Assortment Choice in Wholesale and Retail Marketing

Balderston, Frederick E.

doi:10.1177/002224295602100207

Cited by 13 publications

(9 citation statements)

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“…Conversely, Kmart has low consistency due to its noncomplementary merchandise mix. Using consistency and related constructs from the literature, such as consumption activities for "commodities or use" (Betancourt and Gautschi 1990), "use complements" (Balderston 1956;Mulhern and Leone 1991), "classification dominance" (Davidson, Doody, and Sweeney 1975;Hirschman 1978), "product/generic markets" (Day, Shocker, and Srivastava 1979;Perreault and McCarthy 1996;Srivastava, Alpert, and Shocker 1984) and "broad/detailed lines" (U.S. Census of Retail Trade 1992), three types of retail stores emerge: limited-line specialists, broad-line specialists, and general merchandisers.…”

Section: General Merchandisermentioning

confidence: 99%

The Effects of Competition on Retail Structure: An Examination of Intratype, Intertype, and Intercategory Competition

Miller

Reardon

McCorkle

1999

Journal of Marketing

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Discount retailers and "category killers" are believed to be so detrimental to the existing retail environment that many communities have fought their entry through zoning and other regulations. However, the authors suggest that the patterns of competition among different types of retailers are more complex than previously believed. To understand this complexity better, they explore the cross-sectional relationship of competition and retail structure for different types of retailers. Contrary to popular opinion, the findings suggest a positive association between the number of larger stores and the number and size of smaller stores. This implies a mutually beneficial relationship among different types of retailers rather than an overwhelming competitive advantage for larger stores.The mass merchandisers of retailing-Wal-Mart, Kmart and Target-and categorykillers-Toys 'R Us, Home Depot and Blockbuster Video-are infiltrating small-town America and beyond. These price choppers, which practice a scorched-earth policyof retailing, are puttinga lot of smaller retailers in danger-if not out of business (Me-Cune 1994, p. 10).T he preceding quotation represents the popular view of the entry of larger retailers into a market. This view is expressed through the trade, academic, and popular presses, with Wal-Mart and large category killers taking the brunt of the attack. However, several theories and anecdotal evidence suggest the opposite. Although the main thrust of this attack relates to the effect of larger retail entrants on small stores, there is ample evidence that retail competition affects everyone in the distribution channel.Channel members that previously largely controlled the distribution channel now need strategies for dealing with a changing retail structure. For example, Levi Strauss and Company announced that it would expand its distribution to mass marketers and limit supply to smaller stores ("It's Back to Basics for Levi's" 1982). Other manufacturers, such as Procter & Gamble, PepsiCo, and H.I. Heinz, are having difficulty dealing with private branding by large discount stores and supermarkets (Sellers 1993). Likewise, wholesalers suffer when large retail entrants bypass local wholesale channels.Retail structure also directly involves consumers. Consumers tailor their shopping habits to reflect both time needs Chip E.Miller isAssociate Professor ofMarketing, School ofBusiness, Pacific Lutheran University. JamesReardon is Norwest Professor ofMarketing, Kenneth W. Monfort College of Business, University of Northern Colorado. Denny E. McCorkle is Professor ofMarketing, Southwest Missouri StateUniversity. Theauthors thank Chuck Ingene andthe anonymous JM reviewers for their extensive comments and suggestions on previous drafts ofthis article.

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Section: General Merchandisermentioning

confidence: 99%

The Effects of Competition on Retail Structure: An Examination of Intratype, Intertype, and Intercategory Competition

Miller

Reardon

McCorkle

1999

Journal of Marketing

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“…However, whereas customers are almost always better off with greater variety (cf. Huffman and Kahn 1998), firms have to balance the demand side against the supply side (Balderston 1956). Offering more varied assortments increases R&D, manufacturing, distribution, and sales costs.…”

Section: Introductionmentioning

confidence: 99%

The Variety of an Assortment

1999

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Consumers rank variety of assortment right behind location and price when naming reasons why they patronize their favorite stores. Consumers care about variety because they are more likely to find what they want when going to a store that offers more varied assortments. When tastes are not well formed or are dynamic, perceived variety matters even more because of the desire to become educated about what is available while maintaining flexibility. Variety perception also matters when the variety-seeking motive operates. Retailers care about variety because customers value variety. Therefore, it is important to understand how people perceive the variety contained in an assortment and how these perceptions influence satisfaction and store choice. Remarkably, except for a recent study by Broniarczyk et al. (1998), there has been no research aimed at understanding the variety perception process itself. We offer a general mathematical model of variety based on the information structure of an assortment, defined both by the multiattribute structure of the objects and their spatial locations. We impose a psychologically plausible set of restrictions on the general model and obtain a class of simpler estimable models of perceived variety. We utilize the model to develop assortments that vary widely in terms of their information structure and study the influence of three factors on variety perceptions: (a) information structure of each assortment (i.e., the attribute level differences between objects); (b) level of organization of the objects and hence their relative spatial positions; and (c) task orientations, promoting either analytic or holistic processing. We also investigate the influence of variety perception and organization on stated satisfaction and store choice. To summarize our major findings: 1. Information structure has a big impact on variety perceptions, though diminishing returns accompany increases in the number of attributes on which object pairs differ. 2. People are more influenced by local information structure (adjacent objects) than nonlocal information structure. Proximity matters. 3. Organization of the display can either increase or decrease variety perceptions. When people engage in analytic processing, organized displays appear to offer more variety. When processing is holistic, random displays are seen as more varied. 4. Both variety perceptions and organization drive stated satisfaction and store choice. People are more satisfied with and likely to choose stores carrying those assortments that are perceived as offering high variety and that are displayed in an organized rather than random manner. Our work provides a basic framework for thinking about variety. By helping retailers to understand the factors that drive variety perception, it may be possible to design more efficient, lower cost assortments without reducing variety perceptions and the probability of future store visits.Assortment, Hamming Distance, Store Choice, Variety

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“…Complexity and assortment have engaged scholars of both the downstream marketing channel (Balderston, 1956) and the upstream supply chain (e.g., Pagh and Cooper, 1998). Assortment and complexity increase customer satisfaction, but they become a negative for the upstream supply chain that has multiple stockkeeping units and wants to keep track of different suppliers for different components (Novak and Eppinger, 2001) or maintain a balance between utility and complexity (Dellaert and Stremersch, 2005).…”

Section: The Moderating Effect Of Complexitymentioning

confidence: 99%