Category Captainship vs. Retailer Category Management under Limited Retail Shelf Space

Kurtuluş, Mümin; Toktay, L. Beril

doi:10.1111/j.1937-5956.2010.01141.x

Cited by 73 publications

(64 citation statements)

References 15 publications

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“…In contrast, a manufacturer follows the objective of brand profit optimization, which raises the topic of ''category captainship'' (cf e.g., Kurtulus and Toktay 2011;Martínez-de Albéniz and Roels 2011). A comprehensive study will need to address all the relevant subjects of negotiation between manufacturers and retailers, such as assortment, prices and shelf space.…”

Section: Discussionmentioning

confidence: 99%

Effect of replenishment and backroom on retail shelf-space planning

Hübner

Schaal

2017

Bus Res

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Shelf-space optimization models support retailers in making optimal shelf-space decisions. They determine the number of facings for each item included in an assortment. One common characteristic of these models is that they do not account for in-store replenishment processes. However, the two areas of shelf-space planning and in-store replenishment are strongly interrelated. Keeping more shelf stock of an item increases the demand for it due to higher visibility, permits decreased replenishment frequencies and increases inventory holding costs. However, because space is limited, it also requires the reduction of shelf space for other items, which then deplete faster and must be reordered and replenished more often. Furthermore, the possibility of keeping stock of certain items in the backroom instead of the showroom allows for more showroom shelf space for other items, but also generates additional replenishment costs for the items kept in the backroom. The joint optimization of both shelf-space decisions and replenishment processes has not been sufficiently addressed in the existing literature. To quantify the cost associated with the relevant in-store replenishment processes, we conducted a time and motion study for a German grocery retailer. Based on these insights, we propose an optimization model that addresses the mutual dependence of shelf-space decisions and replenishment processes. The model optimizes retail profits by determining the optimum number of facings, the optimum display orientation of items, and the optimum order frequencies, while accounting for space-elasticity effects as well as limited shelf and backroom space. Applying our model to the grocery retailer's canned foods category, we found a profit potential of about 29%. We further apply our model to randomly generated data and show that it can be solved to optimality within very short run times, even for large-scale problem instances. 123Business Research (2017) 10:123-156 DOI 10.1007 replenishment cost on retail profits and solution structures. Based on the insights gained from the application of our model, the grocery retailer has decided to change its current approach to shelf-space decisions and in-store replenishment planning.

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Section: Discussionmentioning

confidence: 99%

Effect of replenishment and backroom on retail shelf-space planning

Hübner

Schaal

2017

Bus Res

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“…Amrouche and Zaccour [13] and Li et al [16] study the shelf space allocation and pricing decisions in the marketing channel by applying static and dynamic games. Kurtuluş and Toktay [17] construct a supply chain with two manufacturers and one retailer and study a three-stage sequential dynamic game. They demonstrate that a retailer, acting as the leader in the supply chain, can use category management and categorize shelf space to control the intensity of competition between manufacturers.…”

Section: Mathematical Problems In Engineeringmentioning

confidence: 99%

“…∈ (0, 1) denotes the cross-price competition between the NB and SB. and are the reference prices for each, respectively, which is a common assumption in the literature (see [12,17,25]). In addition, the demand for each brand increases in its proportion of shelf space.…”

Section: The Modelmentioning

confidence: 99%

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Introduction of Store Brands Considering Product Cost and Shelf Space Opportunity Cost

Duan

Mao

Huo

2018

Mathematical Problems in Engineering

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This paper studies the introduction of store brands (SBs) when the product cost, shelf space opportunity cost, and baseline sales are taken into consideration. We construct a Stackelberg model in which one retailer, acting as the leader, sells a national brand (NB) and its SB and maximizes the category profit by allocating shelf space and determining the prices for the SB and NB products. Meanwhile, an NB manufacturer, acting as the follower, maximizes its profit based on the decisions of the retailer. Our results demonstrate that the product cost of the SB (NB) and the shelf space opportunity cost are the dominating factors that determine the optimal pricing strategy. If the two costs are low, then the optimal pricing strategy is the me-too strategy (competitive strategy); otherwise, the optimal pricing strategy is the differentiation strategy. There exists a threshold of the product cost, shelf space opportunity cost, and baseline sales to decide the pricing strategy and introduction of SB.

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“…Gruen and Shah (2000, p. 484) define a category as "a distinct and manageable group of products that customers perceive as being related and/or substitutable in meeting their needs". Thus, a product category is a set of products or services that consumers perceive as being complementary or substitutes in what regards the satisfaction of certain consuming needs (Alvarez, 2008;Kurtulus & Toktay, 2011).…”

Section: Introductionmentioning

confidence: 99%

Shopper Centric Category Management in Convenience Stores: a Qualitative Study

Silveira¹,

Marreiros²

2016

European Proceedings of Social &Amp; Behavioural Sciences

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The literature shows that category management is an important concept and tool for retailers and suppliers, but that there is a trend to move to a more shopper-centric category management approach, linked to the shoppermarketing approach. However, the knowledge on this issue is scarce on some retailing sectors, like convenience stores. The present study is focused on convenience stores, with the main purpose of finding out to what extent non-major food retailers successfully adopt a shopper-centric category management. The study is relevant in order to evaluate if a more shopper-centric approach is adequate to smaller companies/stores. To accomplish that goal, an exploratory qualitative study was conducted among convenience store retailers and suppliers. Six semistructured face-to-face interviews were conducted with Commercial Directors and Trade Marketing Managers. This data was complemented with thirteen interviews with shopper marketing experts. The data was analyzed using thematic content analysis technique, identifying themes, categories, subcategories, units of meaning and relations. The results revealed that convenience store retailers use some of the principles and techniques of the shopper-marketing and shopper-centric category management approaches, which they do in a non-standardized and non-formal approach or process. Their suppliers (the manufacturers) do it in a more formal and structured manner, probably as a result of previous interaction with major supermarkets chains. Both direct and indirect evidences of a shopper-centric approach were found, which, however, were slight, discrete and not formal.

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Category Captainship vs. Retailer Category Management under Limited Retail Shelf Space

Cited by 73 publications

References 15 publications

Effect of replenishment and backroom on retail shelf-space planning

Effect of replenishment and backroom on retail shelf-space planning

Introduction of Store Brands Considering Product Cost and Shelf Space Opportunity Cost

Shopper Centric Category Management in Convenience Stores: a Qualitative Study

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