PRIVATE LABELS AND NATIONAL BRANDS:
A CASE STUDY OF CANADIAN TIRE
A Thesis
Presented to
The Faculty of Graduate Studies
of
The University of Guelph
by
JIA LI
In partial fulfilment of requirements for the degree of
Master of Science
July, 2010
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1+1 Canada ABSTRACT
PRIVATE LABELS AND NATIONAL BRANDS: A CASE STUDY OF CANADIAN TIRE
Jia Li Advisors University of Guelph, 20 1 0 Dr. Brent McKenzie Dr. May Aung
This study investigated the similarities and differences between strategies of objective price, objective quality, and advertising elements for private labels and national brands from a retailer's perspective over time. A case study of archival datas (1991 to 2001) examined for Canadian Tire focused on three selected product categories - automobile tires, bicycles, and lawn mowers. Different patterns of retail strategies of objective price, objective quality, and advertising elements for private labels and national brands were found for these three product categories and three specific products within these categories. Retail strategies of these three elements were dependent upon the different nature of each product category and the related specific products. Insights offered from this study indicated the importance of examining retail strategies over time as well as at the micro level and product category and product specific levels. The overall strategies used by Canadian Tire to compete with other retailers are also discussed. Implications and future research recommendations are offered. ACKNOWLEDGEMENTS
Writing this thesis has been a tough and adventurous journey to me. I'm grateful to have always been accompanied by the love, care, and support from my family members, my advisors, my committee member, my friends, and many others during the past three years. Through their support, I have been able to successfully complete this thesis. Now, I would like to take this opportunity to express my gratitude for all of them.
First of all, I am deeply indebted to my advisor and my external committee member, Dr. Brent McKenzie and Dr. Dale Miller, for their comments, guidance, and patient throughout this thesis work. Without them, I won't be able to get the opportunity to work on this project. Whenever I came across difficulties in research, they helped me to find out the solutions and overcome the problems.
Secondly, but most importantly, I would like to express my immense gratitude to my co-advisor, Dr. May Aung. Whenever I lost my confidence in my study, she encouraged and motivated me to move forward. To me, she is not only a dedicated advisor, but also a friend, a mother figure. It is my greatest honor to be her student. Without her belief and constant moral support, I would not be able to successfully complete this thesis.
Besides my advisors and committee member, I would also like to express my thanks to the Archives and Research Collections Centre at University of Western Ontario (particularly for the Archivist, Bev Brereton), as well as the Canadian Tire Corporation. Without the successful corporation and the archival materials provided by the collection centre, 1 would not start and finally complete my research project.
1 would also like to thank the rest faculty members of the department, our secretaries, Lisa Cauley and Rita Raso, for their consistent help and assistance in the last three years. Also, 1 would like to thank my friends both in Canada and China, for their help, comfort and supports.
Last but not least, I would like to express my utmost gratitude to my parents and my husband—Zhengji Zhuge. I'm thankful for their always being behind me, loving me, supporting me, and caring me in these years.
Il Table of Contents
CHAPTERhINTRODUCTION ' 1.1 Overview 1 1.2 Research Purpose 2 1.3 Research Method 3 1.4 Research Design 4 1.5 Organization of Thesis 5 CHAPTER 2: LITERATURE REVIEW 6 2.1 Introduction to the Retail Sector 6
2.1.1 Retail Success Factors 7 2.2 The Role of Product and Branding 10 2.2.1 Branding in the Retail Context H 2.3 Crucial Marketing Elements 18 2.3.1 Objective Quality 18 2.3.2 Objective Price 21 2.3.3 Advertising 25 2.3.4 Marketing Elements Summary 28 2.4 Research Gaps, Propositions and Research Model 28 2.4.1 Objective Quality 29 2.4.2 Objective Price 30 2.4.3 Advertising 3^ 2.4.4 Framework of the Study 32 CHAPTER 3: METHODOLOGY 35 3.1 Research Design 3^
iii 3.1.1 An Overview of the Case Study 35 3.1.2 Unit of Analysis -Canadian Tire 36 3.1.3 Archival Study 37 3.2 Data Collection 38
3.2.1 Product Selection 41 3.3 Data Analysis 42 3.4 Qualitative Research Criteria 44 CHAPTER 4: RESEARCH FINDINGS 47 4.1 Overview 47 4.1.1 Preparation for Demanding Consumers, Economic Downturn, and Competition from the U.S. (1991-1995) 47 4.1.2 New and Improved Strategies for Competition (1996-2001) 49 4.2 Descriptive Findings: Objective Quality Over Time 52 4.2.1 Findings for Objective Quality of CTCs Private Label Products Over Time 52 4.2.2 Findings for Objective Quality Differentiation of Private Label and National Brand Products 55 4.3 Descriptive Findings: Objective Price Over Time 58 4.3.1 Findings for Objective Price of CTCs Private Label Products Over Time 58 4.3.2 Index (Average) Price Comparison of CTCs Private Labels and National Brands Over Time 61 4.3.3 Findings for Objective Price Comparison of CTCs Private Labels and National Brands Over Time 65 4.4 Descriptive Findings: Advertising Over Time 69 4.4.1 Findings for CTC Catalogue Advertising of Specific Tire Product P205/70R14 93S and Overall Tire Product Category 70 4.4.2 Findings for CTC Catalogue Advertising of Specific Bicycle Product 18-speed MTB and Overall Bicycle Product Category 72
IV 4.4.3 Findings for CTC Catalogue Advertising of Specific Gas Lawn Mower Product and Overall Lawn Mower Product Category 75 CHAPTER 5: DISCUSSION, RESEARCH CONTRIBUTIONS, LIMITATIONS, AND RECOMMENDATIONS 78 5.1 Discussion: Objective Quality 78 5.1.1 Objective Quality: Proposition 1(a) 78 5.1.2 Objective Quality: Proposition 1(b) 80 5.2 Discussion: Objective Price 81 5.2.1 Objective Price: Proposition 2(a) 81 5.2.2 Objective Price: Proposition 2(b) 82 5.2.3 Objective Price: Proposition 2(c) 83 5.3 Discussion: Advertising 84 5.3.1 Advertising: Proposition 3 84 5.4 Overall Discussion: CTC Strategies Over Time 86 5.5 Research Contributions, Limitations, and Recommendations 90 5.5.1 Research Contributions 91
5.5.2 Research Limitations 92 5.5.3 Recommendations for Future Research 93 REFERENCES 95 REFERENCES RELATED TO CANADIAN TIRE 107 APPENDIX 1 : Canadian Tire's Main Competitors 1 10 APPENDIX 2: CTC Annual Catalogue Cover Page Example 1 1 1 APPENDIX 3: CTC Seasonal Catalogue Cover Page Example 1 12 APPENDIX 4: Tire Product Category: Brands and Objective Quality Element/Terminology Descriptions ' '3 APPENDIX 5: Bicycle Product Category: Brands and Objective Quality Element/Terminology Descriptions ' '7 APPENDIX 6: Gas Lawn Mower Product Category: Brands and Objective Quality Element/Terminology Descriptions '20 APPENDIX 7: Advertising Page Count Examples 122 APPENDIX 8: Canadian Tire Operation Overview During 1991 to 2001 125 APPENDIX 9: Objective Quality Analysis of Private Label Tire Product during 1993 to 2001 ...... 127 APPENDIX 10: Objective Quality Analysis of Private Labels Mountain Bicycle Product during 1993 to 2001 13° APPENDIX 1 1 : Objective Quality Analysis of Private Label Lawn Mower Product during 1991 to 2001 132 APPENDIX 12: Objective Quality Analysis between Private Labels and National Brand -Tire Product during 1996 to 2001 133 APPENDIX 13: Objective Quality Analysis between Private Labels and National Brand - Mountain Bicycle Product during 1993 to 2001 I36 APPENDIX 14: Objective Quality Analysis between Private Labels and National Brand -Tire Product during 1998 to 2001 138 APPENDIX 15: Matched Data Points for All Figures in Chapter 4 140
Vl List of Tables
Table 2.1 : Various Terminologies for Private Labels .' Table 2.2: Comparison of Media Type Characteristics Table 3.1: Additional Information of CTC Catalogue (1991 to 2001 period)
VII List of Figures Figure 2.1 General Research Framework 34 Figure 4.1 Objective Price of Canadian Tire Private Label Tire Product of Size P205/70R14 93S during 1991 to 2001 Period 59 Figure 4.2 Objective Price of Canadian Tire Private Label 18-speed Mountain Bicycle Product during 1993 to 2001 Period 60 Figure 4.3 Objective Price of Canadian Tire Private Label Gas Lawn Mower Product during 1991 to 2001 Period 61 Figure 4.4 Average Price Comparisons of Canadian Tire Private Label and National Brand Tire Product of Size P205/70R14 93S during 1996 to 2001 Period 62 Figure 4.5 Average Price Comparisons of Canadian Tire Private Label and National Brand 18-speed Mountain Bicycle during 1993 to 2001 Period 63 Figure 4.6 Average Price Comparisons of Canadian Tire Private Label and National Brand Gas Lawn Mower Product during 1998 to 2001 Period 64 Figure 4.7 Price Comparisons of Canadian Tire Private Label and National Brand Tire Product ofSizeP205/70R14 93S during 1996 to 2001 Period 65 Figure 4.8 Price Comparisons of Canadian Tire Private Label and National Brand 18- speed Mountain Bicycle during 1993 to 2001 Period 66 Figure 4.9 Price Comparisons of Canadian Tire Private Label and National Brand Gas Lawn Mower Product during 1998 to 2001 Period 68 Figure 4.10 CTC Catalogue of Tire Product (Size P205/70R14 93S) Advertising of Private Label and National Brand from 1996 to 2001 Period 71 Figure 4.1 1 CTC Catalogue of Tire Category Advertising of Private Label and National Brand from 1991 to 2001 Period 72 Figure 4.12 CTC Catalogue of 18-speed MTB Product Advertising of Private Label and National Brand from 1993 to 2001 Period 73 Figure 4.13 CTC Catalogue of Bicycle Category Advertising of Private Label and National Brand from 1991 to 2001 Period 74 Figure 4.14 CTC Catalogue of Gas Lawn Mower Advertising of Private Label and National Brand from 1998 to 2001 Period 75 Figure 4.15 CTC Catalogue of Lawn Mower Category Advertising of Private Label and National Brand from 1991 to 2001 Period 76
VlIl CHAPTER 1: INTRODUCTION
1.1 Overview
Hundreds of new products appear on store shelves and are advertised in the media each year. The new products are either generic (private label) or are represented by national brands (Keller, 2008). Some of these products are successful in the competitive market and bring profit to the companies that developed them. However, many other products fail, and may cause significant financial and resource losses to companies. Throughout the 1990s, major changes occurred in retailing, especially in the general merchandise and grocery industries (Ailawadi & Keller, 2004). In many instances, the brand assortment strategy placed more emphasis on private labels due to an increasing demand from the marketplace (Keller, 2008). Private labels, due to relatively lower costs and increasing quality (Fitzell, 1998), have become an important source of profits for retailers (Pauwels & Srinivasan, 2004). Academic interest in the private label and national brand phenomena has also increased over the past decades (Dick, Jain, & Richardson, 1995; Raju, Sethuraman, & Dhar, 1995; Richardson, 1997; Ailawadi, Neslin, & Gedenk, 2001; Gabrielsen & S0rgard, 2007; Méndez, Oubiña, & Rubio, 2008). Scholars from the psychology discipline have examined these phenomena from the consumer's perspective: examples are consumer purchase behaviour of private labels, consumer price consciousness and value consciousness (for example, Dick et al., 1995; Richardson, 1997; Ailawadi et al., 2001). Scholars from the marketing discipline (e.g., Mills, 1995, 1999; Raju et al., 1995) have examined the private label phenomenon from the business perspective: examples are the
1 effects of a private label's introduction on channel strategies and on business profits. Previous studies (Makoto, 1995; Hoch, 1996; Garretson, Fisher, & Burton, 2002; Méndez et al, 2008) have examined mainly the grocery retailers and their product categories such as perishable food or non-food items (for example, hygiene, drugstore and cleaning products) (Rubio & Yagüe, 2009a). However, few studies have focused on general merchandise retailers and/or specialty stores. Due to the competitive marketplace, there is a strong likelihood that general merchandise retailers are adopting different strategies for quality, price, advertising, and service elements between private labels and national brands. Thus, there is a need for an in-depth study on the crucial elements of retail marketing strategy within the context of general merchandise retailers (e.g., a hard goods retailer). This study aims to investigate retail marketing strategies (for example, price, quality, and advertising elements) of private labels and national brands within the context of one general merchandise retailer over time.
1.2 Research Purpose The main purpose of this research was to acquire an understanding of objective price, objective quality, and advertising strategies of private and national brands from one retailer's perspective. Private labels are the own brands of retailers where the retailers take on responsibilities such as warehousing, merchandising, and marketing (Fitzell, 1992; 1998; Lewison & Balderson, 1999). In contrast, national brands refer to a nationally or internationally distributed product with multiple channels/retailers, which is perceived as having relatively higher quality and brand image in the marketplace (Dunn, Murphy, & Skelly, 1986). National brands are perceived as important in determining
2 retailer profitability (Glynn, 2007), store image (Ailawadi & Keller, 2004), and other support factors such as advertising that benefit retailers (Glynn, 2009). Therefore, investigating retailer price, quality and advertising strategies of private label and national brands within the context of one retailer over time gives a better understanding of the retailer's private label innovation process and application of competitive strategies with competing national brands.
To this end, the core research question of this study was, "What role does private and national brand product strategy play in retail success over time?" This research focused on the similarities and differences of objective pricing, objective quality and advertising strategies used for two types of brands: national brand and private label.
1.3 Research Method
In addressing the research question, an archival study within a specific research period was applied. In addition, a case study approach of a specific retailer context was conducted. The case study approach is a research strategy focusing on understanding the dynamics presented within the single setting and real-life context (Yin, 2003; Eisenhardt, 1989). The case study can be used to accomplish various aims, such as providing descriptions, testing theories, or generating theories (Eisenhardt, 1989). In this study, a case study approach of the longitudinal investigation within a specific retailer context was applied to provide an in-depth historical portrayal of how a retailer competed in the marketplace with focus on private labels and national brands strategies. This study selected a Canadian retailer (Canadian Tire) that has a long history and that carries both national brand and private label products. The archival study covering the period from 3 1991 to 2001 was conducted. This archival study followed the ten principles, from archival material selection to data collection and data integrity, as proposed by Miller
(2006a).
1.4 Research Design
Within the context of a case study approach, the unit of analysis was one retailer and Canadian Tire was chosen. The data source mainly comprised of archival materials. The archival collections housed at the University of Western Ontario included store records, promotional materials (for example, catalogues), and international correspondence such as newsletters of Canadian Tire. Archival materials for this study covered the period from 1991 to 2001, 3 numbers of reasons supported the decision to examine this period. The first reason was the increased level of competition during this era. In 1994, Wal-mart entered the Canadian market (taking over Woolco) (Chain Store Age, 1996); in 1998 Zellers then acquired Kmart, while other general merchandise retailers such as Sears and Home Depot offered strong competition to Canadian Tire (Merrilees, 2005). A second reason was that Canadian Tire started redesigning its store format and returned to its roots (1996), focusing on customers during the chosen period. The selected period in the current study was used to explain and examine phenomena within this context, which marks an important "turning point" of Canadian Tire's role in the marketplace. A third reason for choosing this period was that although private label products had been in existence for a long time, they started to grow substantially as a mature brand with more positive brand image and relatively high quality throughout the
4 1990s (Ailawadi & Keller, 2004). Thus, 1991 to 2001 was considered an appropriate period to study.
1.5 Organization of Thesis The remainder of the thesis is organized as follows. The literature review first offers an overview of retail success factors as well as background on the similarities and differences of objective quality, objective price, and advertising strategies within the context of national brands and private labels. The research gap, three propositions, and the research framework for this study are subsequently presented. The research methodology chapter begins with a brief overview of the case study method, followed by the research design for this study and a section on archival data sets. Empirical research findings regarding the roles that private labels and national brands played in retail success with regard to objective quality, objective price, and advertising strategies are presented in the research findings chapter. This thesis concludes with the discussions based on the three propositions, followed by an overview of CTC strategies over time. The conceptual and managerial contributions, limitations, and further research recommendations of this study are also offered.
5 CHAPTER 2: LITERATURE REVIEW
This literature review is divided into four main sections. The first section offers an introduction to the retail context and an overview of retail success factors. The second section focuses on retail product and branding strategies, specifically in the context of private labels and national brands. The third section covers specific strategies related to three marketing elements: objective quality, objective price, and advertising for national brands and private labels. The final section offers the three propositions that this study will investigate in the context of a merchandise retailer.
2.1 Introduction to the Retail Sector
Retailing consists of all activities involved in selling goods or services directly to consumers for their personal or non-business use (Kotier, Armstrong, & Cunningham, 2002). The retail sector consists of various categories such as merchandise retailers (Merrilees, 2005), department stores, specialty stores, discount stores (Kotler et al., 2002) and department discount stores (Merrilees, McKenzie, & Miller, 2007).
Merchandise retailers deal with large-scale retail activities involving a wide range of merchandise such as tools, auto parts and accessories, and household goods; some examples are Canadian Tire and Home Depot (Merrilees, 2005). Department stores carry several product lines—typically clothing, home furnishings, and household goods—with each line operated as a separate department managed by specialist buyers or merchandisers; examples include Sears and The Bay (Kotler et al., 2002). Specialty stores carry narrow product lines, with a deep assortment within lines such as apparel, sporting goods, or furniture (Kotler et al., 2002). The Body Shop, which focuses on 6 cosmetics and bath supplies, is one example of a specialty store. Discount stores and department discount stores offer standard merchandise at lower prices by accepting lower margins and by selling higher volumes to their customers (Kotier et al., 2002; Merrilees et al., 2007). Examples include both general discount stores such as Zellers and Wal-mart as well as a specialty discount store such as Best Buy (electronics).
The retail market and all forms of retailers have been facing rising competition and there is a need for retailers to create a competitive advantage that can be sustainable over time (Ganesan, George, Jap, Palmatier, & Weitz, 2009). Therefore, selecting and implementing appropriate strategies can determine the long-term success or failure of a store (Ailawadi, Borin, & Farris, 1995; Ganesan et al., 2009). In general, the success or failure of a retailer can be measured by examining the well-accepted indicators of successful retailers: increased sales revenue, stronger profit margins and gross margins (Sutton, 1991). However, it is also crucial to measure success not only at one point in time but to examine retailers' successes over time (Ailawadi et al., 1995). A number of strategies play a key role in defining success for retailers. Some of the relevant retail strategies or retail success factors are introduced in the following section.
