only products that
recur throughout the store. No other product has presence in so many categories
(Hoch, 1996). Existing literature provides insight about various issues regarding
store brands; however, we do not know much about the effects of the widespread
presence of store brands across categories on factors relevant to the retailer. In this
paper, we examine the effects of store brands in other product categories on both
the store brand and national brands in the target category. More speciﬁcally, we
examine the effects of the number of store brand products carried by the retailer
and the sales promotion activity of store brands in other categories on the sales of
store brand and national brands in the target category.
In our empirical analysis, we estimate demand models of the store brand, lead-
ing national brand, and the weaker national brand in a category. We use syndicated
scanner data from A. C. Nielsen consisting of 13 product categories and 122 re-
The authors thank
Insan Tunalı and Zeynep Gürhan-Canlı for their comments on the earlier
version of this paper.