Demand Estimation at Manufacturer-Retailer Duo: A Macro-Micro Approach

This dissertation is divided into two phases. The main objective of this phase is to use Bayesian MCMC technique, to attain (1) estimates, (2) predictions and (3) posterior probability of sales greater than certain amount for sampled regions and any random region selected from the population or sample. These regions are served by a single product manufacturer who is considered to be similar to newsvendor. The optimal estimates, predictions and posterior probabilities are obtained in presence of advertising expenditure set by the manufacturer, past historical sales data that contains both censored and exact observations and finally stochastic regional effects that cannot be quantified but are believed to strongly influence future demand. Knowledge of these optimal values is useful in eliminating stock-out and excess inventory holding situations while increasing the profitability across the entire supply chain. Subsequently, the second phase, examines the impact of Cournot and Stackelberg games in a supply-chain on shelf space allocation and pricing decisions. In particular, we consider two scenarios: (1) two manufacturers competing for shelf space allocation at a single retailer, and (2) two manufacturers competing for shelf space allocation at two competing retailers, whose pricing decisions influence their demand which in turn influences their shelf-space allocation. We obtain the optimal pricing and shelf-space allocation in these two scenarios by optimizing the profit functions for each of the players in the game. Our numerical results indicate that (1) Cournot games to be the most profitable along the whole supply chain whereas Stackelberg games and mixed games turn out to be least profitable, and (2) higher the shelf space elasticity, lower the wholesale price of the product; conversely, lower the retail price of the product, greater the shelf space allocated for that product

Unplanned Category Purchase Incidence: Who Does It, How Often, and Why

Unplanned category purchase incidence is an important source of retailer volume and profits. We analyze this phenomenon in detail with a multi-level Poisson model calibrated on data from 434 households making over 18,000 purchases in 58 categories across 3,000 trips to 21 stores. We find that unplanned category purchase incidence is not proportional to the number of categories bought, and not a single shopping trip is completely unplanned. The majority of variation is across shoppers. Specifically, it is explained in part by demographic variables traditionally measured by marketers, but more by other traits that reflect long-run shopping habits such as level of planning and information gathering styles. Short term shopping goals (e.g., major trip, forgotten needs, etc.) also play an important role. We replicate classic results of time available (more unplanned purchasing) and high store knowledge (less unplanned purchasing); however we find that the overall occurrence of unplanned purchasing is significantly lower than that commonly reported

Heuristiken im Service Operations Management

This doctoral thesis deals with the application of operation research methods in practice. With two cooperation companies from the service sector (retailing and healthcare), three practice-relevant decision problems are jointly elicited and defined. Subsequently, the planning problems are transferred into mathematical problems and solved with the help of optimal and/or heuristic methods. The status quo of the companies could be significantly improved for all the problems dealt with.Diese Doktorarbeit beschäftigt sich mit der Anwendung von Operation Research Methoden in der Praxis. Mit zwei Kooperationsunternehmen aus dem Dienstleistungssektor (Einzelhandel und Gesundheitswesen) werden drei praxisrelevante Planungsprobleme gemeinsam eruiert und definiert. In weiterer Folge werden die Entscheidungsmodelle in mathematische Probleme transferiert und mit Hilfe von optimalen und/oder heuristischen Verfahren gelöst. Bei allen behandelten Problemstellungen konnte der bei den Unternehmen angetroffene Status Quo signifikant verbessert werden

Win-Win Strategies at Discount Stores

An important development that contributes to store brands’ growing success in the grocery market is the increasing number of discount stores that sell predominantly own, private-label, brands. To fight private labels, manufacturers of national brands feel increasingly compelled to develop better trade relations with discounters. Some discounters, from their part, are looking for opportunities to differentiate themselves, and to move beyond a pure price-based competition, by extending their assortment with attractive national brands. In this study, we determine what factors drive national-brand success at discount stores, and lead to positive outcomes for both the manufacturer and the discounter

Can in-store displays improve category sales and brand market share in online stores? A study on the overall effectiveness and differences between display types in an online FMCG context.

Our study investigates the overall effects of in-store displays (ISD) on category sales and brand market share in an online shopping context, and compares the differences in effectiveness between ISD types. Using data from an online grocer, we examine three online ISD types that match with traditional ones: first screen (entrance), banner (end-of-aisle) and shelf tag (in-aisle) displays. Empirical results for 10 categories confirm that online ISD may substantially increase brand market share and to a lesser extent, category sales. Our results also demonstrate that not all types are equally effective. First screen displays clearly have the strongest effect on market share: they benefit from their placement on the ‘entrance’ location, central on-screen position and direct purchase link. While they only feature 1 SKU, banner displays typically feature all SKUs of a brand, yet, are placed on border-screen positions on traveling-zone pages without a direct purchase link. Based on our results, the advantage of banner displays does not weigh up against the advantages of first screen displays in most cases. Shelf tags, finally, may be very useful in attracting attention to interesting promotions, but appear to have no or at most a limited effect on their own.in-store displays; online grocery shopping; market response analyses;

Can in-store displays improve category sales and brand market share in online stores? A study on the overall effectiveness and differences between display types in an online FMCG context

Our study investigates the overall effects of in-store displays (ISD) on category sales and brand market share in an online shopping context, and compares the differences in effectiveness between ISD types. Using data from an online grocer, we examine three online ISD types that match with traditional ones: first screen (entrance), banner (end-of-aisle) and shelf tag (in-aisle) displays. Empirical results for 10 categories confirm that online ISD may substantially increase brand market share and to a lesser extent, category sales. Our results also demonstrate that not all types are equally effective. First screen displays clearly have the strongest effect on market share: they benefit from their placement on the ‘entrance’ location, central on-screen position and direct purchase link. While they only feature 1 SKU, banner displays typically feature all SKUs of a brand, yet, are placed on border-screen positions on traveling-zone pages without a direct purchase link. Based on our results, the advantage of banner displays does not weigh up against the advantages of first screen displays in most cases. Shelf tags, finally, may be very useful in attracting attention to interesting promotions, but appear to have no or at most a limited effect on their own.marketing ;