2.1.1 Retail Success Factors
Various scholars have identified relevant retail strategies or retail success factors from a number of different perspectives. These include perspectives from behavioural and economic theory (Ailawadi et al., 1995), supply chain management (Ganesan et al., 2009), strategic human resource management (Miller, 2006b), strategic marketing and organization capabilities (Miller & Merrilees, 2000), as well as from the perspectives of
7 national and private labels (Middleton, 1996; Steiner, 2004). The following section highlights some of these approaches in examining relevant retail success factors. Ailawadi et al. (1995) conducted a cross-industry analysis of manufacturers and retailers in terms of their performance. From the perspective of economic theory, a number of relevant factors such as the bargaining power of retailers, economic models of channel relationships and coordination were highlighted. In addition, behavioural theory emphasized the means of pricing, customer service, sales promotion, and salesperson training as important for retail successes in the market. From the perspective of supply chain management, Ganesan et al. (2009) proposed the need for operational efficiencies. These scholars presented the value to retailers in moving beyond their traditional grounds in developing the resources and capabilities of their supply chain partners. Practices such as sourcing from global partners, using multi-channels to add better synergy (better coordination), and building relationships based on innovations are seen as crucial success factors for retailers. Innovations involving changes in both product and process innovations in a retailing context were proposed. Specifically, product innovations refer to "product technology or ideas embodied in the product," whereas process innovations are identified as "the set of ideas involved in the manufacture or delivery of a product or the steps necessary to combine new materials to product a finished product" (Ganesan et al., 2009, p. 90). Examples of innovation included focus on vendor-managed inventory, as well as retailers offering Internet sites, sessions on product information, and expert advice. Miller (2006b) proposed a historical perspective of strategic human resource management in the context of department stores. The archival data of the David Jones
8 department store in Sydney, Australia, was used to illustrate the crucial role of human resource management in retail success. Two fundamental functions of human resource management in terms of staff training and internal communications to staff members were highlighted as contributing factors to the firm's performance. A combined approach of strategic marketing and organizational capabilities was offered by Miller and Merrilees (2000). They proposed "The Great Merchants" framework built upon a meta analysis of retail case histories including leading North American retailers such as the Hudson's Bay Company and Sears Roebuck. This framework has three crucial elements: market positioning, distinct periods of expansion, and supporting retail mix operational management. Among many relevant factors, these scholars highlighted the importance of a distinct configuration of a new retail format, the formation of new outlets by building or moving to larger premises (e.g., property investments and location sites), new store design, and new technology. They also offered relevant operational management of the retail mix in the use of mission statements as guidance and the use of advertising and promotion to support expansion decisions. In addition to the studies of Ailawadi et al. (1995), Miller (2006b), Miller & Merrilees (2000), Middleton (1996) and Steiner (2004), many other studies have also examined retail success factors such as products, branding, merchandise assortment, and category management (Glynn, 2007; Grewal & Levy, 2007; Keller, 2008). In particular, the importance of product and brand management for retailers has been acknowledged in the field. The existing power of national brands as well as the rise of private label merchandise was offered as important for retailers (Ganesan et al., 2009), and could be
9 considered as another important factor of retail success. Middleton (1996) also proposed the importance of private labels relative to national brands in terms of retail success. His study within the context of private labels and national brands in the U.K. and Canada helped to provide a better understanding of the role of brand management from a grocery packaged goods perspective. Steiner (2004) suggested that the value of private labels, as a source of competitive advantages can be seen in terms of unique elements such as price, shelf space, quality, and innovation elements. Therefore, the following section provides an overview of product and brand concepts.
2.2 The Role of Product and Branding A product is an offering to a market for attention, for acquisition, for use, or for consumption that might satisfy a need or want for consumers (Keller, 2008); it can be a tangible good, an intangible service, a place or even a person. Kotler et al. (2002) suggest three product levels to consider in developing strategies: core product, actual product, and augmented product. For the "core product" consider what core benefit that the product offers; for the "actual product" aim to ensure (for example, through branding) that potential customers purchase the product; and for the "augmented product" consider what additional non-tangible benefits that the product offers to the customer (for example, after sales service, warranties, and delivery). Among these elements, branding can be seen as one of the most important decisions a marketing manager needs to make, and the value of brands in the environment is phenomenal (Kotler et al., 2002). Brands can offer the power of instant sales, and can convey a message of confidence as well quality and reliability to their target market (Kotler et al., 2002). In other words, a brand can be used
10 as a tool by an organization to differentiate itself from competitors. The American Marketing Association (AMA) (1996) defines brand as a distinguished name, term, sign, and/or symbol intended to classify and differentiate the products (either goods or services) from different sellers and other competitors. Keller (2008) proposes that the main elements of brands include "brand names, URLs, logos, symbols, characters, spokespeople, slogans, jingles, packages, and signage" (Keller, p. 140). A brand can be perceived as conveying meaning beyond a product because of its many dimensions. Also, Keller (2008) proposes the crucial brand dimensions from six perspectives (for example, memorability, meaningfulness, likability, transferability, adaptability, and protectability). These brand dimensions can: enhance a marketer's or retailer's brand awareness; facilitate the formation of strong, favourable, and unique brand associations; or elicit positive brand judgements and feelings from consumers. The above section provided a brief introduction of the roles of product and brand in terms of their meanings, relevant elements, and implications in the marketplace. The following section provides a backdrop for the specific literature about national brands and private labels.
2.2.1 Branding in the Retail Context This section defines national brand and private label and introduces the roles and strategies of branding in the retail context. Specifically, it firstly provides the in-depth discussion of national brand and private label definitions and other various terms used for them. In addition, the retail strategies applied from the perspectives of national brands
11 and private labels were also discussed. The previous research studies and literature gaps were analyzed at the end of the section.
2.2.1.1 National Brand
A national brand can be defined as an entity that is marketed throughout a nation (AMA, 1996). A slightly richer definition is provided by Lewison and Balderson (1999) who incorporate consumer components beyond the product itself and state that "the national status of manufacturer labels creates the image of a better and more consistent quality and a 'sure thing' with little or no purchase risk" among consumers (Lewison & Balderson, p. 134).
National brands can be available through multiple channels/retailers and thus the nature of the distribution channel is one key component in defining the national brand (Dunn et al., 1986). In other words, a national brand refers to a nationally or internationally distributed product with multiple channels/retailers, which is perceived as having high quality and brand image in the marketplace. National brands are perceived as important in determining retailer profitability (Glynn, 2007), store image (Ailawadi & Keller, 2004), and other support factors such as advertising that benefits retailers (Glynn, 2009). Specifically, for retailer profitability, the financial benefits from selling the brand can be found in terms of sales volume. In addition, the strong reputation of national brands can translate into a stronger image for the retailer. By carrying national brands, retailers receive external channel support (for example, advertising) and this is one key factor for successful brands in the market (Leone et al., 2006), in addition to better
12 understanding of a firm's marketing mix as well as consumer attitudes and behaviour
(Keller, 2008).
In summary, this section explained why retailers carry national brands, and what benefits can be gained from carrying national brands.
2.2.1.2 Private Label
A private label refers to a product that is owned and/or licensed exclusively by retailers and/or suppliers for distribution in their relevant segments of the marketplace (Fitzell, 1992; Lewison & Balderson, 1999). Both this distinction of ownership and the exclusivity of distribution give the private label its identity (Fitzell, 1992, 1998). Hoch (1996) also pointed out that a private label can carry trademarks, which are either the retailer's own name or other names as offered by the retailer, or can be the trademarks offered by brokers or buying cooperatives.
The concept of private labels started with the Sainsbury house brand in the U.K. in 1869 (Méndez et al., 2008). The private label was initially created as a lower quality and lower priced brand (Apelbaum, Gerstner, & Naik, 2003) because of its inferior components. However, in today's marketplace, private label products can transmit high prices (ACNielsen, 2005) and better quality (Apelbaum et al., 2003).
The Private Label Manufacturers Association (PLMA) categorizes private label manufacturers under four main categories (www.plma.com): (1) large national brand manufacturers who utilize their expertise and excess plant capacity to supply private labels; (2) small, quality manufacturers who specialize in particular product lines and
13 concentrate on producing private labels almost exclusively; (3) major retailers and wholesalers who produce private label products from their own manufacturing facilities; and (4) regional brand manufacturers who produce private label products for specific markets. Thus, it is possible for the private labels to be produced by a retailer itself, or by a third manufacturer based on a retailer's specifications (Baltas, 1997).
The various terms used for private labels and the associated meanings as offered by various scholars (Dunn et al., 1986; de Cherntony, 1989; Canadian Tire Newsletter, 1994, Issue 4; Erdem, 1998; Méndez et al., 2008) are shown in Table 2.1.
Table 2.1 Various Terminologies for Private Labels Terminology References Associated Meanings
Private Brand Dunn et al. (1986) Various terms ending with "brand" or "label" but encompass the same Private Label Hoch (1986) meaning: owned and/or licensed exclusively by retailers and/or Own Brand de Cherntony (1989) suppliers for distribution in their relevant segments of the Exclusive Brand Méndez et al. (2008) marketplace Retailer's name is offered Store Brand Méndez et al. (2008) prominently on product packaging
Store Sub-brand Stanley (as cited in Low-key positioning of retailer's Velez, 2003, p. 17) name on the packaging
Umbrella Brand Erdem (1998), Stanley An independent or exclusive brand (as cited in Velez, of the retailer 2003, p. 17) Mendéz et al. (2008); Terminology first used in Sainsbury, House Brand Canadian Tire (1994) U.K.
14 The above table offers a number of interchangeable terms for private labels, such as private brand, private label, and exclusive brands. Differences in terminologies can also be based on the packaging and promotion strategies of retailers, such as the use of store sub-brand, individual brand, and umbrella brand (Stanley (as cited in Velez, 2003, p. 17)); Mendéz et al., 2008). The usage of different terms can also be attributed to a geographical-related distinction: for example, the term "house brand" was first used for Sainsbury in the U.K. (Méndez et al., 2008), whereas the term "store brand" is typically used in North America (Stanley (as cited in Velez, 2003, p. 17)).
In the retail context, a private label program has become an important contributor to the success of retailers, both in the short term as well as over time. For example, a low price strategy of private labels can attract more price-conscious consumers which results in increasing market share for retailers (Steiner, 2004; Pauwels & Srinivasan, 2004). In addition, although creating a new private label will include costs such as designing, sourcing, and marketing the private label line, it results in a stronger bargaining position with manufacturers due to the high sales revenue and market share (Narasimhan & Wilcox, 1998; Pauwels & Srinivasan, 2004). In some ways, retailers' private labels can be perceived as a crucial success factor for retailers.
The next section discusses the relative roles of national brands and private labels in the retail context.
2.2.1.3. Retail Strategies ofNational Brands and Private Labels There has been considerable debate regarding the relative contributions of national brands versus private labels for retailers. It has been proposed that emphasising 15 private labels is more profitable than emphasising national brands (Steiner, 2004). If the retailer's efforts in creating a brand succeed, manufacturers are sorely tempted to end the exclusivity and want to expand in the market. This will ultimately translate into larger market share for the retailer as well as a strong position for new price competition. In addition, it will create stronger consumer attraction and loyalty to a retailer (Steiner, 2004). Consequently, a more positive store image can be built to convert and attract some value-conscious shoppers (Bronnenberg & Wathieu, 1996; Pauwels & Srinivasan, 2004). The improved quality and reasonable price can also drive a better brand image and store loyalty (Raju et al., 1995; Quelch & Harding, 1996). On the other hand, Dunn et al. (1986) indicate that having a nationally distributed branded product of comparatively higher quality and price results in offering a stronger budget for advertising compared to a private label product.
Consider the experience of Loblaws, which is one of the largest Canadian grocery chains and a successful pioneer in the grocery market—it sells various national brands as well as its famous private label "President's Choice" (Kingston, 1994). Also, Wal-mart, the major U.S. discount store chain, carries both national brands and its own private labels (e.g., "Great Value"). This dual strategy has become very crucial in the last decade for retailers in influencing consumers regarding their store image and awareness (Ailawadi & Keller, 2004). Many scholars have examined the phenomenon of private labels and national brands in the retail market and some of this key research is introduced
in the next section.
16 2.2.1.4 Research Studies on National and Private Label Phenomena
There has been an increase in academic and managerial interest in the private label and national brand phenomena over the past decade (Ailawadi et al., 2001; Gabrielsen & Sorgard, 2007; Ganesan et al., 2009). With respect to academic studies, psychology scholars have examined these phenomena from the consumer perspective, such as consumer purchase behaviour of private labels as well as consumers' price consciousness and value consciousness (e.g., Dick et al., 1995; Richardson, 1997; Ailawadi et al., 2001). Business scholars have mainly examined the private label phenomenon from marketing perspectives, such as studying the effects of a private label's introduction on channel strategies and profits (e.g., Mills, 1995, 1999; Raju et al.,
1995).
Other studies have examined the determinants of private label success (Dhar and Hoch, 1997) and various elements and strategies related to private labels and national brands, such as quality (Mendéz et al., 2008), pricing (Luijten & Reijnders, 2009), advertising (Philip & Namwoon, 1997), shelf space management (Amrouche, Martin- Herrán, & Zaccour, 2008), and innovation (Steiner, 2004).
Many of these studies found that the key elements of the marketing—product quality, pricing, promotion and location—are relevant for retailers and quality, price, and advertising are elements that come together with the retailer's location in influencing consumer decision making. These elements are deemed as crucial in affecting further market share as well as long term success for retailers (Jacoby & Olson, 1977).
17 Most of the studies cited above examine retail strategies at one point in time rather than over time. For example, Steiner (2004) investigated the competitive strategies of national brands and private labels (in terms of price, shelf space, quality, innovation, and brand advertising elements), and offers a current overview (i.e., the emerging trends of shelf space management) rather than a rigorous examination of archival data from retailer's perspective over time.
The following section provides further review of competitive strategies between private labels and national brands within the context of the quality, price and advertising elements. The quality element consists of two components (subjective quality and objective quality) and the price element consists of objective price and perceived price (Jacoby & Olson, 1977; Zeithaml, 1988). Subjective quality is the consumer's evaluation of a product's overall excellence or superiority (Holbrook & Corfman, 1985; Zeithaml, 1988) and subjective price (or perceived price) is encoded by the consumer to be "cheap" or "expensive."
2.3 Crucial Marketing Elements
This section covers three crucial marketing elements in the retail context: objective quality, objective price and advertising.
2.3.1 Objective Quality Objective quality, also known as mechanistic quality (Jacoby & Olson, 1977; Holbrook & Corfman, 1985; Mendéz et al., 2008), is the actual product quality that can be measured by product characteristics using laboratory tests and control led-use
18 experiments (Apelbaum et al., 2003). For example, characteristics such as nutrition and chemical content could be evaluated for food or drug products (Consumer Reports, 2001); convenience of use, safety, and effectiveness could be measured for technical products (Mitra & Golder, 2006); and processing speed, hard disk capacity, and reliability features could be appraised for products such as DVDs (Méndez et al., 2008).
Historically, as noted, a private label was perceived as a low quality product alternative (Bellizzi, Kruecjeberg, Hamilton, & Martin, 1981) because of its inferior components. However, over the past two decades, many scholars have claimed that private label products with poor quality are disappearing (Fitzell, 1992; Bronnenberg & Wathieu, 1996; Quelch & Harding, 1996) or that private label quality has improved (Quelch & Harding; 1999; Apelbaum et al., 2003).
Some scholars determined that, on average, the quality of private labels was closer to but still not quite equal to that of national brands. For example, Hoch and Banerji (1993) studied 210 grocery categories where 32 quality assurance managers from various supermarket chains and grocery wholesalers rated both private labels and national brands. Based on components such as nutrition and packaging, national brands scored a rating of 5 out of 5, while the best private labels averaged a score of 4.6, indicating that "best private labels" at that time still had somewhat lower quality than national brands. A more recent study by Choi and Coughlan (2006) found that a high quality private label will be positioned closer to a stronger national brand, whereas a low quality private label will be positioned closer to a weaker national brand. Therefore, the quality gap or differentiation between private labels and national brands still exists.
19 Other researchers, however, claim that retailers developed premium priced private labels that were positioned not only closer to the high quality of national brands (Quelch & Harding, 1996; Apelbaum et al., 2003; Méndez et al., 2008), but even superior to those brands (Dunne & Narasimhan, 1999). Retailers have realized that many consumers have the willingness and the ability to pay for higher quality alternatives, and these retailers intended to capture a market share from those consumers (ACNielsen, 2005). For example, back in the 1980s, the Canadian grocery retailer Loblaws had an external consulting company (The Watt Design Group) redesign its private label from a no brand product to a "President's Choice" brand (Teich & Zittell, 1998). The result for Loblaws was a premium private brand with superior quality (Teich & Zittell, 1998). Through this exercise, Dave Nichol, the President of Loblaws, the public face of the grocery chain in Canada, turned himself into a household name in Canada (Kingston, 1994). Through the President's Choice line, "he had democratized 'gourmet' food, bringing extra virgin olive oil, 'decadent' chocolate chip cookies, balsamic vinegar, environmentally friendly coffee filters, and decaffeinated Swiss water-processed coffee to the supermarket and to the Canadian middle class" (Kingston, 1994, p. 3), which all represent quality private labels.
The increasing role of private label manufacturers can be linked to retailers' desire for quality. Some retailers have invested in their own internal quality control departments (Senker, 1989) or in processes to improve actual quality (Teich & Zittell, 1998). Along with some large R&D groups, higher quality standards have been imposed by powerful retailers, such as Loblaws (Dunne & Narasimhan, 1999). Apelbaum et al. (2003) indicated that "the desire of retailers to offer consistent product quality, and the increased cooperation between manufacturers and retailers to develop private labels that 20 match consumer tastes have resulted in high quality products" (Apelbaum et al., p. 154). One can also assume that when private labels are produced by the same manufacturers who produce regional or national brands, there will be little difference between materials or production, packaging, storage, and distribution procedures (Baltas, 1997; www.plma.com). Thus, similar quality can be expected between national brands and private labels. Overall, this will result in better profitability for both manufacturers and retailers due to the high sales revenue from private labels.
Having more quality private label products introduced into the market leads to smaller quality gaps between national brands and private labels. However, it is also proposed that due to competition, some quality differences exist among various national brands and private labels to satisfy heterogeneous preferences of consumers and their desire for variety (Ailawadi & Keller, 2004; Bèrges-Sennou, Bontems, & Rèquillart, 2004). This type of product and brand strategy can also potentially increase the marketing and financial performance of both private labels and national brands (Grewal & Levy, 2007; Morgan & Rego, 2009).
2.3.2 Objective Price Objective price is understood as the indication of the actual price of a product, which is frequently not the price encoded by consumers. For example, the actual $3.99 price is the objective price of a 12-pack of Coca Cola. The objective price decides the actual positioning of the product (Méndez et al., 2008). The "price" mentioned in the following section refers to this "objective price."
21 A private label was historically a lower-priced alternative to a national brand (Bellizzi et al., 1981) because of its relatively low quality and low cost (Dunne & Narasimhan, 1999). Retailers of private labels could offer private labels at a cheaper price due to lower costs; for example, they would not have to pay for slotting fees (fees charged by retailers for product companies and manufacturers to place the product on the shelves) (Fitzell, 1998; Lewison & Balderson, 1999) and thus can offer private labels as a lower-priced alternative. These private labels are suitable for consumers who tend to be extremely price conscious. In other words, private label categories are for the "less wealthy" such as elderly and younger demographic groups (Omar, 1996; Dhar and Hoch, 1997; Velez, 2003). These consumers are mainly aware of the benefit and value relative to the low cost that is incurred for private labels (Burton, Lichtenstein, Netemeyer, &
Garretson, 1998).
In contrast, national brands have historically seen a growth in size and importance compared to private labels (Middleton, 1996). National brands tended to have better quality and were more expensive than private labels, because they were more costly to produce and distribute in the marketplace. Manufacturers of national brands also needed to spend heavily on national advertising to attract consumer interest, and needed to pay substantial slotting fees to retailers just to place the product on shelves (Dunne & Narasimhan, 1999). These factors in turn translated into higher priced products.
However, over time, the price gap between private labels and corresponding national brands decreased as there was a gradual increase in private label prices in relation to national brands (Raju et al., 1995; Steiner, 2004). This price increase was due
22 to the improved quality of private labels (Fitzell, 1992; Bronnenberg and Wathieu, 1996; Quelch & Harding, 1996). In some cases, the private label product's price was even higher than the national brand (Quelch & Harding, 1996; Apelbaum et al., 2003). For example, the President's Choice brand (Loblaws' private label program) has superior quality products (for example, olive oil) compared to some national brands (Dunne & Narasimhan, 1999). With a high product quality, it is deemed appropriate to set a higher price than for the national brands.
