Study of the competitive dynamics between national brands and private labels within the soft drinks industry

Purpose: Our dissertation aims at understanding how competitive dynamics influence the performance of Private Labels (PL) and National Brands (NB) within the French soft drinks industry. We seek to understand how PL brands and NB build their competitive advantage in the market and how they compete against one another. Lastly, our objective is to make managerial recommendations designed to guide the future development of NB and PL in the soft drinks industry. Methodology: Our dissertation is a qualitative study. We gathered the inputs of 10 experts working for both retailers and manufacturer goods companies evolving in the French soft drinks industry. Our interviews were analysed through the content analysis method. Findings: Most PL brands follow a cost-leadership strategy and have an aggressive competition style. They merely imitate NB products and position their products at a lower price to attract the consumers. In contrast, NB differentiate their offer through innovation, quality improvements and, most importantly, advertising in order to create an emotional link with their consumers. Nevertheless, market trends and new consumers’ needs are encouraging PL brands to premiumize, forcing them to innovate and improve the quality of their products. Despite those efforts, PL brands are not considered as a threat by market leaders. We argue that PL brands need to invest more in advertising in order to build an identity, trust and create a link with their consumers.