Integrating and Extending Research
Edited by Ada Scupola and Lars Fuglsang
Robert D. Hisrich and Veland Ramadani
A Practical Managerial Approach
Robert D. Hisrich and Veland Ramadani
Edited by Katrijn Gielens and Els Gijsbrechts
Jan-Benedict E.M. Steenkamp
Emerging in post-war Europe as small austere stores, carrying a lean selection of private-label items displayed in their shipping cartons, hard discounters nowadays no longer operate at the fringes of the modern Western retailscape. Instead, they have become true value innovators, and a serious threat to full-service retailers. This chapter documents the rise and success of hard discounters. After characterizing the format, it explores the reasons behind their growing success: next to stagnating incomes, recessions and the smart shopping phenomenon; these include the development of hard discount banner names into brands in their own right that signal high quality, easy decision-making and a satisfactory shopping experience. The chapter discusses the future outlook for the format, and assesses the consequences for full-service retailers and manufacturer brands.
Murali K. Mantrala and Omid Kamran-Disfani
This chapter focuses on two important contemporary concepts and practices within the realm of manufacturers–retailer relationships and strategic interactions: Category Management (CM) and Category Captainship (CC). Category management is a managerial philosophy and organizational concept in retailing that shapes a retailer’s tactical and store-level decisions. At the heart of this management and organizational practice is understanding and treating product categories as strategic business units. This chapter discusses (evolutions in) the CM process, and how CM impacts the main actors of consumer packaged goods marketing channels – manufacturers, retailers, and consumers. It reviews the advantages and drawbacks of the phenomenon of category captainship within the CM movement, as reflected by its predicted and observed impacts on the retailer, the category captain, consumers, and competing manufacturers using the common retailer. Finally, it considers the outstanding managerial questions in today’s retailing environment and outlines related avenues for future research and changes in practice.
Edward J. Fox
A growing body of research suggests that people in developed countries face too many choices, choices they would be better off avoiding. Yet people continue to find choice inherently attractive and are drawn to stores that offer more product alternatives from which to choose. This chapter reviews evidence that people seek, construct, and preserve choices when shopping for and consuming products. Uncertainty about their future preferences leads people to prefer flexibility as a rational hedge. As a result, consumers do not simply choose their favorite products. The author explores the dynamics of three different choice levels. First, he shows that store choice requires anticipation of subsequent product choices – this is well understood and non-controversial. He further shows that product choices made in-store require anticipation of how those products will be consumed at home – this is less well understood as the literature evolves. Finally, he presents evidence that consumption choices themselves require anticipation of future consumption choices, which will be made from the products that remain in inventory.
Traditional belief holds that store brands are simply low-priced alternatives offered to consumers with the sole and explicit purpose of switching them from national brands to the retailer’s store brand. In reality, store brands play several fairly distinct roles depending on the nature of consumers in the market. Associated with these roles is a set of strategies that retailers can adopt with respect to their brands. A formal understanding of the various roles, conditions, and the related strategies will enable retailers to appropriately implement their private label programs and national brand managers to better manage their brands in response to the strategies adopted by the store brands. In this chapter, a framework is developed for classifying consumers into four segments based on their preferences for national brands and store brands. This framework simultaneously takes into account supply and demand conditions for national brands and store brands. It gives rise to 15 consumer preference distributions, which describe the consumer markets that retailers can potentially face. For each consumer market, the author discusses feasible store-brand strategies based on three criteria: (i) whether the store brand(s) deployed is standard, economy, premium, or niche private label, or a combination; (ii) whether the intended role of the store brand vis-à-vis national brands is no switching, low switching, high switching, or total switching; and (iii) whether the intended role of the store brand from a category perspective is no expansion, low expansion, or high expansion.
Werner Reinartz and Peter Linzbach
Having a loyal customer base is a critical success factor for any firm or business. So, what can retailers do to bond their traditional customers, and keep them satisfied? What makes and keeps customers loyal? Are more intensive customer relationship management (CRM) initiatives like reward or affinity programs an efficient and suitable response, or will the economic change in the industry and the technical innovations force and allow for new and different approaches? This chapter identifies the drivers of customer loyalty and engagement, and considers how CRM systems in combination with a reward program can foster such loyalty. It also lists current trends in reward program design as well as digital solutions to loyalty erosion.