A smaller price gap between private labels and national brands may also exist in price-insensitive categories (for example, canned vegetables), where the demand for private labels is high (Raju et al., 1995). Chintagunta, Bonfrer, and Song (2002) found a decrease in price gap for national brands relative to private labels with the introduction of private labels in the breakfast cereal market. Bonfrer and Chintagunta (2004) carried out an empirical study using sales and panel data on 104 categories for five competing retailers in measuring brand loyalty, store loyalty and private label purchase, and found some evidence that the entry of private labels resulted in a lower price gap between national brands and private labels.
The influence of the price gap between national brands and private labels upon private label market share has been discussed in the literature. Research findings indicate that price differentiation can result in both high and low private label market shares. For example, Connor & Peterson (1992), Dhar and Hoch (1997) as well as Cotterill, Putsis and Dhar (2000) found that a greater price differential between national brands and private labels (with private labels at the lower end) resulted in a higher market share for
23 the private label. With a greater price differential, consumers have a greater incentive to switch brands (Méndez et al., 2008). Thus, a direct correlation between price difference and market share of private labels has been proposed (Cunningham, Andrew, & Giovanna, 1982). In contrast, Dhar and Hoch (1997) and Raju et al. (1995) found that greater price differences can result in a lower private label market share; in other words, little correlation existed between price difference and market share of private labels. It is possible that higher priced national brands indicated better quality, thus making low priced private labels less attractive and decreasing private label market share (Raju et al., 1995).
Overall, higher priced private labels could be found in the marketplace (Quelch & Harding, 1996; Apelbaum et al., 2003). In other words, the objective price differentiation between national brands and private labels was decreasing in many instances. However, Raju et al. (1995) as well as Ward, Shimshack, Perloff and Harris (2002) suggest that price difference between private labels and national brands was related to the nature of product categories or market competition. Bontemps, Orozce and Réquillart (2008) also found greater price differences in the development of private labels for second-tier national brands (less expensive with lower objective quality national brands) than for leading national brands. Indications of both greater and smaller price gaps between private labels and national brands, which were dependent upon product category and market situations, can also be found in the literature (e.g., Raju et al., 1995; Dhar & Hoch, 1997; Sayman & Raju, 2004). Thus, higher priced private labels relative to national brands exist in the marketplace for some product categories and smaller price gaps are associated with them; thus, it is suggested that price gaps that exist between private labels 24 and national brands are dependent upon the product category. Overall, these various strategies can help satisfy variety seeking by consumers and can lead to increases in the marketing and financial performance of businesses (Ailawadi & Keller, 2004; Morgan & Rego, 2009).
2.3.3 Advertising Advertising is one of the most utilized tools to build brands through establishing positive brand associations and strengthening consumer loyalty (Simon & Sullivan, 1993; Yoo, Donthu, & Lee, 2000). Advertising is also "a mechanism used to distinguish and create market power by relaxing price competition" (Tiróle, 1990, p. 278). As a communication message, advertising includes elements such as product name, quality, and service information that could potentially attract consumers. Advertising also can increase brand loyalty and it is an important component to reach the highest performance for retailers (Ailawadi, Harlam, César, & Trounce, 2006).
Since private labels have been in the market place for some time and have built a stronger identity, the competition between national brands and private labels has become more intense, as has the advertising element for these products (Dhar & Hoch, 1997). Dunn et al. (1986) stated that usually manufacturers of national brands have large expenditures for advertising and they also have to offer retailers substantial fees to generate in-store promotions. However, there are also certain product categories where manufacturers of national brands limit their spending on advertising (Rao, 1991). Examples are some price-insensitive categories (for example, canned vegetables) where private labels have larger sales volumes, market share, strong margins and perceived as
25 product categories not worthy of strong advertising by manufacturers of national brands (Dunn et al., 1986; Raju et al., 1995). However, national brands' manufacturers have also started to emphasize on advertising when competing with high-quality private labels and their goal is to be competitive, to gain a higher sales volume and market share in these categories (Philip & Namwoon, 1997).
On the other hand, the size and intensity of private label advertising expenditure is usually related to the intentions of companies/retailers to increase store loyalty (Bell, Davies, & Howard, 1997). It is also true that a retailer's advertising expenditure for private labels is related to the size of the manufacturer or producer of the private labels; for example, a low advertising expenditure is typical for retailers with mid-sized manufacturers of private labels (Bell et al., 1997; Gomez & Benito, 2005). Retailers have also incurred considerable advertising costs for private labels in order to increase brand value and charge higher prices (Amrouche et al., 2008).
Private label retailers have used advertising and sales promotion tactics such as coupons, rebates, bonus packs in the market place (Kelley & Jugenheimer, 2004). Along with increased promotion, new distribution channels and better outlet appearances, retailers can improve brand value, goodwill, or customer value; all of these elements help to build up private label brand equity. On the other hand, national brands have increasingly used media such as magazines, television, and Internet websites because of their national coverage (Wall Street Journal, May 9, 2007). Kelley and Jugenheimer (2004) offer a comparison of many different media types, such as TV commercials, radio commercials, Internet advertising, outdoor advertising and transit advertising, each with
26 its own preparation time, cost, life style, and flexibility in format (see Table 2.2). Selecting the appropriate media is extremely important to marketers of national brands and private labels, because it is the one of the most important keys to create the brand awareness, to increase the customer interest, and to boost the market sales.
Table 2.2 Comparison of Media Type Characteristics
Flexibility in Audience Preparation Cost Frequency Time Life Style Format Level Media Type Short Long Low High Short Long Low High Low High Low High
TV Commercial
Radio Commercial
Internet Advertising
Direct Mail (e.g., flyer)
Newspaper
Magazine
Outdoor Advertising
Transit Advertising Source: Kelley & J ugenheimer, 2004, p. 01-109.
In summary, the literature indicates that the advertising expenditure for private labels and national brands will be different due to different sizes of manufacturers and retailers, as well as the nature of different product categories (Bell et al., 1997; Gomez & Benito, 2005). In addition, due to the characteristics of media types in terms of cost, 27 flexibility, and coverage, different media are typically selected to promote national brands and private labels (Kelley & Jugenheimer, 2004).
2.3.4 Marketing Elements Summary Overall, the above sections provide an overview of strategies relating to the marketing elements of objective quality, objective price, and advertising within the context of national brands and private labels. Investigating how these strategic elements were applied to private labels and national brands within a certain time period by a retailer can offer deeper insights into brand specific retail success factors. In the following section, the gaps and limitations of existing research in this area are discussed. In addition, research propositions for further investigation are offered.
2.4 Research Gaps, Propositions and Research Model To date, many of the studies investigating retail success factors have examined competitive strategies of national brands and private labels (Middleton, 1996; Steiner, 2004). A review of the literature has indicated the importance of studying these competitive strategies and has also identified many studies within the context of grocery retailers of food and non-food products (for example, Makoto, 1995; Hoch, 1996; Garretson et al., 2002; Méndez et al., 2008). However, few studies were found in the context of hard goods retailers, and thus warranted further examination. In addition, only a few studies to date (Miller & Merrilees, 2000, 2004; Miller, 2006b) utilized a historical perspective and conducted in-depth analysis of one retail context. Furthermore, the identified marketing elements of quality, price, and advertising have received limited attention. Thus, this study focuses within the context of competitive strategies of national 28 brands and private labels of a hard goods retailer over a certain time period. The following section offers rationales for examining the three proposed marketing elements: objective price, objective quality and advertising.
2.4.1 Objective Quality Existing studies have offered that, in general, premium private labels (for example, Presidents' Choice) are quite different in quality from traditional private labels, and provide profitable opportunities for manufacturers and retailers (Apelbaum et al., 2003, Choi & Coughlan, 2006; Méndez et al., 2008). For example, Méndez et al. (2008) found some differences between the objective quality of private labels and national brands in food, drink, personal hygiene and home cleaning product categories. Over the past two decades, many scholars have claimed that private label products have improved product quality (Fitzell, 1992; Bronnenberg & Wathieu, 1996; Quelch & Harding, 1996; Apelbaum et al., 2003). The roles played by national brands and private labels as an indicator of retail success have been well examined in retail settings for perishable goods, but there is still a need to study if a similar phenomenon exists in other retail contexts or in different product categories. It is also crucial to offer in-depth understanding of the quality differentiation between private labels and national brands, and to determine whether it is different between product categories and to what extent. Based on the understanding drawn from the literature, the following propositions are offered.
Proposition 1 (a): (a) The objective quality ofprivate labels increases over time. Proposition 1 (a): The objective quality differentiation between private labels and national brands is product dependent. 29 Furthermore, based on the understanding drawn from the objective quality literature, and in an effort to better understand the competitive strategies between private labels and national brands, questions could also be raised in terms of "Why would retailers make this improvement?" and "What kind of benefits could retailers gain from this improvement?"
2.4.2 Objective Price A review of the literature has also indicated that high prices of private labels can be found in the marketplace (Quelch & Harding, 1996; Apelbaum et al., 2003). In general, price differentials exist between private labels and national brands, and there are differences between product categories (Raju et al, 1995; Quelch & Harding, 1996; Ward et al., 2002; Apelbaum et al., 2003). Even though this was strongly indicated within the context of grocery products (for example, perishable food such as canned vegetables, non-food items from hygiene, drugstore and cleaning products), there is a need to study if similar phenomena exist in other retail contexts. Based on the understanding drawn from the literature, the following propositions are offered.
Proposition 2 (a): The private label price increases over time. Proposition 2 (b): The objective price differentiation between private labels and national brands has decreased over time.
Proposition 2 (c): The objective price differentiation between private labels and national brands over time is product dependent.
30 In an effort to better understand competitive strategies between private labels and national brands within the context of objective price, additional questions such as "Why would retailers do this?" and "What kind of benefits could retailers gain from this price strategy?" could also be raised.
2.4.3 Advertising A review of the literature has indicated that strategic elements of advertising are different for national brands and private labels (Dunn et al., 1986; Rao, 1991; Dhar & Hoch, 1997). Specifically, the literature reviewed indicated that advertising expenditures of private labels and national brands will be different due to different sizes of manufacturers and retailers, as well as the nature of different product categories (Bell et al., 1997; Gomez & Benito, 2005). Furthermore, media types have their own preparation time, cost, life style, and flexibility in format (Kelley & Jugenheimer, 2004), which may result in the use of different or similar media for private labels and national brands within the context of one retailer who carries both product types in its domain. A retailer may focus on national brands due to their long standing exposure in the marketplace, but may also focus on private labels to promote their awareness and competitive advantage. However, no previous study was found that focused on an in-depth examination of advertising elements such as the frequency and usage of various media types (for example, flyer or catalogue advertising) for national brands and private labels. Based on the understanding drawn from the literature, the following propositions are offered.
Proposition 3: Private label products represent a greater volume and a higherfrequency ofadvertising in comparison to national brand advertising over time.
31 Questions could also be raised in terms of "Why would retailers use this type of media?" and "What kind of benefits could retailers gain from a particular media type?" Understanding in these areas could lead to better competitive strategies between private labels and national brands within the context of objective price.
2.4.4 Framework of the Study It is proposed that in order to address the research propositions, there is a need to conduct a case study of a retailer who carries both private labels and national brands and examine its retail success factors over time. The propositions offered can be seen within the general conceptual model (see figure 2.1) proposed as examining the differentiation of objective quality, objective price, and advertising strategies with respect to private labels and national brands within the context of a retailer over time.
Figure 2.1 offers the research context and research framework, for one specific retailer of this study. This figure presents the context of the market place that includes manufacturers/suppliers, retailers and consumers. The square dot arrows represent the movement (or distribution) of private labels (from third party manufacturers/suppliers and/or retailer's own manufacturing facilities) to one retail facility (in this study to be referred to as CTC). The solid arrows indicate the movement (or distribution) of national brands (from their manufacturers/suppliers) to one retail facility (in this study to be referred to as CTC). This retail facility (for duration 1991-2001) is the focus of this study, that is, a unit of analysis for this study within the marketplace where consumers will purchase the products/services from this specific retailer (refer to as CTC) or other organizations (the long dash dot arrow). This study examines the retail success factors,
32 specifically the similarities and differences between objective quality, objective price, and advertising strategies of private labels and national brands over a specific time as offered by this particular retailer. It is to be noted that this market place also contains other retailers (organizations) in competition but not illustrated in this figure.
A review of the literature has indicated that there is limited retailing research particularly from a retailer's perspective (Garretson et al., 2002; Méndez et al., 2008). Thus, a case study of one retailer was conducted. The context is a hard goods retailer in Canada. Most prior studies have focused on grocery retailers, thus indicating a need to study beyond this context (for example, Makoto, 1995; Hoch, 1996; Garretson et al., 2002; Méndez et al., 2008). It would be interesting to find out if general merchandise retailers have similar success factors as grocery retailers, particularly regarding quality, price and advertising elements between private label and national brand strategies.
Furthermore, there is a need to utilize primary sources such as archival materials and documentation of individual stores, which will help in the examination of patterns of retailing strategies and history over time. Savitt (1989) indicates that the history of American retailing, for example, assembled from journalistic sources, is often viewed as the primary source in understanding what retailing was like in past years (Savitt, p. 377). A study by Miller (2006a) also offered the benefits of going beyond one point in time and achieving a better understanding by observing subsequent occurrences. The longitudinal nature of archival materials also adds value for marketing studies (Miller, 2006a). Therefore, a historical research study, using archival materials of one retailer is proposed in the following methodology section.
33 Figure 2.1 General Research Framework
Marketplace Retailer ContexUlâ^It0 2001) Objective Price
Advertising Objective Quality
Private National Brands Labels
National Brand
Private Label
34 CHAPTER 3: METHODOLOGY The research methodology chapter is divided into four main sections. The first section introduces the research design, which includes an overview of the case study method and an introduction to the specific case unit, namely Canadian Tire. The second section focuses on the data sets: four archival data sets including annual reports, catalogues, newsletters, and newspaper and magazine articles of Canadian Tire are presented. Content analysis, the main data analysis method adopted in this research, is offered in the next section. And finally, the last section discusses some qualitative research criteria used in the study.
3.1 Research Design A qualitative historical approach was adopted to acquire an understanding of price, quality and advertising strategies of private and national brands from a retailer's perspective over time. A case study methodology was applied and the unit of analysis was a Canadian retailer.
3.1.1 An Overview of the Case Study The case study approach is a research strategy that focuses on "understanding the dynamics present within single settings" (Eisenhardt, 1989, p. 534), and "an empirical inquiry that investigates a contemporary phenomenon within its real-life context" (Yin, 1984, p. 1). Case studies can investigate a single case or multiple cases with either single or numerous levels of analysis (Yin, 1984). In this study, strategies regarding national brands and private labels of Canadian Tire, within the context of a single case, were
35 examined. In addition, case studies can be used to accomplish various objectives, for example, to provide description, to test theory, or to generate theory (Eisenhardt, 1989). McKenzie and Merrilees (2008) also mentioned that "a case study provides a way to both integrate the theoretical foundations of the internationalization process, with management perspectives for such actions" (p. 310). In this study, the aim was to provide a historical portrayal of one retailer's marketing strategy management regarding objective quality, objective price, and advertising in the marketplace.
According to Eisenhardt (1989) and Stake (1995), case selection should be typical or representative. Canadian Tire is a major general merchandise and successful retailer in Canada (Merrilees, 2005) and was selected as the unit of analysis for this study. Canadian Tire offers a unique mix of automotive, home, and leisure product categories through its automotive, home, and leisure divisions. The archival collections of Canadian Tire are housed at the University of Western Ontario (Canada) and offer longitudinal information that is seen as a good base for this study. Compared to studying multiple retailers, the focus on one retailer with multiple private label programs during the same period should provide more consistent in-depth understanding of marketing strategies of private labels and national brands from a retailer's perspective.
3.1.2 Unit of Analysis - Canadian Tire Canadian Tire Corporation (referred to here as Canadian Tire or CTC), was established in September 1922, and is currently a multi-divisional organization engaged in general merchandise, auto parts, clothing, petroleum, and financial services
36 (www.canadiantire.ca). CTC is a valuable Canadian brand of a Canadian family of retail, retail related and financial services businesses (www.canadiantire.ca).
The largest division, Canadian Tire Retail, is Canada's leading merchandise retailer who is mainly selling hard goods (www.canadiantire.ca). Through its Associate Dealer network, CTC operates about 500 retail locations across Canada, selling a unique product and services mix of automotive, sports, home accessory, and leisure products. The retail locations carry an extensive mix of national brand and private label (referred to as "in-house" brand) products. The Canadian Tire retailer offers various private labels such as "Mastercraft" and "Motomaster" brands (www.canadiantire.ca) and is seen as a successful retailer in Canada (Merrilees, 2005). As a major general/mass merchandiser, Canadian Tire has numerous competitors in the marketplace, such as Wal-mart, Zellers, Home Depot, and Sears (Merrilees, 2005). See Appendix 1 for the detailed retailer description for Canadian Tire's main competitors.
3.1.3 Archival Study Archival data on Canadian Tire was examined in this study. This archival study follows the ten principles, from archival material selection to data collection and data integrity, as proposed by Miller (2006a). First, the research areas and research questions were identified. Next, valid reasons for using archival research, understanding how to select appropriate archives, and understanding which materials to use were explored. This resulted in identifying and selecting materials appropriate for this study. Then, access to appropriate archives was gained, and data collection was performed. During the data collection stage, a relationship with the archivist was built and maintained. Data mining
37 of the archives was conducted. Steps were also taken to meet the criteria of archival data integrity and ethical issues. The following sections offer details of data collection and data analysis conducted for this study.
3.2 Data Collection
The archival data from the 1991 to 2001 period was the focus of this study, and represented a period of intense competition for Canadian Tire with other strong players in the market, such as Wal-mart, Zellers, Sears, and Home Depot. For example, the world's largest retailer, Wal-mart, purchased the Woolco chain as its entry into the Canadian retail industry in the spring of 1994 (Chain Store Age, 1996). Canadian Tire returned to its roots to focus on consumers during the 1990s, and also redesigned their store format starting in 1997 (McBride & Craig, 1997). As well, in 1998, Zellers acquired Kmart Canada, and other general merchandise retailers such as Sears and Home Depot offered strong competition to Canadian Tire (Merrilees, 2005). As noted, the archival data for the Canadian Tire case study was derived from a variety of archival data sources, and included promotional materials (CTC catalogues), internal correspondence material (CTC newsletters), CTC published annual reports, and published articles from newspapers, business journals, and trade magazines. The archival collections housed at the University of Western Ontario (Canada) had to be reviewed in the collection house (library). For the period under investigation, the Archives and Research Collections Center offers most of the needed CTC archival data (Canadian Tire Corporation Heritage Collection). However, some external materials such as articles in newspapers, business journals, and trade magazines were accessed
38 through from the Internet library resources of the University of Guelph (Canada). The following section offers the description of selected materials for this current study. In particular, the first three data sets included internal materials of newsletters, catalogues, and annual reports, whereas the last data set included external materials of published articles in newspapers, business journals, and trade magazines. Newsletters: The newsletter is an internal communication material for the employees of Canadian Tire. It is Canadian Tire's publication about business, news, and events for the people who work for the store. It was originally a bi-monthly publication titled "Traction." However, after 1994, it was renamed "CTV" (Customer Total Value), and involved news and views for the staff of Canadian Tire. These publications were issued in English and French (Canadian Tire Newsletter, 1992). However, only the English version newsletters were used in this study. Catalogues: Product catalogues were created and distributed by Canadian Tire (The Canadian Tire heritage collection), and issued in English and French language versions. Annual (see Appendix 2 for example) or seasonal (see Appendix 3 for example) catalogues were distributed throughout the country to accommodate consumer need, variations in pricing, and product availability. Annual catalogues from 1991 to 2001 and seasonal/bi-seasonal catalogues from 1991 to 1994 were available in the archival center. The following table provides additional information for each catalogue examined in this study.
