Tag Archives: retailer

  • Relating Price Sensitivity to Retailer Promotional Variables and Pricing Policy: An Empirical Analysis

    Shankar_Krishnamurthi_JR_1996

    by Venkatesh Shankar and Lakshman Krishnamurthi

    This article was published in the Journal of Retailing, 72 (3, 1996), 249-272.

    There is substantial evidence for variation in price sensitivity of products across stores and chains.  Understanding the relationships between price sensitivity and promotional variables (such as price cut, feature advertising, and display), and between price sensitivity and pricing policy (Everyday Low Pricing [EDLP] and High Low Pricing [HLP]) is particularly important to retailers.  We develop hypotheses on the relationships between regular price elasticity and retailer promotional variables, and between regular price elasticity and retailer pricing policy.  We test these hypotheses by analyzing the variation of regular price elasticity of a frequently purchased consumer packaged brand across stores, both within and across chains, through a multistage regression analysis.  In the first stage of our analysis, we use a mixed double-log model to estimate the sales response function for the brand in each store using time series data.  In the second stage, we explain the differences in the estimated regular price elasticities across stores within a chain by a process function model.  In the final stage, the differences across all stores and chains are explained through an aggregate process function model.  We extend the literature by separating regular (long-run) price elasticity from promotional (short-run) elasticity, and by studying the influence of both strategic and tactical retailer variables on regular price elasticity in a single framework within and across chains.  Our results for the brand analyzed show that a higher level of display and feature advertising together is associated with a lower level of regular price elasticity in EDLP stores and that an EDLP policy is associated with a higher level of regular price elasticity, whereas an HLP policy is related to a lower level of regular price elasticity.

  • Innovations in Shopper Marketing: Current Insights and Future Research

    Shankar Inman Mantrala…JR 2011

    by Venkatesh Shankar, J. Jeffrey Inman, Murali Mantrala, Eileen Kelley, and Rozz Rizley

    This article was published in the Journal of Retailing, 87S (1, 2011), S29-S42.

    Shopper marketing refers to the planning and execution of all marketing activities that influence a shopper along, and beyond, the entire path-to-purchase, from the point at which the motivation to shop first emerges through to purchase, consumption, repurchase, and recommendation. The goal of shopper marketing is to enable a win-win-win solution for the shopper-retailer-manufacturer. Shopper marketing has emerged as a key managerial practice among manufacturers and retailers, who are eagerly embracing innovations in the different aspects of shopper marketing. We review current and potential innovations in shopper marketing. We identify the managerial challenges to achieving new win-win-win solutions among shoppers, manufacturers, and retailers in shopper marketing and outline future scenarios and research issues related to these challenges.

  • An Empirically Derived Taxonomy of Retailer Pricing and Promotion Strategies

    Bolton_Shankar_JR_2003

    by Ruth N. Bolton and Venkatesh Shankar

    This article was published in the Journal of Retailing, 79 (2003), 213-224.

    Most research categorizes grocery retailers as following either an EDLP or a HiLo pricing strategy at a store or chain level, whereas this paper studies retailer pricing and promotions at a brand-store level. It empirically examines 1,364 brand-store combinations from 17 chains, 212 stores and six categories of consumer package goods in five U.S. markets.  Retailer pricing and promotion strategies are found to be based on combinations of four underlying dimensions:  relative price, price variation, deal intensity and deal support.  At the brand-store level, retailers practice five pricing strategies, labeled exclusive, moderately promotional, HiLo, EDLP, and aggressive pricing.  Surprisingly, the most prevalent pricing strategy is characterized by average relative brand price, low price variation, medium deal intensity, and medium deal support.  The findings provide some initial benchmarks and suggest that retailers should closely monitor their competitors’ price decisions at the brand level.

  • Cross-Category Effects of Aisle and Display Placements: A Spatial Modeling Approach and Insights

    Bezawada_Balachander_Kannan_Shankar_JM_2009

    by Ram Bezawada, S. Balachander, P.K. Kannan, and Venkatesh Shankar

    published in the Journal of Marketing, 73 (May 2009), 99-117.

    Amid growing competition, retailers are increasingly interested in more effective aisle and display management strategies. These strategies involve placements of product categories in aisles and displays within each store to facilitate greater sales affinity (demand attraction) between categories to improve the store’s share of the customer wallet. We investigate the effects of aisle and display placements on the sales affinities between categories. We develop a spatial model of brand sales that allows for asymmetric store-specific affinity effects between two or more categories, while controlling for the effects of traditional merchandising and marketing mix variables, such as price, feature and display. We estimate the model on aggregate store-level data for regular cola and regular potato chip categories for a major retail chain, using hierarchical Bayesian methods. We show the usefulness and extension potential of the model through simulation of aisle placements for a third category. Our results show that aisle and display placements have significant and sizeable asymmetric effects on cross-category sales affinities comparable to those influenced by marketing mix variables. Retail managers can use our detailed store-level model and insights to develop customized aisle and display management for their individual stores.

    Bezawada_Balachander_Kannan_Shankar_JM_2009

  • Store Shelf Strategy

    The effect of aisle adjacency and display of one product category on the sales of another.

    http://www.youtube.com/watch?v=NZca5-bkKYw

  • Shopper Marketing

    by Venkatesh Shankar

    http://www.msi.org/books/shopper-marketing/

    http://www.amazon.com/Shopper-Marketing-Relevant-Knowledge-Series/dp/0982387733 

    This book in MSI’s Relevant Knowledge Series will help managers think systematically about shopper marketing challenges and opportunities. By defining shopper marketing to encompass all marketing activities that influence a shopper along, and beyond, the path-to-purchase, Shankar provides a unified framework for manufacturer and retailer collaboration. He encourages a “win-win” perspective in which manufacturers and retailers align their marketing activities to meet shopper needs and build better relationships with customers. 50 pages.

    Contents: 1.  What Is Shopper Marketing? 2.  Research Insights about Shopper Behavior 3.  Industry Practices 4.  Implications of Shopper Marketing Insights for Manufacturers and Retailers 5.  Emerging Trends and Underexplored Issues and Questions