how do corporations get away with “house brands” such as Walmart having Equate products that are “Head and Shoulders” shampoo even comparing themselves to them on the bottle and are cheaper?
In: Economics
This often has benefits for the original brand too. As one can guess Head & Shoulders is rather expensive, yet effective. To truly cover the demand on the market you have to spread the supply over all levels of affordability. Thus Head & Shoulders overproduces the demand for H&S and sell the rest as bulk to Walmart for a smaller profit and a license to sell it as their house brand. This is clever on multiple levels because this way H&S can plan a constant output thus buy resources cheaper, plus they repress smaller brands from Walmart. E.g. Walmart sells three “different” shampoos: H&S for a high price, a third party brand for a reasonable price and H&S for a cheap price as their own brand. Guess who sells more shampoo to every customer group.
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