39 Table 3.1: Additional Information of CTC Catalogues (1991 to 2001 period) Year Type of Total Page Type of Catalogue Total Page Catalogue Numbers Numbers 1991 Annual 21; Spring 39 1992 Annual 243 Spring and Summer 87 1993 Annual 247 Spring and Summer 99 1994 Annual 255 Spring and Summer 107 1995 Annual 299 1996 Annual 311 1997 Annual 319 1998 Annual 363 1999 Annual 385 2000 Annual 435 2001 Annual 438 Source: CTC Spring Catalogue, 991; CTC Spring & Summer Catalogue, 1992- 1994; CTC Annual Catalogue, 1991-2001
Annual Reports: As a publically traded company, the annual reports of Canadian Tire consisted of published comprehensive reports on company activities throughout the preceding year. Annual reports were required to give shareholders and other interested persons information about Canadian Tire's activities and financial performance (The Canadian Tire heritage collection). Published articles: Published articles in newspapers, business journals, and trade magazines related to Canadian Tire available in the archival collection consisted of both Canadian Tire advertising and articles propagandizing related information (The Canadian Tire heritage collection). Local and nationally based newspapers are available on microfilm and some can also be found through the Internet libraries of most universities (The Canadian Tire heritage collection). In the current study, published articles included articles from newspapers (for example, The Globe and Mail), business journals (for example, DSN Retailing Today), and trade magazines (for example, Chain Store Age)
40 related to the unit of analysis - Canadian Tire.
3.2.1 Product Selection Archival materials relating to CTC, with a strong focus on three selected product categories—tires, lawn mowers, and bicycles—were examined in this study. This selection represents one product category each from the three main divisions (www.canadiantire.com) of Canadian Tire: tires from the automotive division, a lawn mower from the home division, and a bicycle from the leisure product division. In addition, Canadian Tire carried both private labels and national brands of these product categories, which fits the research context of current study.
Within the tire product category, this study focused on the specific tire product, "205/70R14 93S" tires. Included were private label tires of various Motomaster series, Predator Radial GTS, and national brand tires of various Goodyear series, BFGoodrich series, as well as Michelin XH4 (see Appendix 4 for the tire products: list of private labels/national brands and detailed product/quality descriptions). Within the bicycle product category, this study focused on one specific bicycle, the "18-speed mountain bike." Included were private labels of different Supercycle series and national brands of various CCM series (see Appendix 5 for the bicycle products: list of private labels/national brands and detailed product/quality descriptions). Within the lawn mower product category, this study focused on the specific lawn mower, "gas lawn mower." Included were private labels of Mastercraft and Yardworks series, and national brands of Yard Machines-MTD and Lawn-boy series (see Appendix 6 for the lawn mower products: list of private labels/national brands and detailed product/quality descriptions). These
41 specific products (tire P205/70R14 93S, 18-speed mountain bicycle, and gas lawn mowers) are perceived as common within their product categories, had both private labels and national brands available during the study period, and offered sufficient data to conduct an archival study. These were selected for this study due to the following rationales. First of all, these three product categories were selected from each of the three main divisions of CTC. Secondly, specific products were perceived as common (for example: P205/70R14 93S tire size and 18-speed mountain bicycle) within their product categories. Thirdly, there exists sufficient data to examine these specific products over time regarding CTC strategies of their private labels as well as to compare CTC strategies between national brands and CTC private labels.
Relevant data relating to these product categories and specific products for both private labels and national brands were included in this study. Archival data were examined and portrayed in relevant comparative forms of verbal descriptions, and frequency counts (for example, numbers and percentages) to help conduct content analysis for this study. Charts and graphs were used to present the findings.
3.3 Data Analysis Data analysis conducted in this study used content analysis. Content analysis is identified as "any methodological measurement applied to text (or other symbolic materials) for social science purpose" (Shapiro & Markoff, 1997, p. 14). Moreover, it is defined as "a carefully, detailed, systematic examination and interpretation of a particular body of material in an effort to identify patterns, themes, biases, and meanings" (Berg, 2006, p. 303). Content analysis is primarily a qualitative methodology, but it can also 42 include a quantitative (numerical) component, which provides an advantage over other more purely qualitative methods (Duriau, Reger, & Pfarrer, 2007). However, in terms of the quantitative component, content analysis is suggested to be limited to counts of textual elements (Berg, 2006). In other words, the implication is that content analysis is more reductionist and ostensively a more positivistic approach. More specifically, in this study, the focus of the content analysis was over a 10 year period of CTC within the three product categories specifically for tire P205/70R14 93S, 18-speed mountain bicycle and gas lawn mower. All detailed information of quantitative (numerical) components including product price and pages of advertising, and qualitative components including content analysis procedure of textual quality descriptions of different product categories and specific products over time, was recorded in an Excel file. In particular, the examples of total advertising pages such as 0.45 page, 0.34 page, and 0.8 page are presented in Appendix 7. Content analysis was applied at the end. For example, different prices of private labels and/or national brands were sorted and compared. Index (average) prices were also calculated and examined in this study. The quality descriptions of various components of these products and brands were also examined and comparative analysis was made on similarities and differences between strategies (objective quality element) for private labels and/or national brands. Similarly, comparative analysis on the advertising element was conducted. Specifically, the pages of advertising of both private labels and national brands for the three products were counted, sorted, and compared in an Excel file. In addition, the product descriptions (mainly from CTC catalogues over time) were also sorted in an Excel file. And the objective quality components were
43 distinguished and compared by using content analysis. In the end, all results of content analysis of archival data came mainly from CTC catalogues over time and were also supplemented with supporting evidence from other data sources such as CTC annual reports, CTC newsletters, and published articles from newspapers and trade magazines.
3.4 Qualitative Research Criteria The following section discusses five qualitative research criteria, namely credibility, dependability, confirmability, archival data integrity, and ethical issue.
Credibility: Lincoln and Guba (1985) state "to demonstrate truth value the (researcher) must show that she/he has represented those multiple realities adequately ... that the reconstruction that has been arrived at via the inquiry are credible to the constructors of the original multiple realities" (p. 296). To fulfill this criterion in this study, feedback was solicited from an academic expert specializing in archival study, as well as an archivist who was familiar with all Canadian Tire archival data.
Dependability: Hirschman (1986) defined dependability as the "instruments" whose internal consistency and temporal stability are being assessed by the human beings—the researchers themselves. One solution example would use multiple human instruments or investigators. In this study, the dependability criterion is reached by utilizing multiple data sources. Specifically, archival internal data (for example, CTC catalogues and newsletters) and external data (for example, newspaper articles from The Globe and Mail and business journal articles from DSN Retailing Today) are both used in this study. By combining several archival lines of sight, a better, more substantive picture of reality and richer context was reached in current study (Berg, 2006). 44 Confìrmability: Confirmability is defined as "expected to be supportable from the data as gathered by the inquirer, to represent a logical set of conclusions given the reasoning he or she employed during the interaction, and to be a nonprejudiced, nonjudgmental rendering of the observed reality" (Hirschman, 1986, p. 246). During the data collection stage, procedure details were recorded (such as the data collection process) and all data were properly organized (for example, archival data in the forms of photos, excel data sheets, and charts) in order for the third party (for example, auditors) to review the rigorous nature of this stage. Thus, the confirmability criteria (Hirschman, 1986) were reached for this study.
Archival Data Integrity: Data integrity indicates the specific systems developed from a thorough grounding in research methods and are used for understanding of the literature in the area of the research question (Miller, 2006a). Thus, a researcher's interpretations of the findings may depend on the validity of the data collection methods and analyses. In order to achieve greater data integrity, Miller (2006a) proposed that various types of data collection and analysis require different considerations. In this study, multiple sources of archival materials were reviewed (for example, annual reports and catalogues) and data triangulation (for example, internal information from CTC, external voice(s) of newspaper or journal articles, and voices of shareholders from CTC annual reports) was applied to improve the data integrity. This data triangulation is aimed to improve the data integrity. Ethical Issues: All social scientists' studies need to have an ethical obligation or extensive guidance to their colleagues, human research committee, and/or study population to a greater extent rather than the average citizen (Hirschman, 1986). For this 45 study, archival data collections were available and approved researchers at the University of Western Ontario and it was not necessary to seek permission from Canadian Tire to access the data sets. Furthermore, the data collection procedure followed the general rules of the Archives and Research Collections Centre at the University of Western Ontario.
In conclusion, qualitative research includes criteria such as transferability, which is concerned not with the generalizability of a particular finding, but rather with the transferability of one manifestation of a phenomenon to a second manifestation of the phenomenon (Hirschman, 1986). One positional solution that may apply for this study is to compare the finding results constructed by other retailers such as Sears. However, due to the time limitation, transferability could not be assessed in the current study.
46 CHAPTER 4: RESEARCH FINDINGS This findings chapter is divided into four main sections. The first section offers an overview of the performance, business context, and retail strategies of Canadian Tire during 1991 to 2001, the period of this study. The following sections focus on findings related to the objective quality, objective price, and advertising elements within the context of this retailer's private labels and national brands for the selected period.
4.1 Overview
During 1991 to 2001, Canadian Tire (CTC) expanded and increased its gross operating revenues, net earnings of shares, associate store locations, and corporate divisions such as financial service. These corporation operation or expansion overview are discussed briefly in Appendix 8. The following sections provide contextual background and business strategies of CTC reviewed under two sub-periods, 1991 to
1995 and 1996 to 2001.
4.1.1 Preparation for Demanding Consumers, Economic Downturn, and Competition from the U.S. (1991-1995) In the early 1990s, the retail industry in Canada was faced with a new set of challenges, mainly from new U.S. competitors, more demanding and better-educated consumers, and the economic downturn (Annual Report, 1991; CTC Newsletter, 1992, Issue 1; Chain Store Age, 1996; McBride & Craig, 1997).
Firstly, the Canada/U.S. Free Trade Agreement was signed in 1991 and Dean Groussman, the president of Canadian Tire Corporation from 1985 to 1992, predicted that 47 the company could expect some strong competition from American retailers in the years ahead (Annual Report, 1991). In March 1994, the world's largest retailer, Wal-mart, purchased the Woolco chain as its entry into the Canadian retail industry. Wal-mart proceeded to renovate, refixture, remerchandise, and retrain staff at 122 Canadian Woolco stores in seven months (Chain Store Age, 1996). And in 1995, in its first full year of operations, Wal-mart made a huge impact on Canadian general merchandise retailing (Chain Store Age, 1996). Specifically, the major competitive effect was to take over market shares from all other Canadian retailers. Therefore, this was an extremely difficult period for retailers such as Canadian Tire. Canadian Tire's dominant market share position was threatened, and the company was forced to re-examine their operations (CTC Newsletter, 1992, Issue 1).
Secondly, the rapid change in the marketplace, particularly the increase in demanding and better-educated consumers, was another challenge that retailers had to face at this time (McBride & Craig, 1997). All retailers in Canada were facing challenges from consumers who were looking for more shopping options such as a wider assortment, lower prices, and convenient locations (CTC Newsletter, 1992, Issue 1). More demand power also existed in that Canadians were interested in better equipping their homes for comfort and entertaining (CTC Newsletter, 1992, Issue 1).
Thirdly, the recession that began in the early 1990s was a significant challenge. In 1989 and 1990, the Canadian economy followed the U.S. economy into a rapid tailspin and the worst recession since the 1930s (McBride & Craig, 1997). All retailers in Canada
48 were affected by this economic downturn, which also resulted in high unemployment levels.
During this difficult time, and to begin preparing for the increased competition, Canadian Tire developed and implemented an aggressive five-year business plan in the beginning 1992. Their strategy included: re-focusing the merchandising mix; enhancing in-store customer service; developing enterprise-wide innovative marketing approaches; instituting responsive/flexible pricing mechanisms; and enhancing cost competitiveness to become a low-cost operator (CTC Newsletter, 1992, Issue 1). In addition, a "sense of urgency" was a new strategy introduced for the competition in 1994 (CTC Newsletter, 1994, Issue 3). The sense of urgency strategy included: fast tracking during placing orders, shipments, and distribution; focusing on retail point-of-sale, including vendor partners more in the process, marketing and the rest of the enterprise (a corporation with more Dealers helps the head office make better decisions); and internal links between the different areas of marketing (merchandising, advertising, and sales must be seamless, strategic marketing) (CTC Newsletter, 1994, Issue 3). In addition, in terms of its own private label programs, Canadian Tire improved private label management and started a consumer-driven strategy including criteria to improve aspects such as merchandise assortment, pricing, presentation, store look, graphics, advertising, public relations, service and smiles reflected (CTC Annual Report, 1991; CTC Newsletter, 1992, Issue 1).
4.1.2 New and Improved Strategies for Competition (1996-2001) During 1996 to 2001, multiple Canadian and U.S. retailers were competing in the marketplace. This period became crucial for Canadian Tire to differentiate from
49 competitors like Wal-mart and Home Depot Inc. To prepare for the challenge, Canadian Tire returned to its roots - to focus on customers and what they wanted. Therefore, as a starting point, a new store format was introduced in 1996 (CTC Annual Report, 1996). Various important changes such as color- coded main departments, an adjusted higher entrance, and a new information kiosk became part of the new store format (McBride & Craig, 1997). In addition, there was an overhaul of the distribution system and new customer service policies were adopted during 1996 to 2001 (McBride & Craig, 1997). During this period, Canadian Tire emphasized on offering various products, product category choices, private labels and national brands. For example, Canadian Tire retooled its auto parts marketing strategy, increasing the emphasis of its advertising from its own Motomaster brand to its broadened stock of national brands (Daw, 1 997). The strategy related to CTC private label programs was also underlined by the increasing popularity of its high-quality private labels (The Globe and Mail, 1997, May 23). Private labels such as the Motomaster series were re-launched with a "new focus, new look, and new image." This strategy resulted in changing perceptions, from a "good price and middle range quality perception" to "value proposition using proven technology" to compete with national brands (CTC Newsletter, 1996, Volume 2; 1998, Volume 2, p. 1). The Federal Mogul/TRW premium chassis parts were converted from Motomaster chassis parts which carried better quality (CTC Newsletter, 1996, Issue 2). In addition, to compete with other low-price retailers such as Wal-mart, Canadian Tire maintained its competitiveness in the "everyday low-price" environment to regain market share (The Globe and Mail, 1996, Aug 2).
50 Another notable strategy of Canadian Tire rooted within the latter part of this period, was the introduction of an eBusiness strategy into the retailing competition (DSN Retailing Today, 2000, Dec 11). Canadian Tire launched its online shopping website (www.canadiantire.ca) in late November of 2000, two days before Hudson's Bay Co. moved online with a website for its Bay and Zellers stores. At the time, Wayne Sales, Canadian Tire's president and CEO, commented that his company's site offered consumers "great convenience," product information and "money" rewards (DSN Retailing Today, 2000, Dec 1 1). In addition, as a good corporate citizen, Canadian Tire launched non-profit programs such as the Canadian Tire Child Protection Foundation dedicated to the health, safety, and welfare of children, and environmental programs to recycle thousands of tons of plastic, cardboard, and paper (McBride & Craig, 1997). Thus, the years of 1991 to 2001 could be seen a period where a number of changes occurred in the Canadian retail marketplace as well for the Canadian Tire. The first period (1991-1995) was an era where CTC prepared itself for the demanding consumers, economic downturn, and competition from the U.S. The latter period (1996- 2001) was an era where CTC offered new and improved strategies for the competition. Overall, Canadian Tire could be seen as applying strategies that resulted in faster growth (gross operating revenue, net earnings per share, and number of associate stores) for the period of 1991 to 2001. The following sections provide the descriptive findings of the three key marketing elements of Canadian Tire's private labels and national brands for three selected product categories and related specific products during this period.
51 4.2 Descriptive Findings: Objective Quality Over Time This objective quality element section is divided into two parts. First, the descriptive findings of private label objective quality over time are presented. Second, the comparative findings of objective quality differences and similarities between private labels and national brands as obtained from the archival data are presented.
4.2.1 Findings for Objective Quality of CTCs Private Label Products Over
Time Findings of the objective quality of three Canadian Tire private label products (P205/70R14 93S tires, 18-speed mountain bicycles, and gas lawn mowers) over time are presented here. For this study, objective quality for these products was solely examined based on the available CTC catalogue archival data sets.
Auto tires of size P205/70R14 93S were studied over two periods. The early period was defined as the period of 1991 to 1995 when only private label tires were advertised in the catalogues. The later period was defined as the period of 1996 to 2001 when catalogues offered national brand tires in addition to the private labels. Eleven components of the product (such as "speed-rating and style" and "polyester cords") were reviewed. The detailed descriptions of these components are provided in Appendix 4. The detailed results from the content analysis of objective quality of private label tires (P205/70R14 93S) are provided in Appendix 9.
The objective quality of the private label tires was found to improve over time, specifically relating to speed-rating and style, shoulder grooves, quiet road/noise road
52 condition, performance rating, and warranty components. For example, both speed ratings "S" (maximum service speed of a tire is 112 mph) and "T" (maximum service speed of a tire is 118 mph) were offered in the later period (CTC Annual Catalogue, 1997-1999, 2001), whereas only the "S" speed rating was offered in the early period (CTC Annual Catalogue, 1995). Furthermore, rib-type design or computer-phased variable pitched tread, which can reduce noise or provide a quieter ride, were found to be available only in the later period (CTC Annual Catalogue, 2001). In the early period, only the "superb handling response" and "precise cornering plus a smooth ride" components were offered (CTC Annual Catalogue, 1993). The additional features could be the result of better technologies developed and applied by CTC in the later period. In summary, private label tires improved in objective quality over time.
The objective quality of 18-speed mountain bicycles was examined over two 5- year periods when both national brands and private labels existed. The early period encompassed 1993 to 1997 and the later period included 1998 to 2001. National brands were not advertised in the catalogue after 1998. Twelve important components of mountain bicycles (for example, "gears" and "frame") were compared for the two periods. The detailed objective quality descriptions are provided in Appendix 5. Detailed results of content analysis are provided in Appendix 10.
The same quality was found in the private label bicycles for both periods for components such as gears, frame, size, grip, tire, water bottle and cage. For example, oversize and polished chrome frames were found in both the early and later periods (CTC Spring & Summer Catalogue, 1993; CTC Annual Catalogue, 1997, 1998). In terms of the
53 other components, a different emphasis on elements was found for the two periods. For example, the fork component was "a unicrown fork" in the early period (CTC Spring & Summer Catalogue, 1994) and "a suspension fork" in the later period (CTC Annual Catalogue, 1999). In addition, the brake component focused on front and rear side-pull brakes in the early period (CTC Spring & Summer Catalogue, 1993-1994). In the later period CTC started to introduce dual hand brakes as well as V-brakes (CTC Annual Catalogue, 2000). Overall, the findings did not clearly indicate that the bicycles in one period were of better quality than in the other period. Thus, the overall objective quality of the private label bicycle products was similar over time.
The gas lawn mower product as advertised in CTC catalogues was examined over two periods; the early period included 1991 to 1997 and the later period included 1998 to 2001. In the early period there were no national brand gas lawn mowers available in the catalogues. Six components of gas lawn mowers (such as height adjustment and function) were examined for the two periods. The detailed descriptions are provided in Appendix 6. The details of the content analysis are provided in Appendix 1 1 .
For five components, including height adjustment, function, handle grip, horsepower/engine, and speed control, the better quality elements were found in the later period. For example, higher horsepower engines of 5.5 hp, 6 hp and 6.25 hp were found in the later period (CTC Annual Catalogue, 1999-2001) compared to engines of 4 hp, 4.5 hp, and 5 hp available in the early period (CTC Spring Catalogue, 1991; CTC Spring & Summer Catalogue, 1992-1994; CTC Annual Catalogue, 1995-1997). In terms of the function component, most gas lawn mowers in the later period had advanced selections,
54 such as 2-in-l (rear-bagger/mulching) or 3-in-l (side-discharge, rear-bagger and mulcher) (CTC Annual Catalogue, 1998-2001), compared to the single function selections, such as side-discharge or rear-bagger, found in the early period (CTC Spring Catalogue, 1991; CTC Spring & Summer Catalogue, 1992-1994; CTC Annual Catalogue, 1995-1997). The objective quality of private label gas lawn mowers was seen as improved over time.
4.2.2 Findings for Objective Quality Differentiation of Private Label and
National Brand Products This section presents findings of the objective quality comparison of Canadian Tire private labels and national brands for three products (P205/70R14 93S tires, 18 speed mountain bicycles, and gas lawn mowers).
The objective quality of private label and national brand tires of size P205/70R14 93S was examined for the period 1996 to 2001 with available data from CTC catalogues. Eleven components of the product (such as "speed-rating and style" and "polyester cords") were reviewed. The detailed descriptions are provided in Appendix 4. The details of the content analysis are provided in Appendix 12.
Private label tires were similar in objective quality to national brands for this period, specifically relating to whitewall/blackwall, belts, shoulder grooves, straight circumferential grooves and centre rib components. For example, both private label and national brand tires had the "whitewall reverses to blackwall" feature (CTC Annual Catalogue, 1996, 1997). In addition, the "S" speed rating feature was provided both by private label and national brand tires (CTC Annual Catalogue, 1996-1999, 2001). The
55 emphasis on components such as tread design, speed-rating and style, performance rating, polyester cords, quiet road/road noise, and warranty were found to be varied for private labels and national brands. For instance, private labels had more tread designs such as block tread design, season tread design, and long-lasting tread design (CTC Annual Catalogue, 1996-1999). However, national brands had relatively better features in certain components. For example, within the tread design component, national brands had variable-length tread blocks and V-block tread to provide a smooth and quiet ride (CTC Annual Catalogue, 1996-1997; 2001). In conclusion, the private label and national brand tires had similar objective quality in 1996 to 2001 .
The objective quality of private label and national brand 18-speed mountain bicycles (MTB) was examined for the period 1993 to 2001 with available data from CTC catalogues. Twelve important components of the mountain bicycles (for example, "gears" and "frame") were compared for the two brands. The detailed descriptions of these twelve components are provided in Appendix 5. The details of content analysis are provided in Appendix 13.
National brand bicycles had better objective quality than private label products for this period, specifically relating to gear, seat, grip, tire, derailleur/shifting system, and rim components. For example, the bicycle grip refers to features on the handlebar, which is a device made up of two handles connected by a tube for steering the bicycle (see details in Appendix 5). From current study, national brand bicycles had more grip feature selections such as "premium gel grip," "deluxe soft-fit seat/gel grip," and "shock absorbing gel grip" (CTC Annual Catalogue, 1993, 1995-1997). In contrast, private label
56 bicycles only had "tapered grips" (CTC Spring & Summer Catalogue, 1993). Also, national brand bicycles had "lightweight aluminum alloy rims" and "regular alloy rims" (CTC Annual Catalogue, 1996, 1997). In contrast, private label bicycles only had "regular alloy rims" (CTC Annual Catalogue, 1995). In summary, national brand 18- speed MTBs had better objective quality than the private label bicycles for the period
from 1993 to 2001.
The objective quality for private label and national brand gas lawn mowers was examined for the 1998 to 2001 period with available data from CTC catalogues. Six important components of gas lawn mowers (for example, "height adjustment" and "function") were compared. The detailed descriptions of these six components are provided in Appendix 6. The details of content analysis are provided in Appendix 14.
Private label gas mowers had better objective quality than national brands for this period, specifically relating to height adjustment, function, horsepower/engine, handle grip, and speed control components. For example, private label gas lawn mowers had two handle grip types: standard and folding foam (CTC Annual Catalogue, 1998-2001). However, national brand gas lawn mowers only offered the standard handle grip (CTC Annual Catalogue, 2001). Private label lawn mowers had multiple function selections including side-discharge, 2-in-l (rear-bagger/mulching), and 3-in-l (side-discharge, rear- bagger, and mulcher) (CTC Annual Catalogue, 1998-2001), whereas most national brands had single function selections of side-discharge or rear-bagger (CTC Annual Catalogue, 1998-2001). In summary, private label gas lawn mowers had better objective quality than national brand gas lawn mowers for this period of 1993 to 2001 .
57 4.3 Descriptive Findings: Objective Price Over Time In this section the findings of the objective price comparison of Canadian Tire private label products (tires, bicycles, and lawn mowers) are presented in three parts: the objective price of CTCs private label products over time; the index (average) price comparison of CTCs private label and national brands over time; and the objective price comparison of CTCs private label and national brands over time. The objective price for each year was recorded for various private labels and national brands of the respective selected products.
4.3.1 Findings for Objective Price of CTCs Private Label Products Over
Time The descriptive findings of the objective price element of CTCs private label tires during the 1993 to 2001 period are presented in Figure 4.1. Specifically, Figure 4.1 offers objective prices of various private label tires (for example, Motomaster SP-100 Radial, Motomaster SK-110 Touring Edition) for the product size P205/70R14 93S over time. Overall, slight increases in price over time were indicated for nearly all the private labels included. For example, Motomaster SE showed a trend of slightly increasing objective prices over six years, from 1995 to 2001. Similarly, objective prices for Motomaster AW+ and Motomaster Touring LXR increased slightly over five years (from 1996 to 2001) and four years (from 1998 to 2001), respectively. Similar increasing trends can be seen for Motomaster LE, Motomaster SK-1 10 and Motomaster AQUA PLUS. However, objective prices decreased quite significantly for two of the private labels: Motomaster XT 75 decreased from $85.99 in 1993 to $64.99 in 1994, and Motomaster LE decreased from
58 $94.99 in 1993 to $73.99 in 1995. Overall, the objective price for the various private label P205/70R14 93S tires indicated a slightly increasing trend over time. It should be noted that there are insufficient data points to analyze trends for the years 1993 and 1994 due to a lack of advertising within the CTC catalogues of these two years.
Figure 4.1 Objective Price of Canadian Tire Private Label Tire Product of Size P205/70R14 93S during 1991 to 2001 Period
120
100 Motomaster SP-100 Radial Motomastsr SK-liOTounng Edition
sr-fvloio master XT75 —îvïoto master SKIlO
60 *— Motomaster AQUA PLUS t—-Moto master LE i— Motornasier Touring LXR 40 ...— Moia master SE
Moto-master AWt 20 t— Predator Radía:! GTS
1993 1394 1995 1996 1997 1998 1999 2000 2001
Source: CTC Annual Catalogue, 1993-2001 The objective price element of CTCs various private label 18-speed mountain bicycles during 1993 to 2001 is presented in Figure 4.2. The objective prices for Supercycle Breeze (1997 to 1999), Supercycle Anvil (1998 to 1999) and Supercycle BMX-1 000 (1999 to 2000) indicated a trend of falling prices over time. Overall, there was no indication of an increasing trend of objective price for various private label 1 8- speed MTBs over time.
59 Figure 4.2 Objective Price of Canadian Tire Private Label 18-speed Mountain Bicycle Product during 1993 to 2001 Period
250
«-?-»Supercycle Strada 200 <=43— Supercycle Storm Supercycle Twister 150 —«M— Supercycle Breeze ' «-Supercycle Anvil 100 Supercycle Bullet Supercycle BMX-1000 50 Supercycle 1800S Supercycle XTI-18
1993 1994 1995 1996 1997 1998 1999 2000 2001
Source: CTC Spring & Summer Catalogue, 1993-1994; CTC Annual Catalogue, 1995-2001
The objective prices of CTCs private label gas lawn mowers during the 1991 to 2001 period are presented in Figure 4.3. For this product category there seemed to be no consistent trend of objective prices, as data indicated both increasing and decreasing trends of objective prices for different private labels over time. However, it is interesting to note that in the earlier period (1991 to 1993), the objective price range of private label gas mowers was mostly between $200 and $400; in the later period (1994 to 2001), the highest prices for private label gas mowers were in the $400 to $500 range. Even though no consistent trends were observed for this product category, high-priced private label gas lawn mowers (Mastercraft 60-1695-6 and Mastercraft 60-1694-8) were available in the
60 market after 1994. Figure 4.3 Objective Price of Canadian Tire Private Label Gas Lawn Mower Product during 1991 to 2001 Period
~~F~~ M aste r erari 60-1673-8 fvïukher "\. -«- Msstercraft 60-1677-0 -sir- Vi a sie reran S0-Ì6S2-6 Deluxe mode! —— Mastercraft 60-1691-4 ~~^-~ Macererai* 50-1666-6 ~^g~~ >v1astercrañ 60-1668-2 Ecano-Plus model —1— Mastercraft 50-1684-2 —»- Vlasteroran 60-1695-6
v'asre-rra-äO/a.*e';rä"50 1669-016S6-8/SO-16S6-6
.'astp-t'a-iO 1679-6 " 3:'c':-3"s0 16S9-2 '.'aste-c-a- 50 1694-S Self-propelled --* Ysrdworks 60-1609-4 Self-propelled i;-:- Yardworks 60-16OS-6 Self-propelled ~— Vardwiorks 60-1605-2 - Yardworks 60-1604-4 ...... ysrdworks 60-1602-3 ¦¦ -Yardwcrks 60-1603-6
1991 1992 1393 1994 1995 1996 1997 199S 1999 2000 2001
Source: CTC Spring Catalogue, 1991 ; CTC Spring & Summer Catalogue, 1992- 1994; CTC Annual Catalogue, 1995-2001
4.3.2 Index (Average) Price Comparison of CTCs Private Labels and
National Brands Over Time The findings of the index (average) price comparison of Canadian Tire private label and national brand tire, bicycle and lawn mower products over time are presented in
61 this section. For this study, the index (average) price for each year was computed for the respective products by using private label prices and national brand prices for the year. The index (average) price comparison of Canadian Tire private label and national brand tires of size P205/70R14 93S is indicated in Figure 4.4. The index (average) price for the tire products was computed from various private label prices and national brand prices for each year. For the period of 1997 to 2001, the index (average) price of national brand tires was higher than private label tires in all years except 1999, when the price was
the same. Figure 4.4 Average Price Comparisons of Canadian Tire Private Label and National Brand Tire Product of Size P205/70R14 93S during 1996 to 2001 Period
120
100
80 •Private Label Tire Average 60 Price National Brand Tire 40 Average Price
20
1996 1997 1998 1999 2000 2001
Source: CTC Annual Catalogue, 1996-2001
In terms of the average price gap between national brand and private label tires, the trends in Figure 4.4 show a narrowing gap for the period of 1997 to 2001 . During that time the average price gap was about $23 in 1997, $18 in 1998, and $9 in 2001. Overall, these data indicate that for the tire product of size P205/70R14 93S, the average price of
62 national brands was higher than private labels and the price gap narrowed over time. For the 18-speed MTB product, the index (average) price comparison of Canadian Tire private labels and national brands over time is presented in Figure 4.5. Data were unavailable for average prices of the 1995 and 1996 private label bicycles as well as the 1999, 2000, and 2001 national brand bicycles. However, where data were available the average prices of national brand bicycles were higher overall than private label bicycles. Figure 4.5 Average Price Comparisons of Canadian Tire Private Label and National Brand 18-speed Mountain Bicycle during 1993 to 2001 Period
! 400 I 350
300
250 Private Label Bicycle 200 i Average Price 150 - *"—"—? ^*n^^¿ii^^ National Brand Bicycle Average Price 100
50
0 1993 1994 1995 1996 1997 1998 1999 2000 2001
Source: CTC Spring & Summer Catalogue, 1993-1994; CTC Annual Catalogue, 1995-2001
Findings indicated that during 1993 to 1997, the average price gap between private label and national brand bicycles generally became wider over time. The gap was about $47 in 1993, $72 in 1994, and $195 in 1997 (largest gap) between private label and national brand 18-speed MTB products. However, after 1997 there were not enough data points to indicate a strong trend over time. Overall, for the 1 8-speed MTB product, the average price of national brands was higher than private labels over time; however, there 63 was inconclusive evidence regarding the trend of the narrowing price gap over time. The average price comparison of Canadian Tire private label and national brand gas lawn mower products during 1998 to 2001 is shown in Figure 4.6. The average price of private label gas lawn mowers was substantially higher than national brand gas lawn mowers during that period. Figure 4.6 Average Price Comparisons of Canadian Tire Private Label and National Brand Gas Lawn Mower Product during 1998 to 2001 Period
j 450 i 400 I 350 j 300 ! 250 Private Label Lawn Mower Average Price 200 National Brand Lawn 150 Mower Average Price 100
50
0
1998 1999 2000 2001
Source: CTC Annual Catalogue, 1998-2001
The average price gap between private label and national brand gas lawn mowers widened slightly over time. Specifically, during 1998 to 2000, the price gap increased from $140 in 1998, to $180 in 1999, and finally to about $192 in 2001). Overall, this comparison indicated that for the gas lawn mower product, the average price of private label mowers was higher than national brand mowers, and the price gap between private labels and national brands increased over time.
64 4.3.3 Findings for Objective Price Comparison of CTCs Private Labels and
National Brands Over Time The findings regarding the objective price comparison for CTCs private labels and national brands for tires (P205/70R14 93S), bicycles (18-speed MTB) and lawn mowers (gas lawn mower) over time are presented in this section. The objective price comparison of CTCs private label (Motomaster series and Predator) and national brand tires (Goodyear, BF Goodrich and Michelin) during 1996 to 2001 is presented in Figure 4.7. Over time, the objective prices of national brand tires were generally greater than for private label tires. All national brand tire prices were above $80, whereas most Canadian Tire private label tire prices were lower than $80. Figure 4.7 Price Comparisons of Canadian Tire Private Label and National Brand Tire Product of Size P205/70R14 93S during 1996 to 2001 Period
IOS 102.99 —?~- Motomaster SKIlO •a-o-as 1€0 MotoR-iaStïr AOUA PLUS
S*-S9 *-~ îïlotofrsaster 91.99 ¦tatoiTiBster Touring LKR 90 vìotomsster S 84.99 84.99 SSAS » ™4§*~- Motoroaster Aw
9.99 Predator Radial GTS 80 79.49 Goodyear Spectra »39 ?W9^ «!5999 Goadyeâr Ventur «# 71.49 #9^9* l-gf'-fB —?— Goodvesr Integr* trf^ •"•Sir.93 Goodrich -Radial BFGoocrich ntro A MbS
1ICHELIM XH4 1996 1997 1998 t QQQ 2000 2001
Source: CTC Annual Catalogue, 1996-2001
The objective price comparison of CTCs private label (Supercycle) and national
65 brand (CCM) 18-speed MTBs during 1993 to 2001 is presented in Figure 4.8. Most national brand prices were in the higher range compared to private label prices during this period. More specifically, the national brand bicycle price range was $170 to $500, and most bicycles were above $200. Private label bicycle prices were generally less than $200. Figure 4.8 Price Comparisons of Canadian Tire Private Label and National Brand 18-speed Mountain Bicycle during 1993 to 2001 Period
600 Su pe rcyc le Strada Supercycle Storm 499,99 500 ¦~4^-^^-~ —è— Supercycle Twister -W- Supercycle Breeze —*— Supercycle Anvil 399.99 •"?—Supercycle Bullet 400 ~3§9:§f~ 379.99 —!— Supercycle BMX-1000 — Supercycle ISOOS .....-- Supercycle XTi-18 300 ...... :'*?3^§%9^^;??§9^9^: 2?9'/9§ —F— CCM Gemini .¦;*¦*&&&$$<% 269.99 -B-CCM Excel 199.99 192,99 199-99 199J9 ••¦¡la™ CCM Pursuit 200 ?%
--»- CCM Supra ~- CCM Shockwave Pro-series
CCM Aluminum Pro-series 1993 1994 199S 1996 1997 1998 1999 200O 2001
Source: CTC Spring & Summer Catalogue, 1993-1994; CTC Annual Catalogue, 1995-2001
The objective price comparison of CTCs private label (Mastercraft and Yardworks) and national brand (Yard Machines and Lawn-Boy) gas lawn mowers during 1998 to 2001 is presented in Figure 4.9. Interestingly, over time the private label gas
66 mower prices were all higher than the national brand gas mower prices during this period. Specifically, all CTC private label gas mower prices were above $230, whereas most national brand gas mower prices advertised in CTC catalogues were lower than $230, with the exception of one product (Lawn-Boy 60-1656-0) priced at $299.99 in 2001 .
67 Figure 4.9 Price Comparisons of Canadian Tire Private Label and National Brand Gas Lawn Mower Product during 1998 to 2001 Period
800
—*- MaftarcrsftíO-lúS^O
-·- ?Äst5rrrsft SO4SSS-8/S0-1SSS-S 700 ~^qfy~^~~~~ —«— Mssta rcraft €0-16734
^e- Misturerai! ÎS-ÎSS7-S S 529.99 _*-M3stercraft60-iS83-2 -#-M5nar£!-BftiO-1634-SSslf-propelied 600 g£»$$S^^S3 —C-^Q—QQ—· —«-. MKts rcraft 60-ÎS33-8 Sí If-propel ¡sci
549.99 ¦¦¦¦¦— i./sstar:räft€O-lS3S4 .....~— fcls-st» rcraft 60-167 3-8
500 iß^ef F&F-&9 —*—YsrdwcriG6ü-:!SÖ6,QSsif-pr3pelied -*-YardwiSfksS ...... *~ Yardworia €0-2537-8 ""· 439.99 f 429.99 —*-~Y=rdw=rksS3-lSia-8Seí-fr2p5¡iK¡ 400 Î99.-99 -^YardwariisSG-lSüMSaif-propelied 569.99 ...... S Yardwarte SO-ISiS-S Sä if-propelied 339.99 —(— ïardworksS0-2S0S-2 329.99 329.99 ...... - YardworksSO-lSÖM fWf\.^.ri 299:99 ^99-99 ...... -- YardwprksS0-î632-8 I 279.99 279.99 269.99 ...... * Yardwsrks =0-2303-6 ?«#»:?*9 ? 249.99 ...... S-- YsrdworteSO-lSülJ 229.97 229.99 219.99 ..... YardwortaSe-2S00-2 ISSrW ...... YardwsrkäE0-15SS-6 159:97 154.99 ..... : Yard Machins 5-MTD S0-ÎSS6-€ "Stt:s3" 149.99 t'iS39" -- ¦ YardMKbines-MTDS.0-1652-S - YsrdMachinas-í*TÍD€0-2S77-S 100 LAWN-äG¥60-l€SS-2 LAWN-BOY 60-1657-5 LAWN-3OTS0-13S6-D 1998 1999 2000 2001 Source: CTC Annual Catalogue: 1998-2001 In conclusion, section 4.3.2 provided the average price comparison of CTC private labels and national brands of three product categories over time. There was 68 only one index price available in each year for both private labels and national brands, and the entire index price was received from the average price within the same product selection criteria. In addition, section 4.3.3 provided the objective price comparison of CTC private labels and national brands of three product categories over time. Basically, multiple prices of different categories and products were available in each year. The trend analysis was applied to compare the price differentiation between private labels and national brands. 4.4 Descriptive Findings: Advertising Over Time In this section the descriptive findings regarding advertising are presented in three parts. The descriptive findings of private label and national brand advertising related to tire, bicycle, and lawn mower product categories are presented. More specifically, findings of the three specific products (P205/70R14 93S tires, 18-speed mountain bicycles, and gas lawn mowers) as well as findings of the three product categories among CTC private labels over time, based on the archival data of CTC catalogues, are presented. As well, it was found that the total number of advertising pages in CTC catalogues during 1991-2001 gradually increased over time. Specifically, the CTC annual catalogue had 211 pages in 1991, 243 pages in 1992, 247 pages in 1993, 255 pages in 1994, 299 pages in 1995, 311 pages in 1996, 319 pages in 1997, 363 pages in 1998, 385 pages in 1999, 435 pages in 2000, and 438 pages in 2001. The CTC Spring Catalogue had 39 pages in total in 1991. Moreover, the CTC Spring and Summer Catalogue was 87 pages in 1992, 99 pages in 1993, and 107 pages in 1994. 69 4.4.1 Findings for CTC Catalogue Advertising of Specific Tire Product P205/70R14 93S and Overall Tire Product Category Advertising levels for P205/70R14 93S tires within the tire product category for private labels and national brands in the CTC Annual Catalogue during 1996 to 2001 is presented in Figure 4.10. Specifically, in 1996 and 1997, CTC catalogues had about 3 advertisement pages in both years for private label P205/70R14 93S tires compared to 0.9 and 0.8 pages, respectively, for national brand P205/70R14 93S tires. In 1998, there was a substantial drop in advertising for these private label tire products. However, in 1999, there were 0.85 advertisement pages for the private label tire products compared to only 0.25 pages for the national brand tire products. And by 2001, advertising of the private label tire products had increased to 1.25 pages compared to 0.75 pages for national brand tire products. During the period of 1996 to 2001, only one year (1998) had less private label advertising than national brand advertising for tire product studied. Thus, for P205/70R14 93S tires, CTC generally advertised its private labels more than national brands in the Annual Catalogue during 1996 to 2001 (all except 1998). 70 Figure 4.10 CTC Catalogue of Tire Product (Size P205/70R14 93S) Advertising of Private Label and National Brand from 1996 to 2001 Period 3.5 3 2.5 2 Private Label Tire 1.5 National Brand Tire 1 A... 0.5 V 0 1996 1997 1998 1999 2000 2001 Source: CTC Annual Catalogue: 1996-2001 In terms of the overall tire product category advertising, this study found that national brand tire products were advertised in the Annual Catalogue starting from 1996. CTC advertised national brands similarly (in 1999 and 2000) and a bit more (in 1998 and 2001) than private labels in their Annual Catalogue during 1998 to 2001 (see details in Figure 4.11). In 1996 and 1997, there was only 1 page of national brand tire products advertising in the Annual Catalogue, but this increased to about 4 pages from 1998 to 2001. For the private label tire products, advertising appeared in the Annual Catalogue in 1991 and onwards, although the amount fluctuated considerably. For this overall category there was more private label advertising (between 4 to 6 pages) in the early years of 1991 to 1997, and between 2 to 4 pages in the period from 1998 to 2001. Thus, the level of national brand tire advertising began to be more comparable with the level of private 71 label advertising starting from 1998 in the Annual Catalogues. Private label advertising, however, indicated the strong trend from 1991 to 1997 in CTC Annual Catalogues. Figure 4.11 CTC Catalogue of Tire Category Advertising of Private Label and National Brand from 1991 to 2001 Period Private Label National Brand 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Source: CTC Annual Catalogue: 1991-2001 In conclusion, according to these findings, only private label advertising was promoted in the early 1990s. Advertising volumes for the private label and national brand tire product category were more similar after 1998. However, regarding advertising volumes for private label specific tire products (P205/70R14 93S), this study found heavier advertising in the later period, from 1996 to 2001 (all but 1998). 4.4.2 Findings for CTC Catalogue Advertising of Specific Bicycle Product 18- speed MTB and Overall Bicycle Product Category Advertising levels for the 18-speed MTB within the bicycle product category for 72 private labels and national brands in the CTC catalogues (Spring & Summer/Annual) from 1993 to 2001 are presented in Figure 4.12. The figure indicates that there was more advertising of national brand of 18-speed MTBs in the catalogue in the early part of this period. For example, in 1993 and 1994, national brand advertising of 18-speed MTBs was about 0.7 and 1.2 pages, respectively, while private label advertising was only 0.2 and 0.3 pages, respectively. No private label 18-speed MTB was advertised in 1995 or 1996. After 1996, there was more advertising of private label 18-speed MTBs (1.5 pages in total) than of national brand MTBs (0.6 pages in total). Furthermore, no national brand 18-speed MTBs were promoted during 1999 to 2001. Overall, private label 18-speed MTBs were emphasized more in the later part of the period by CTC. Figure 4.12 CTC Catalogue of 18-speed MTB Product Advertising of Private Label and National Brand from 1993 to 2001 Period ¦Private Label Bicycle National Brand Bicycle 1993 1994 1995 1996 1997 1998 1999 2000 2001 Source: CTC Spring & Summer Catalogue, 1993-1994; CTC Annual Catalogue, 1995- 2001 This study also examined overall private label and national brand bicycle products advertised in the CTC Spring/Spring & Summer/Annual Catalogues from 1991 to 2001 (see details in Figure 4.13). CTC advertised private label bicycle products more during 73 1992 to 1995. For example, in 1992, 1993, and 1994, advertising for private label bicycles was 2.5, 3.7, and 3.4 pages, respectively, while national brand advertising was only 1.5, 1.3, and 1.6 pages, respectively. In contrast, national brand bicycles were advertised significantly more from 1998 onwards. For example, during 1998 to 2001, advertising for national brand bicycles was 4, 4, 3.2, and 5.2 pages, respectively, while private label bicycle advertising was 2.5, 2, 2.8, and 1 .8 pages, respectively. Overall, it seems that private label bicycle advertising was promoted heavily in the early 1990s and national brand bicycle advertising was promoted heavily in the later 1990s and at the beginning of the 2000s. Figure 4.13 CTC Catalogue of Bicycle Category Advertising of Private Label and National Brand from 1991 to 2001 Period -Private Label •National Brand 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Source: CTC Spring Catalogue, 1991 ; CTC Spring & Summer Catalogue, 1992- 1994; CTC Annual Catalogue, 1995-2001 In conclusion, a different pattern of advertising was observed. The advertising pattern for the specific 1 8-speed MTB product is different from the advertising pattern for 74 the overall bicycle products category in CTC Spring/Spring & Summer/Annual Catalogues for the period of 1991 to 2001 . In terms of the 1 8-speed MTB, more emphasis on national brand bicycles was found in the early 1990s and more emphasis on private label bicycles was found in the late 1990s. In terms of the overall bicycle category, private labels were advertised heavily in the early 1990s whereas national brands were advertised heavily in the late 1990s and the early 2000s. 4.4.3 Findings for CTC Catalogue Advertising of Specific Gas Lawn Mower Product and Overall Lawn Mower Product Category Advertising levels of CTC private label and national brand gas lawn mowers in the CTC Annual Catalogue during 1998 to 2001 are presented in Figure 4.14. There were more advertising pages for private label gas lawn mowers than for national brand gas lawn mowers during 1998 to 2001. Specifically, private label gas lawn mower advertising totaled 1 page during 1998 to 2000 and 1.9 pages in 2001. In contrast, national brand gas lawn mower advertising was found to be less than 0.5 pages in all years except in 2001 (0.6 pages). Figure 4.14 CTC Catalogue of Gas Lawn Mower Advertising of Private Label and National Brand from 1998 to 2001 Period 2 1.5 1 Private Label Lawn Mower National Brand Lawn Mower 0.5 1998 1999 2000 2001 75 Source: CTC Annual Catalogue, 1998-2001 In addition, this study also examined the total number of pages of CTC private label and national brand lawn mower products advertised in CTC Spring/Spring & Summer/Annual Catalogues from 1991 to 2001 (see details in Figure 4.15). In each year between 1991 and 1996, private label lawn mower product advertisements totaled 2 pages whereas national brand lawn mower product advertisements totaled only 1 page. However, in 1998 and 1999, advertising of national brand lawn mower products increased to 2 and 3 pages per year, respectively, which was greater than for private label lawn mowers. In 2000 and 2001, advertising for this product category was at a similar level in CTC catalogues for both private label and national brand lawn mowers. Figure 4.15 CTC Catalogue of Lawn Mower Category Advertising of Private Label and National Brand from 1991 to 2001 Period 3.5 , i 3 ¡ f 2.5 -j I \ \ / «-fr—Private _abel ?-* ? \ / \ ? National Brand 0.5 ? 0 j - : ' f#fJ#^J J·¦/·/^ Source: CTC Spring Catalogue, 1991; CTC Spring & Summer Catalogue, 1992- 1994; CTC Annual Catalogue, 1995-2001 In summary, a different pattern of advertising intensity was observed for gas lawn 76 mowers in comparison to overall lawn mower advertising in CTC Spring/Spring & Summer/Annual Catalogues in the periods studied. In terms of the gas lawn mowers, there was a greater volume of private label advertising compared to national brand advertising in CTC catalogues during 1998 to 2001. In terms of the entire lawn mower category, private label lawn mowers were advertised more than national brand products in the early 1990s (1991 to 1996) while national brand advertising became stronger in the later 1990s. 77 CHAPTER 5: DISCUSSION, RESEARCH CONTRIBUTIONS, LIMITATIONS, AND RECOMMENDATIONS This chapter is divided into five sections. The first three sections offer in-depth discussions relating to the propositions of objective quality, objective price, and adverting elements. The fourth section offers a discussion of the strategies used by Canadian Tire during 1991 to 2001. Finally, the research contributions, limitations, and recommendations for further research are presented. 5.1 Discussion: Objective Quality This section discusses proposition 1 relating to Canadian Tire's objective quality strategy of private labels and national brands during the 1991 to 2001 period. 5.1.1 Objective Quality: Proposition 1(a) Proposition 1(a) is "The objective quality ofprivate label products increases over timer According to the findings of private label programs within the three product categories, the objective quality of Canadian Tire's private label programs for tire (P205/70R14 93S) and gas lawn mower products (but not the 18-speed MTB product) did seem to be better over time. Historically, a private label was perceived as a low quality product alternative (Bellizzi et al., 1981) but improved quality was found over time (Fitzell, 1992; Bronnenberg & Wathieu, 1996; Quelch & Harding, 1996; Apelbaum et al, 2003). The 78 findings from this study regarding the tire product (P205/70R14 93S) and gas lawn mower product support these assertions. Improved product quality of the tire (P205/70R14 93S) and gas lawn mower products could be due to the following two reasons. Firstly, some products of the CTC private label programs were manufactured by industry leaders, well known for their brand quality. For example, Canadian Tire Mastercraft tools were manufactured by a third party national brand manufacturer with a strong reputation for superior quality that was well recognized by the industry (CTC Newsletter, 1989, July). In addition, some Mastercraft lawn mower engines were manufactured by Honda (CTC Annual Catalogue, 1 999). Aside from the three products investigated in the current study, is the example of Canadian Tire oil filters-FRAM filters that were also produced by a national brand manufacturer (CTC Newsletter, 1996, Volume 3). Secondly, CTC private label products were required to go through quality assurance programs in order to compete strongly with other leading brands (CTC Newsletter, 1996, Volume 3). However, the unimproved objective quality of 18-speed mountain could be due to the Canadian Tire's marketing strategy which was positioning Supercycle brand as the middle quality with lower price line in the market place. In conclusion, proposition 1(a) "The objective quality ofprivate label products increases over time" is mainly supported by the findings from the tire (P205/70R14 93S) and gas lawn mower products but not for the 1 8-speed mountain bicycles. 79 5.1.2 Objective Quality: Proposition 1(b) Proposition 1 (b) is "The objective quality differentiation between private labels and national brands is product dependent." Firstly, private label tires (P205/70R14 93S) were found to have a similar objective quality compared to national brands. Secondly, private label bicycles (18-speed MTB) were found to have an inferior quality compared to national brands. Thirdly, private label gas lawn mowers were found to have better objective quality than the national brand products. These results provided strong evidence indicating that different quality scenarios were used for different products and, thus, strong support for proposition 1(b) is evident. Although retailers such as Canadian Tire carry various private label products, it makes sense that retailers use different strategies for different product categories. As noted earlier, Mastercraft/Yardworks gas lawn mowers are a premium quality product. This strategy of premium quality makes it possible to attract quality-conscious consumers. On the other hand, Motomaster tires are positioned as a good quality with best value product to compete with national brand tires (CTC Newsletter, 1996, Volume 3). This strategy can attract more attention from consumers caring about both quality and price. And finally, Supercycle is positioned as a lower priced but relatively lower quality product. This strategy likely attracts price-conscious consumers. In conclusion, proposition 1(b) "The objective quality differentiation between private labels and national brands is product dependent" is strongly supported by the findings from the three selected products. 80 5.2 Discussion: Objective Price This section discusses proposition 2 relating to Canadian Tire's objective price strategy of private labels and national brands during the 1991 to 2001 period. 5.2.1 Objective Price: Proposition 2(a) Proposition 2(a) offers that "The private label price increases over timer According to the depiction of archival data as shown in Figures 4.4, 4.5, and 4.6 for various private label tire (P205/70R14 93S), gas lawn mower, and 18-speed MTB products, there were no consistent findings in this regard. An increasing trend for objective price existed for tires (P205/70R14 93S) but not for gas lawn mowers or 1 8-speed MTBs. It has been mentioned that the objective price of private labels was lower than national brands initially (Bellizzi et al., 1981), however, in recent times, the price of private labels increased (Steiner, 2004). Therefore, this study's findings for the private label tire product price are consistent with existing literature. One of the reasons for the increased prices could be improved quality, as some scholars (Fitzell, 1992; Bronnenberg and Wathieu, 1996; Quelch & Harding, 1996) indicated in their studies. However, the findings for private label 18-speed MTBs and gas lawn mowers did not offer the same trend. It is also possible that intense price competition existed in the market during the period of the study. Perhaps the impact from Wal-mart, the U.S.-based retailer that entered the Canadian retail industry in 1994, had strong implications for Canadian Tire as well as entire Canadian retail industry. Even with advantages such as banner recognition nationwide, it is likely that CTC had to launch a reduced-price 81 strategy of "Low Prices Guaranteed Today and Every Day" to attract more customers (Francois, 1994). In conclusion, proposition 2(a) "The private label price increases over time" is mainly supported through the evidence of the private label tire product (P205/70R14 93S) but not for the private label 1 8-speed bicycle product and private label gas lawn mower product. 5.2.2 Objective Price: Proposition 2(b) Proposition 2(b) is offered as "The objective price differentiation between private labels and national brands has decreased over timer According to the depiction of archival data (Figures 4.7, 4.8, and 4.9), the three products indicate various trends over time. These results could be due to the nature of the products selected for this study as well as to the limited data points available to examine long term perspectives. A decreasing price gap between private labels and national brands was found only for the tire product (P205/70R14 93S). This finding is consistent with the literature of some scholars (Raju et al., 1995; Steiner, 2004), and could also be rationalized as this product belongs to a price-insensitive category. Raju et al. (1995) proposed that in some price- insensitive categories, the price gap may become smaller between private labels and national brands. On the other hand, an increasing price gap between private labels and national brands was found for gas lawn mowers. This result could be due to the impact from some new private label brands introduced to the market. For example, a new private label gas lawn mower named "Yardworks" was introduced in 1999 (CTC Newsletter, 1999, 82 Volume 6) and was promoted in the Annual Catalogue in 2001. Also the availability of private label gas lawn mowers increased over time from 6 or 7 types of the Mastercraft brand to 13 types of the Yardworks brand. In conclusion, the findings of price gaps between private labels and national brands did not strongly support proposition 2(b) "The objective price differentiation between private labels and national brands has decreased over timer Only the tire product (P205/70R14 93S) seems to support this proposition. 5.2.3 Objective Price: Proposition 2(c) Proposition 2(c) offers that "The objective price differentiation between private labels and national brands over time is product dependent." The findings from the trends as portrayed from the available archival data (Figures 4.4, 4.5, 4.6, 4.9, 4.10, and 4.11) indicated the following: for the gas lawn mower products, the objective price of private labels was consistently higher than national brands in terms of average (index) price as well as prices of individual brands; for the tire and bicycle products (P205/70R14 93S tire and 18-speed MTB), private label prices were consistently lower than national brands over time in terms of average (index) price as well as prices of individual brands. Furthermore, Figures 4.6, 4.7, and 4.8 also indicated that the price gap between private labels and national brands for the three selected products over time were different. These results provided strong evidence indicating different price differentiation scenarios for different products and, thus, strong support for the proposition 2(c) is evident. These differences could be due to the different objective quality of the products. Findings indicated that private label gas lawn mowers had better quality than national 83 brand gas lawn mowers. CTC likely offered high quality, high priced private label products compared to national brands in this regard. On the other hand, various private label programs such as Motomaster tires were being positioned as compatible price with higher quality products (CTC Newsletter, 1998, Volume T). CTC likely offered private label tires (P205/70R14 93S) as a good price and good quality product in comparison to the competing national brand tire products of the same size. In conclusion, proposition 2(c) "The objective price differentiation between private labels and national brands over time is product dependent" was strongly supported. Therefore, it is crucial to study business strategies, not in an aggregate way for all products, but to explore each product in-depth and study how businesses position their strategies differently for different products over time. 5.3 Discussion: Advertising This section discusses proposition 3 relating Canadian Tire's advertising strategy for private labels and national brands during the period of 1991 to 2001 . 5.3.1 Advertising: Proposition 3 Proposition 3 is offered as "Private label products represent a greater volume and a higherfrequency ofadvertising in comparison to national brand advertising over time." A reflection of this proposition is presented in terms of the three product categories (tire, bicycle, and lawn mower) overall and in terms of the three specific products (P205/70R14 93S tires, 1 8-speed MTB, and gas lawn mowers). 84 In terms of advertising in CTC catalogues, this study found that private label products in the tire, bicycle, and lawn mower categories were advertised more so than national brands in the early 1 990s. The opposite trend was found for the late 1 990s and early 2000s when there was more national brand advertising than private label advertising. Therefore, the early period advertising in catalogues seems to reflect proposition 3 that "Private label products represent a greater volume and a higherfrequency ofadvertising in comparison to national brand advertising. " More advertising in the early period appeared to indicate a strong effort from CTC in promoting brands for CTC private label programs in the market before the entry of its strong competitors. In addition, increased advertising of national brands in the later years may also have added value to consumers in terms of availability of purchase choices. It can be seen that it is important for CTC to offer choices to consumers in order to be compatible with its competitors. The retooling of Canadian Tire in its auto parts division may also relate to a new marketing strategy where emphasis was changed from having only the private label Motomaster brand to having a broader stock of national brands (Daw, 1997). CTC seemed to continue promoting its private labels as well; a new promotional strategy for Motomaster was launched in 1998 (CTC Newsletter, 1998, Volume 2). In terms of the specific products, this study found some evidence of a contrasting trend, for example, emphasis on private labels in the later years. For the tire product P205/70R14 93S, there was a greater volume of advertising for private labels than national brands from 1996, 1999 to 2001, and comparable volumes in 1997 of advertising 85 in the later years. This result could be due to the impact of CTC retooling its auto parts division, as mentioned previously. For the 18-speed MTBs, there was also more emphasis on private label bicycles in the late 1990s. CTC may have wanted to promote its private labels at that later period. Similarly, for the gas lawn mowers, private label (Mastercraft and Yardworks) advertising was found in greater volumes than national brand advertising in CTC catalogues during 1998 to 2001. Yardworks gas lawn mowers were created in 1999 and were heavily advertised in the Annual Catalogue, in-store promotion, and television commercials in 1999 (CTC Newsletter, 1999, Volume 6). Thus, the CTC marketing strategy specifically related to advertising was aimed at promoting their existing and newly launched private label programs. Overall, these variations in advertising could be due to CTCs specific marketing strategies for specific product categories and specific products. A review of the literature also indicated that advertising expenditures for private labels and national brands will be different due to different sizes of manufacturers and retailers, as well as the nature of different product categories (Bell et al., 1997; Gomez & Benito, 2008). In conclusion, proposition 3 "Private label products represent a greater volume and a higherfrequency of advertising in comparison to national brand advertising over time" was partly supported by the findings within the catalogue advertising media. It seemed that advertising volume and frequency is dependent upon the nature of time period, product category, and specific products. 5.4 Overall Discussion: CTC Strategies Over Time The findings from this study on marketing strategies such as objective quality, 86 objective price, and advertising elements also offered some evidence regarding CTCs strategy for this period of 1991 to 2001 . In the early 1990s, the retail industry in Canada was faced with a new set of challenges such as entrance of new U.S. competitors and the economic downturn. This study found some evidence that CTC tried to overcome these challenges by adopting a low price strategy as well as strongly introducing and promoting its private labels in order to create a strong identity in the marketplace. In terms of the price element, this study found some evidence that Canadian Tire offered a low price strategy to compete with retailers such as Wal-mart during this period. For example, the Supercycle bicycle series is a good example of a private label with good value and lower prices for consumers. Within the tire category, this study also found that some CTC private label tire series such as the Motomaster SE belong to a tire product category that is relatively competitively priced with good quality. In terms of objective quality strategy, it seemed CTC applied "rigorous quality assurance programs" for its various private label tires in order to compete with other leading brands (CTC Annual Report, 1991, p. 11). It was reported that private label programs of Canadian Tire such as Motomaster and Mastercraft brands were being positioned as equal to or better than the best known national brands (CTC Newsletter, 1994, Issue 4). In addition, a new private label for the lawn and garden line, called Garden Club, was launched that presented "top-notch products with high quality packaging and presentation at the store level" (CTC Newsletter, 1994, Issue 4, p. 2). Some evidence was also found in this study that products such as CTC private label gas lawn mowers (Mastercraft) had higher quality than the national brand products. Therefore, 87 the quality of Canadian Tire's private labels did "meet or exceed the specification of the best national brand" (CTC Newsletter, 1994, Issue 4, p. 5). Moreover, for this early 1990 period, the current study found some evidence indicating a stronger advertising strategy by CTC, especially with its private label programs. In general, this study found that advertising in the form of CTC catalogues expanded during this period. For example, there was increased coverage in the Canadian Tire Annual Catalogue from 211 pages in 1991 to 299 pages in 1995. In addition, private label advertising in the catalogues was found to be very strong. For example, the number of advertisement pages for private label products was found to be significantly more than for national brands within the tire, lawn mower, and bicycle categories in the early 1990s. In the late 1990s, however, CTC was found to apply slightly different strategies in the marketplace. During 1996 to 2001, multiple Canadian and U.S. retailers were competing in the marketplace and, thus, this period became crucial for Canadian Tire to be competitive as well as to differentiate itself from competitors like Wal-mart and Home Depot. CTC adopted the strategy of offering "comprehensive product category choices" (both private labels and national brands), maintaining its "emphasis on its private labels" as well as "low-price strategy" (Francois, 1994; CTC Newsletter, 1998, Volume 2). For this late 1990s period, CTC offered choices of both private labels and national brands and started to promote national brands as well. This study found that there was more coverage of national brands (in terms of total number of advertisement pages of specific products as well as introduction of national brands) in catalogue advertising. For instance, starting in 1996, catalogue advertising for national brand tires was introduced and increased dramatically until 2001. Specifically, national brand "tire" product category 88 advertising in the Annual Catalogue increased from 1 page in 1996, to 2 pages in 1997, and finally to more than 5 pages in 2001 . In addition, the total advertising for the national brand "bicycle" product category increased from 1 page in 1997 to about 4 pages in 1998 to 200 1 . For the "lawn mower" product category, national brand lawn mowers such as Yard Machines-MTD and Lawn-Boy brands were introduced into catalogues in 1998. At the same time, CTC maintained the emphasis on private label products by introducing new and improved private labels. The strategy related to CTC private label programs was underlined by the increasing popularity of its high-quality private labels (The Globe and Mail, 1997, May 23). Private labels such as the Motomaster series were re-launched with a "new focus, new look, and new image" strategy from a "good price and middle range quality perception" to "value proposition using proven technology" to compete with national brands (CTC Newsletter, 1996, Volume 2; 1998, Volume 2, p. 1). In addition, aside from the three product categories investigated in the current study, Canadian Tire also converted from Motomaster chassis parts to Federal Mogul/TRW premium chassis parts, which provided better quality (CTC Newsletter, 1996, Issue 2). Yardworks^ a new quality private label targeted to lawn and garden enthusiasts, was introduced in 1999 (CTC Newsletter, 1999, Volume 6). The findings from this study also provide some evidence that the objective quality of private label gas lawn mowers (for example, Matercraft and Yardworks brands) were significantly higher than national brands (for example, Lawn-Boy). Specifically, according to the analysis of six quality components of private label and national brand gas lawn mowers, this study found evidence that five components including function, height adjustment, horsepower/engine, handle grip, and speed control of 89 Mastercraft/Yardworks gas lawn mowers had better quality than national brands such as Lawn-Boy. Therefore, it seemed that Canadian Tire expanded some of its private label products with higher prices and better quality. In addition, CTC also continued to incorporate various advertising media for its new private label brands to attract consumers. For example, for the introduction of the Yardworks brand, all new in-store POP and the 1999 Annual Catalogue advertised this new brand (CTC Newsletter, 1999, Volume 6). CTC also maintained its low price strategy for some of its products to compete with other low-price retailers such as Wal-mart during this period. In other words, Canadian Tire maintained its competitiveness in the "everyday low-price" environment to regain market share (The Globe and Mail, 1996, Aug 2). For example, decreased prices of Supercycle brands were found during this period. Specifically, the prices of private label programs of bicycle category such as Supercycle Breeze, Supercycle Anvil, and Supercycle BMX-1000 all dropped during the late 1990s. Overall, this study found that as Canadian Tire and the Canadian retail marketplace changed over the years, CTCs marketing strategies changed alongside, especially regarding to the objective quality, objective price, and advertising elements. 5.5 Research Contributions, Limitations, and Recommendations This section offers research contributions, limitations, and recommendations for future study. More specifically, research contributions relating to conceptual and managerial contributions are presented first. As well, three limitations relating to the 90 current study are discussed, and three future research recommendations are provided. 5.5.1 Research Contributions Firstly, this study contributed to a better understanding of how a hard goods retailer offers private labels and national brands over time. Specifically, findings from this study offered evidence of the marketing strategies (objective price, objective quality, and advertising) of private labels and national brands in certain product categories and certain products as applied by the retailer over time. Perhaps most importantly, this study offered evidence of different patterns and trends of marketing elements that existed over time for different product categories and specific products. Thus, this study indicates the importance of examining strategies at micro/macro levels and going beyond just an aggregate understanding of strategies. Furthermore, no previous study examining a hard goods retailer in the context of private labels and national brands was found, and so this study helped to address this gap. This study extends the existing literature on retailers' strategies for private labels and national brands for hard goods products during a competitive period. This study also contributed to filling this research gap by examining strategic marketing elements: objective price and objective quality. Finally, by using a case study approach along with an investigation of archival data of Canadian Tire, this study offers an in-depth understanding of a specific retailer within the context of the retail marketplace in Canada during a highly competitive period. The longitudinal nature of the CTC archival data assisted in demonstrating the changing roles of private labels and national brands for the Canadian Tire retailer over time. 91 From a managerial perspective, twenty-first century retailers could use these findings and, based on relevant understandings, could review their overall business strategies, and individual marketing elements such as quality, advertising, and pricing elements relating to private labels and national brands at the product category level and specific product level. For example, based on the findings, other retail competitors of Canadian Tire could adopt different marketing strategies such as introducing high end private label bicycles to attract value-conscious customers. It is hoped that for retailers attempting to differentiate their private labels from national brands, an understanding of the strategies adopted by the Canadian Tire during the competitive period can provide them with some assistance in formulating future price, quality, and advertising strategies. 5.5.2 Research Limitations Like all studies, this study is not void of limitations. The first limitation is that this study uses only one case, namely Canadian Tire, as the case study to analyze objective price, quality, and advertising strategies between national brands and private labels. This case may not reflect the strategies applied by other retailers in Canada or worldwide. A second limitation, in terms of archival data of Canadian Tire during a specific time period (for example, 1991 to 2001), is that the archival data does not contain all materials from CTC. It is possible that some materials may not be available for review because of restrictions in place by the company. In addition, the data gathered for this study concerned in-depth coverage of only selected product categories due to the time and resource limitations. The data collected needs to be expanded to justify a claim of a complete and comprehensive case study. 92 A third limitation is that this study was based on a single research approach: archival research. Triangulation of research methods could make this study stronger. At this point, archival primary data was complemented with external data such as newspaper reports and articles from trade magazines. However, incorporating in-depth interviews with Associate Dealers, other CTC stakeholders, could make these findings stronger and offer more insights regarding the marketing strategies of Canadian Tire over time. 5.5.3 Recommendations for Future Research This study offered a longitudinal investigation of objective quality, objective price, and advertising strategies of private labels and national brands from a retailer's perspective. The following section briefly proposes areas of future research. Firstly, as noted by the third limitation, the findings and results of the current study offered some interesting insights for the hard goods retail industry. Ideally, follow- up interviews with Associate Dealers of Canadian Tire based on the findings of the archival data research would be included in future research to strengthen the justification for the research in this area. Secondly, this study covered an 11-year period to investigate the company's private label and national brand strategies. Since Canadian Tire has created its own private label programs for decades, an extended period for investigation, such as two or four decades from the early 1970s on, may provide a better understanding of the marketing strategies. 93 Thirdly, this study offered the retailer's perspective. All the archival data investigated were from Canadian Tire. If a further qualitative approach were to follow, the incorporation of the consumer perspective would provide more insights for managers and stakeholders. For example, focus groups of CTC consumers or archival data analysis of consumer call records to service centers would offer further insights incorporating different consumers' perspectives. In summary, this research thesis contributes to knowledge about private labels and national brands from a retailer's perspective. 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Journal ofMarketing, 52 (July), 2-22. 106 REFERENCES RELATED TO CANADIAN TIRE Canadian Tire Newsletter, 1989, July, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Newsletter, 1992, Issue 1, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Newsletter, 1992, Issue 4, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Newsletter, 1994, Issue 3, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Newsletter, 1994, Issue 4, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Newsletter, 1996, Volume 2, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Newsletter, 1996, Volume 3, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Newsletter, 1998, Volume 2, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Newsletter, 1999, Volume 6, from Archives & Research Collections Centre, The University of Western Ontario, Canada. 107 Canadian Tire Annual Report, 1991, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Annual Report, 1996, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Annual Catalogue, 1992, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Annual Catalogue, 1993, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Annual Catalogue, 1994, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Annual Catalogue, 1995, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Annual Catalogue, 1996, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Annual Catalogue, 1997, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Annual Catalogue, 1998, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Annual Catalogue, 1999, from Archives & Research Collections Centre, The University of Western Ontario, Canada. 108 Canadian Tire Annual Catalogue, 2000, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Annual Catalogue, 2001, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Spring Catalogue, 1991, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Spring & Summer Catalogue, 1992, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Spring & Summer Catalogue, 1993, from Archives & Research Collections Centre, The University of Western Ontario, Canada. Canadian Tire Spring & Summer Catalogue, 1994, from Archives & Research Collections Centre, The University of Western Ontario, Canada. The Canadian Tire Heritage Collection, from Archives & Research Collections Centre, The University of Western Ontario, Canada 109 APPENDIX 1: Canadian Tire's Main Competitors Retailer Retailer Description Name Wal-mart Canada was established in Canada in 1994. It operates a growing network of 318 stores across Canada by carrying close to 80,000 different products ranging WaI- from apparel, home electronics and grocery, plus specialty services such as mart pharmacies, garden centres, tire and lube express auto centres and vision centres. Wal-mart offers everyday low price to consumers, (http://www.walmart.ca/wps- portal/storelocator/Canada-AboutWalmart.jsp) Zellers is a one of Canada's largest diversified general merchandise retailers. It is one of Hudson's Bay Company's four banners. Its store chain has 279 locations all over Canada. It offers branded apparel, improved customer service and a future roll-out of Zellers new 125,000 square foot prototype stores. It also offers customers clear value and price competitiveness on national and private brand merchandise. (http://www.hbc.com/hbc/about/default.asp) Sears Canada Inc. offers Canadian consumers a diverse array of shopping options. It has department and specialty stores, offering merchandise such as apparel and a broad range of home-related services. It also offers home appliances, tools, lawn and garden, home electronics and automotive repair and maintenance. The company is Sears also one of the nation's largest providers of home services, travel services, parts services etc. Product prices offered by Sears are in the middle class range. (http://www.sears.ca/gp/browse.html/ref=sc_bb_l_0_16378541_2/l 85-2309333- 468600 1 ?ie=UTF8&node= 1 639889 1 &no= 1 637854 1 &searsBrand=core&me=A 1 OFH FRJZ0GJG3) The Bay is the flagship department store chain within the Hudson's Bay Company. 92 Bay stores are located country wide with a dominant position in the downtown cores of Canada's major cities. The Bay is a full-line department store chain focused on The Bay high fashion merchandise in apparel, accessories and soft home categories. The Bay offers quality merchandise at mid-to-upper price points accompanied by traditional department store services. (http://www.hbc.com/hbc/about/default.asp) The Home Depot is one of the world's largest home improvement retailers. It caters to do-it-yourselfers, as well as home improvement, construction and building Home maintenance professionals. Each store stocks various building materials, home Depot improvement supplies and lawn and garden products. (http://www.homedepot.ca/communityaffairs/content/en_CA/CAOurCompany.html) RONA is one of the largest Canadian distributors and retailers of hardware renovation RONA and gardening products, (http://www.rona.ca/content/profile_profile_investor- relations) 110 APPENDIX 2: CTC Annual Catalogue Cover Page Example ¦ S J s Imm mû I Source: CTC 1995 Annual Catalogue 111 APPENDIX 3: CTC Seasonal Catalogue Cover Page Example ¡h ¦?? 1 ¡ces in effect to Scpten&er 3, )99 Source: CTC 1994 Spring & Summer Catalogue 112 APPENDIX 4: Tire Product Category: Brands and Objective Quality Element/Terminology Descriptions Brands of tire product "P205/70R14 93 S" included private label tires of various Motomaster series (Motomaster SKIlO, Motomaster AQUA PLUS, Motomaster LE, Motomaster Touring LXR, Motomaster SE, Motomaster AW+) and Predator Radial GTS, and national brand tires of various Goodyear series (for example: Goodyear Spectra, Goodyear Ventura, Goodyear Integrity, Goodyear Allegra), various BFGoodrich series (BFGoodrich Radial T/A, BFGoodrich Control T/A M65, BFGoodrich Touring T/A), and Michelin XH4 (CTC Annual Catalogue, 1903-2001). Service type: the tire size that was designed to be fitted on vehicles that are primarily used as passenger vehicles. For example, P refers "P-metric" size. (Retrieved March 26, 2010, http://www.tirerack.com/tires/tiretech/techpage.jsp?techid=46) Section width: section width of the tire in millimeters. (Retrieved March 26, 2010, http://www.tirerack.com/tires/tiretech/techpage.jsp?techid=46) Sidewall aspect ratio: the aspect ratio of the tire (the ratio of the width to the height) (Retrieved March 26, 2010, http://www.tirerack.com/tires/tiretech/techpage.jsp?techid=46) Internal construction: the internal construction identification of the tire. For example, R identities a "Radial" construction in which the tire's body plies "radiate" out from the imaginary center of the wheel (radial tires are by far the most popular type of tire today). As well, D refers to Diagonal with a "biasply" construction, and B represents "belted" construction. (Retrieved March 26, 2010, http://www.tirerack.com/tires/tiretech/techpage.jsp?techid=46) Tire and wheel diameter: the tire and wheel diameter designed to be matched together in inches. (Retrieved March 26, 2010, http://www.tirerack.com/tires/tiretech/techpage.jsp?techid=46) Tire service description: the tire's Load Index (the tire size's assigned numerical value used to compare relative load carrying capabilities, e.g., 93=1433 pounds) and Speed Rating (top speed capability of the vehicles, e.g., S= 180km/h, T= 180km/h, H=210km/h) (Retrieved March 26, 2010, http://www.tirerack.com/tires/tiretech/techpage.jsp?techid=35) Tread design: the pattern of grooves and tread elements. (Retrieved March 26, 2010, http://www.offroaders.eom/tech/AT-MT-Tires/tire-tech.htm#Tread_Design) 113 Speed rating: This is a number that corresponds to the maximum service speed for a tire. See chart below for ratings. Note: Speed ratings are specific for passenger car tires and not light truck tires. Light truck tires (LT) are not speed rated. Rating Maximum Speed 99mph 12mph 1 1 8 mph U 124 mph H 130 mph V 149 mph W 168 mph Y 186 mph Above 149 mph Disclaimer for the common sense challenged: Please note that this rating relates only to tire speed capability based on tire tires limits, and is NOT a recommendation to exceed legally posted speed limits; always drive within the legal speed limits. (Retrieved March 26, 20 0, http://www.offroaders.com/tech/AT-MT-Tires/tire- tech.htm#Speed_Rating) Whitewall: Whitewall tires or white sidewall (WSW) tires are tires having a stripe or entire sidewall of white rubber (Retrieved March 26, 2010, http://en.wikipedia.org/wiki/Whitewall_tire). Blackwall: Instead of having a stripe or entire sidewall of white rubber as whitewall tire, the blackwall tire has full carbon black. The difference between blackwall and whitewall tires is only in appearance (Retrieved March 26, 2010, http://en.wikipedia.org/wiki/Whitewall_tire). Belts: One or more rubber-coated plies (layers) of steel, polyester, nylon, Kevlar or other material running circumferentially around the tire under the tread. They are designed to reinforce body plies to hold the tread flat on the road. Belts reduce squirm to improve tread wear and resist damage from impacts and penetration (Retrieved March 26, 2010, http://www.offroaders.eom/tech/AT-MT-Tires/tire-tech.htm#Belts). Shoulder grooves: Tread grooves located at tire shoulder (Retrieved March 26, 2010, http://www.offroaders.eom/tech/AT-MT-Tires/tire-tech.htm#Belts). 114 Straight circumferential grooves: Grooves typically run circumferentially around the tire, and are needed to channel away water (Retrieved March 26, 2010, http://en.wikipedia.org/wiki/Tire). Road noise: Tire road noise is the rolling noise of the tires on the road made by motor vehicles (Retrieved March 26, 2010, http://www.conti- online.com/generator/www/com/en/continental/csr/themes/ecology/product_responsibilit y/tire_road_noise/reifengeraeusch_en.html). Centre rib: A type of tread design. Solid centre rib puts more rubber on the road and gives faster steering response. Those tires with a solid centre rib can improve steering and reduce wear. Performance rating: A rating of tire overall performance. The performance characteristics include Tread wear, dry and wet traction, Force variation, tire balance, Centrifugal growth, Rolling resistance, Stopping distance and product lifetime (Retrieved March 26, 2010, http://en.wikipedia.org/wiki/Tire). Warranty: In commercial and consumer transactions, a warranty is a collateral assurance or guarantee that certain facets of an article or service sold is as factually stated or legally implied by the seller, and that often provides for a specific remedy such as repair or replacement in the event the article or service fails to meet the warranty (Retrieved March 26, 2010, http://en.wikipedia.org/wiki/Warranty). Polyester cords: a type of material that automobile and light truck tire plies are normally constructed of (Retrieved March 26, 2010, http://www.offroaders.com/tech/AT-MT- Tires/tire-tech.htm#Belts). Tr*ad Are« Trea<* Block Q«OOV»S V : SmMJldfrr Si Cap Pfjes Steel Beits Radial PEs es Emme Chaffers Bead 115 Retrieved March 26, 2010, http://www.offroaders.com/tech/AT-MT-Tires/images/tire- elements.gif DIAMETES OF RAFiO OF HEIGHT TO WIDTH WHEe mMS RATIO 1 RAD¡AL LOAD ÍNDEX í WIDTH OF TF SPEED SYMBOl NMlLIJMiLKf U JOW ASSENGEB CARTIftE SNOA CONDfTON % A*. ¦ f MAXiOLD ^% \ INFLATION S LOAOUMIT * jíj *9»**o s r (? ¿5» £0 c« Uf "fi OC SIDEWALL ? -rt* m O MARKINGS g*m <£ * -? %¦ -r Ä «fe «è> % OF r4f TREADWAREJRACT1GN AND TEMPERATURE GRADES Retrieved March 26, 2010, http://www.tancotire.com/images/tech_tire_sidewall_marking.gif 116 APPENDIX 5: Bicycle Product Category: Brands and Objective Quality Element/Terminology Descriptions Brands of bicycle product "18-speed mountain bicycle" included private labels of different Supercycle series (for example: Supercycle Strada, Supercycle Storm, Supercycle Twister, Supercycle Breeze, Supercycle Anvil, Supercycle Bullet, Supercycle BMX-1000, Supercycle 1800S, Supercycle XTI-1 8) and national brands of various CCM series (CCM Gemini, CCM Excel, CCM Pursuit, CCM Buitz, CCM Ice, CCM Black, CCM Black Ice, CCM Aluminum, CCM Supra, CCM Shockwave Pro-Series, CCM Aluminum Pro-Series) (CTC Spring & Summer Catalogue, 1993-1994; CTC Annual Catalogue, 1995-2001). MTB: bicycle type category by sport. MTB is an abbreviation for mountain bike or mountain bicycle, which is a bicycle created and made for off-road cycling (http://en.wikipedia.org/wiki/Mountain_bike). (Retrieved March 26, 2010, http://en.wikipedia.0rg/wiki/List_0f_bicycle_types#By_sp0rt). Speed: bicycle categorized by gearing. Different gear selection for multi-speed suits the circumstance, for example, single-speed bicycles and fixed bicycles have only one gear, dérailleur gears featured on bicycles with 5 to 30 speeds (Retrieved March 26, 2010, http://en.wikipedia.0rg/wiki/List_0f_bicycle_types#By_sp0rt). Gear: A gear is a rotating machine part having cut teeth, or cogs, which mesh with another toothed part in order to transmit torque. A bicycle gear is a gear system for bicycles (Retrieved March 26, 2010, http://en.wikipedia.org/wiki/Gear). Seat: Small triangular seat attached to the bicycle's frame (Retrieved March 26, 2010, http://visual.merriam-webster.com/transport-machinery/road-transport/bicycle/parts- bicycle.php). Frame: A bicycle frame is the main component of a bicycle, onto which wheels and other components are fitted (Retrieved March 26, 2010, http://visual.merriam- webster.com/transport-machinery/road-transport/bicycle/parts-bicycle.php). Fork: Two tubes connected to the head tube and attached to each end of the front-wheel hub (Retrieved March 26, 2010, http://visual.merriam-webster.com/transport- machinery/road-transport/bicycle/parts-bicycle.php). Brakes: Bicycle brake systems are used to slow down or stop a bicycle. The three main types are: rim brakes, disc brakes, and drum brakes (Retrieved March 26, 2010, http://en.wikipedia.org/wiki/Bicycle_brake_systems). 117 Size: Normally known as frame size. Frame size was traditionally measured from the center of the bottom bracket to the center of the top tube. Typical "medium" sizes are 54 or 56 cm (approximately 21 .2 or 22 inches) for a European men's racing bicycle or 46 cm (about 18.5 inches) for a men's mountain bicycle. The wider range of frame geometries that are now made have given rise to different ways of measuring frame size; Touring frames tend to be longer, while racing frames are more compact (Retrieved March 26, 20 1 0, http://en.wikipedia.Org/wiki/Bicycle_frame#Frame_size). Grip: Known as handlebar which is a device made up of two handles connected by a tube, for steering the bicycle (Retrieved March 26, 2010, http://visual.merriam- webster.com/transport-machinery/road-transport/bicycle/parts- bicycle.php#handlebars8289). Tire: Conventional tires used on 99% of all bicycles are "clincher" type, also known as "wire-on." They consist of an outer tire with a u-shaped cross section, and a separate inner tube. The edges of the tire hook over the edges of the rim, and air pressure holds everything in place (Retrieved March 26, 2010, http://www.sheldonbrown.eom/tires.html#tires). Gender/Age: different classification of bicycles, such as Boy's or girl's; junior or adult; woman's or man's (Retrieved March 26, 2010, http://visual.merriam- webster.com/transport-machinery/road-transport/bicycle/parts-bicycle.php#water- bottle8066). Water bottle: Soft plastic container, with a quick-open cap, for drinking from (Retrieved March 26, 2010, http://visual.merriam-webster.com/transport-machinery/road- transport/bicycle/parts-bicycle.php#water-bottle8066). Water bottle cage: Known as water bottle clip which attaches to the down tube or the seat tube for carrying the water bottle (Retrieved March 26, 2010, http://visual.merriam- webster.com/transport-machinery/road-transport/bicycle/parts-bicycle.php#water-bottle- clip8051). Derailleur/Shifting system: Dérailleur gears are a variable-ratio transmission system commonly used on bicycles, consisting of a chain, multiple sprockets of different sizes, and a mechanism to move the chain from one sprocket to another (Retrieved March 26, 2010, http://en.wikipedia.org/wiki/Derailleur_gears). Rims: Metal circle constituting the wheel's circumference and on which the tire is mounted. The bicycle rim is commonly a metal extrusion that is butted into itself to form a hoop, though may also be a structure of carbon fibre composite, and was historically made of wood (Retrieved March 26, 2010, http://visual.merriam-webster.com/transport- 118 machinery/road-transport/bicycle/parts-bicycle.php#rim84 18) (http://en.wikipedia.Org/wiki/Bicycle_wheel#Rim). carrier teat hCdd lu b bual past------h crossbarcrs ü lever tuai ïlay 1J^aS=Sf== ___^/5f\ ^^G' s' brdkt: 4~T\ ' ¡.^änTbc7^·,^" —Ty-^m tiret " purn" ? * ,„-¿ÜEcr-Y/Jñ. -¦¦¦¦ - '"¦"imrtL "brake \ r rear fíe raillai. V run tire valve tO«: dip Retrieved March 26, 2010, http://visual.merriam-webster.com/images/transport- machinery/road-transport/bicycle/parts-bicycle.jpg 119 APPENDIX 6: Gas Lawn Mower Product Category: Brands and Objective Quality Element/Terminology Descriptions Brands of lawn mower product "gas lawn mower" included private labels such as Mastercraft series (series numbers 60-1670-4, 60-1671-2, 60-1656-0, 60-1678-8, 60- 1659-4, 60-1677-0, 60-1676-2, 60-1673-8, 60-1619-0, 60-1674-6, 60-1675-4, 60-1680-0, 60-1681-8, 60-1682-6, 60-1683-4, 60-1691-4, 60-1692-2, 60-1693-0, 60-1679-6, 60- 1666-6, 60-1668-2, 60-1684-2, 60-1695-6, 60-1669-0, 60-1686-8/60-1686-6, 60-1679-6, 60-1687-6, 60-1689-2, 60-1694-8, 60-1699-8, 60-1696-4, 60-1673-8), Yardworks series (series numbers 60-1606-0, 60-1611-6, 60-1607-8, 60-1610-8, 60-1609-4, 60-1608-6, 60- 1605-2, 60-1604-4, 60-1602-8, 60-1603-6, 60-1601-0, 60-1600-2, 60-1666-6), as well as national brands of Yard Machines-MTD series (series numbers 60-1666-6, 60-1652-8, 60-1677-0) and Lawn-boy series (series numbers 60-1655-2, 60-1657-8, 60-1656-0) (CTC Spring Catalogue, 1991; CTC Spring & Summer Catalogue, 1992-1994; CTC Annual Catalogue, 1995-2001). Cutting width: the width of lawn that the lawn mower cuts Height adjustment: different types of height adjustment applied to the lawn mower, for example, single-lever, 9-position etc (Retrieved March 26, 2010, http://www.lawnmowersworld.com/articles/bagging-vs-mulching.html). Function: includes mulch, rear bag, and side discharge. Mulch: grass is cut into fine clippings and returned to the lawn to act as a natural fertilizer - no bagging or raking is required. Rear bag: collects grass clippings which may be used for composting. Provides the look of a well manicured lawn. A rear-bag mower is narrower and therefore easier to manoeuvre than a side-bag mower. Side discharge: grass clipping are dispersed onto the lawn. Best for lawns with few obstacles and ideal for cutting high grass. (Retrieved June 28, 201 0, http://www.canadiantire.ca/AST/ResearchCentre/LawnMowerSpring.jsp). Horsepower/engine: the detailed engine horsepower used to the lawn mower Handle grip: a part of, or attachment to, an object that can be moved or used by hand (Retrieved June 28, 2010, h http://en.wikipedia.org/wiki/Handle_%28grip%29) Engine type: the engine source and power used for lawn mower to define the lawn mower type, for example, gasoline, electric, and reel. Most rotary push mowers are powered by internal combustion engines. Such engines can be either two-stroke or four- stroke cycle engines, running on gasoline (petrol) or other liquid fuels. (Retrieved March 26,2010, http://en.wikipedia.Org/wiki/Lawn_mower#By_rotation). Throttle/speed control: In a lawn mower engine speed control system having an actuator moving a throttle valve and a controller controlling operation of the actuator 120 such that the engine speed becomes equal to a predefined desired engine speed, it is determined whether the lawn mower is under a mowing operation based on a value indicative of a load of the engine including an operation rate or output of the engine, the desired engine speed is changed based on a result of determination, thereby enabling to lower noise, to boost fuel efficiency, and to simplify operation by making manual regulation of engine speed unnecessary, while ensuring stable operation free from engine speed variance (Retrieved March 26, 20 1 0, http://www.freepatentsonline.com/7370458.html). Wheel size: the wheel size used on the lawn mower Engine type: 6.0hp Engine displacement: 173cc Adjustable Height position: 8 levels Cutting width: 20 inch Fuel tank: 2L Oil tank: 0.65L Cutting height (high) 25.4mm~ 76.2mm Cutting height (low); 15-65mm Grass collector type: grass bag Grass collector capacity (liter):60 /V- v -V Walk style: self propelled - 55»' ¦" ¦¦¦¦:- W^-" Packing size: 830*550*470 V/ 20" ft container: 132pcs 40"GP container: 280pcs Model No.: LF733 Standard: CE/GS/ROHS Company: Long Fortune (China) Co., Ltd. Retrieved March 26, 2010, http://globaltarget.en.made-in- china.com/product/YoJQATqjJiVX/China-6-OHP-Engine-Lawn-Mower.html 121 APPENDIX 7: Advertising Page Count Examples Example 1: : . · ¦"· ¦,-¦¦,^-^-'!.w, -t -? --t- .- :: ¦ ¦¦. ._-ji-.r ? . ¦* ¦ ¦ ' ¦ ¦¦": ¦ ¦ ¦ ! Í! V - — - ¦ *-- h., ? ¦ V - ¦" ? '· *>. .W -it-· -,«,-._ • Handgrip shifter systems new • Cantilever brakes CCftï1fr«^ediCgMT8 * Handgrip tndex shifting system - Shinnario defatü^urü • Shimano dérailleurs * Cantilever brakes - Deluxe water ooitle . « Frames are DBS -welded for and ir&ïiû bdtj * 26" wboois « 10. 28 of smooth, seamless appearance 22"frames 7w»ox • Deluxe MTB saddles BIKES « Oversize, solid-end forks HWM ««Ö9S f^ffifö3gp«Sl «ese CCM 15-speed Ecco MTB · Hand-grip shifting system CCM 21-speed X-Heat MTB · Grip-shift index shifting • Shimano dérailleurs · Cantilever brakes « Deluxe water bottle - Shimano dérailleurs· Cantilever brakes · Mud guard, • Aggressive tread MTB tires · 24 or 26" wheels · 18 or 20" deluxe water bottle, frame bag · Aggressive tread MTB tires frames mbsiïX • 26" wheels · '18 or 20" frames ?i-rseex Assembly and A/cÄsfamis extra for all bikes shown on these two pages See page 231 for automotive bike racks Above advertising page example contains 0.45 page of 18-speed mountain bike of CCM national brand (CTC Annual Catalogue, 1 997, p. 178) 122 Example 2: SUPEfICYCLE - CÄMÄPÄ'S BIKE FOB 60 YEARS ' 1ÌiaaISSI" um /A N^-'jr i *>* \| íSssas^^ Umited-Edfflon Classic Cruiser. · 6-speed · Handgrip Supercycle is proud to share in Canadian Tires 7blh shifting system » Falcon dérailleur · Nostalgic-design frame anniversary. Introduced in our stores in 1937, the SuperCyde • Chromed fenders » 26" balloon tires » Men's or Women's bike has since been established as Canada's Bike. Meres to tramEs n-issx another 60 years ol the Canadian Tim-Supercycte tradition. H ^^m PKf B JFt Supercycie 12-speed Ascent MTB. · Bar-mounted friction- Supercycle IB-speed Storm MTB, »Friction shifting · Falcon shift levers · Falcon dérailleur · Caliper brakes · Unicrown forks dérailleurs · Dual sida-pull caliper brakes · Oversize frame • 24. or 26" wheels · Full reflector set · Available in Men's or • Unicrown forks · Water bótte ? 24 or 26" wheels · In Men's or Women's frames. ¦¦¦ .."-.. n-iaœx Women's frames, ji-issex- H» mutet1 lls3¿^^30sl.„... 18SS? Supercycie 18-speed Breeze MTB· Index shifting "Falcon Supercycle 18-speed Twister mountain bike. * Oversize dérailleur · Caliper brakes · Oversize frame and fork polished-chrome frame · Indexed handgrip shifting · Falcon • Water bottle « Bar ends » 24 or 26" wheels · 18 or 20" dérailleur · Caliper brakes · Water bottle »Bar ends frame. • Unicrown forks · 26" wheels · 18 or 21" frame. tmswx 'CMMDMM TIRB IARN VALUABLE OPTIONS® «HilfS ffiegf WIiM ¥©« y» THE CARB. ??d?? Above advertising page example contains 0.34 page of 18-speed mountain bike of Supercycle private label (CTC Annual Catalogue, 1997, p. 180) 123 Example 3: pwmwmmmm mrma ? PMSfflORß 748 Whiiewa Product Prca number P14S/aoR12 74S 07-1 100-2 P186/8ÛR13 7.9S 101-0 P1B5/75R14 89S 67.99 P1S5/75R14 92S 07-1103 32.88 paos/ranu ms 07-1104- P80Sr75R15 97S 07-1105.2 P215/75R15 10OS 07-1106-0 10758 Pê2&75R15102S 07-1107-fi P235/75R15 1OSS 07-1108-6 115.S9 70 SERIES P175/70R13 0M1OÍM P185/70R1 07-1110- P195/70RT4 90S" P205/70H1 07-1 1 12-4 P215/70R14 965 07-11 13-E P206/70R15 9SS '07-1114-0 108 R215/70R15 87S 07-1115-S 111 SS SERIE ¡ P206/68R15 92S°| 07-1116-6 jltft* "BtaciÏwalf » Premium touring all-season radial with wide tread, two wide steel belts and even weight distribution to help provide positive road handling • Deep shoulder grooves improve traction: in snowy, winter weather conditions • Four straight circumferential grooves around the tire tread assist in the evacuation.of water to help reduce hydroplaning in wet weather » Variable-length tread blocks help in reducing We road noise • White sidewall reverses to an attractive.black serrated sidewall » 'S' speed-rated up to 180km/h (112 mph) FREE «nS warrai Vj 1 1 h i'wi-ry Prato «id Säseek Tir»· PurcKisi- list í fesiser www» ÎÏJiOTiIT @âf@MI laWifflil J™ ns . we TOi wm teas €®m,- Sr ! APPENDIX 8: Canadian Tire Operation Overview During 1991 to 2001 Overall, the following information described some success indicators and growth of CTC during the 1991 to 2001 period. Firstly, CTC gross operating revenues are presented in the following figure, which indicates a gradual trend of growth from 1991 to 2001. Gross operating revenues in the late 1990s were significantly greater than in the early 1990s. CTC Gross Operating Revenue Growth During 1991 to 2001 Period Gross Operating Revenue ($ in thousand) 6000000 5000000 4000000 3000000 -Gross Operating Revenue ($ in 2000000 thousand) 1000000 0 ? s?s?s>s>s?s> ? ? en s? s? en s? s» s? s» ? ? Source: CTC Annual Report, 1991-2001 In addition, Net earnings per share of CTC also indicated growth, from $1.41 in 1991 to $2.25 in 2001 (see following figure). Although there was a downward trend in the early 1990s, which hit the lowest level in 1994, the earnings rebounded in 1995. The lowest level in 1994 could be reflective of investors' reaction to the economic recession and the entry of retail giant Wal-mart to Canada (Chain Store Age, 1996; McBride & Craig, 1997). Similar to the operating revenues, there was a significant increase in earnings by the end of the decade. 125 CTC_ New Ea£ningsj>e Net Earnings per Share (S) Net Earnings per Share (S) &##&##£ ^VVVN ' " " " " ~ " Source: CTC Annual Report, 1991-2001 Moreover, CTC indicated growth in its divisions such as associate stores, gas bars, and auto parts depots during 1991 to 2001. Canadian Tire associate stores increased in number from 420 to 450 across Canada (see following figure). In addition, other new divisions were also added almost every year. For example, by the end of 2002, a total of 11 gas bars, 14 car washes, 3 auto parts depots, and 12 Mark's Work Warehouse stores had been introduced by Canadian Tire (CTC Annual Report, 2002). CTC Associate Stores Across Canada durìng^Vto2^yPenad Numbers of Associate Store 455 450 445 440 435 -Numbers of Associate Store 420 H s? ? ? s?s?s?s?s?s?s?s? s? o o s?s?s?s?s?s?s?s? s? o o r-t G? (M Source: CTC Annual Report, 1991-2001 126 e (D C Ji ? ? e -a .2? C e cd '(? sa £ ce I ? ¦È ^ s a -O ?. ¦= ? -? t. _!2 -s cd -s (D (D ? > cd (D ce D * -2 Q- E -S m ? cd C 3 «S C "? (D Cd C (D O ? 6 (D O a. 3 (? >. O C a. O e c/5 C ? O ?? T3 ? cd 'C ? Oi a. -a C ? O CJ cd e ? -? ri cd ? C C > C O CJ SO O ? (D O 00 _çd os C (D Q. Qu ?3 3 3 00 -s bû C- (D cd ·» .<2 ?3 .fi -s cd ^ cd ? C O d ?? (D — ce cd ? (D (D O Q. ¦2 = £ ?) Q. CQ cd ? 3 ?3 -O C s\ C (D cd O C cd cd ? C (D (D -? -a ?" — Q. ? cd S .2 (? >? (D O ? 3 -D Os e ,? ~a O -a" ? •? ? O. ? ? p ? a. C^ (D ? e (D -s cd o (D cd a CJ •? (D .,_, -s Q. I 3 ? (D ? S- C i- e *s ? a> ? e cd ?? cd (D ? •S ,3 -4-* 60 ? C cd C ?? CU "(? ? cd cd -s ?- O * § ? ·— a. -a ? TD (D (D CJ e« e cd ? — ? C cd 3 S I ? 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