Fighting store brands through the strategic timing of pricing and advertising decisions

Producción CientíficaThis paper investigates whether manufacturers can use the timing (sequence) of their pricing and ad- vertising decisions to benefit from or to deter store brand (SB) introductions. We develop and solve six sequential game-theoretic models for a bilateral channel where different timing of these decisions are considered before and after the retailer introduces a store brand. Comparisons of equilibrium solutions across games show that the sequence of pricing and advertising decisions in the channel significantly im- pacts the profitability of a store brand entry by the retailer. Such impact depends on: (1) whether each channel member decides on pricing and advertising simultaneously or sequentially prior to the SB entry, (2) whether the timing chosen for these decisions changes following the SB introduction , and (3) the intensity of competition between the store and national brands (NB). In particular, the SB entry leads to losses for the manufacturer when the sequence of advertising and pricing decisions is kept unchanged after the SB entry even when it is much differentiated from the NB. These results offer new perspectives on the effects of store brand entry in distribution channels, and suggest that for low levels of competition intensity between the NB and the SB, the manufacturer can either prevent or benefit from the retailer’s brand given an adjustment in the sequence of the manufacturer’s decisions.MEC under projects ECO2014-52343-P and ECO2017-82227-P, co- financed by FEDER fundsJunta de Castilla y León under projects VA024P17 and VA105G18 co-financed by FEDER fund

Green product development under competition: A study of the fashion apparel industry

Motivated by the observed industrial issues, we analytically develop a fashion supply chain consisting of one manufacturer and two competing retailers and investigate how retail competition and consumer returns affect green product development in fashion apparel. In the basic model, that is, the pure “product greenness level” game, we find that the optimal greenness level of the fashion product decreases along with the level of market competition. This finding implies that a more competitive market leads to a lower optimal greenness level. We also identify that when the consumer return rate increases, the optimal product greenness level is substantially reduced. In the extended model with joint decisions on greenness and pricing, we find that the optimal product greenness level for the whole channel is always higher in the scenario when both retailers charge a higher retail price than in the case with a lower retail price. As such, the underdevelopment of green fashion products is a result of fashion industry features, such as an extremely competitive environment for green product development, relatively low retail prices for fashion products, and high consumer return rates. Therefore, fashion companies should join a co-opetition game for the green product market and simultaneously enhance their efficiency in managing consumer returns. To support our analytical findings, we conduct extensive industrial interviews with various representative companies. Based on this multi-methodological approach (MMA), this paper generates practice-relevant managerial insights that not only contribute to the literature, but also act as valuable references for industrialists

A micro-analysis of the influence of retail promotions on the healthiness of breakfast cereal purchases.

An unhealthy diet is associated with obesity, negative health outcomes and increasing public costs such as health care expenses and unemployment. A lower socio-economic status population has a higher incidence of obesity, yet it is these groups that are most susceptible to food marketing tools. One common tool are retail promotions such as temporary price reductions and multi-buy offers. This study investigates retail purchases made under different promotion types through the lens of the retailer and the consumer. The aim of the study is to examine the influence of retail promotions on sales and purchases of healthy and less healthy breakfast cereals. Further, it investigates the role of retail promotions on improving the healthiness of purchases and the evidence whether promotions can encourage healthier eating patterns. In order to achieve the above-mentioned aim, the study employs a sample from Kantar Worldpanel scanner data using Scotland as a case study across breakfast cereal purchases. The primary contribution of this study is adding knowledge to the food economics literature on the role of retail promotions and the main novelty is that the study investigates across different retail promotion types and their influence on sales as well as purchases. The study examines price and volume promotions across the perspective of retailers, consumers, and policy. Further, this study uses the UK FSA nutrient profiling score to assess the healthiness of each product in the dataset linking less healthy dietary patterns to ultra-processed foods analysing the whole food category breakfast cereals. The research results have a number of policy implications that can help shape consumer’s diets for the better through improving the market environment by promoting healthier products. The results indicate that retail promotions are more likely to be applied to less healthy breakfast cereal products across both price and volume promotions used by the retailers. Moreover, the results reveal that both retail promotions increase purchases and therefore, the consumption across households. Further, both retail promotion types decrease the overall healthiness of households encouraging the healthiest and least healthy households to purchase unhealthier breakfast cereals – therefore retail promotions impact the diet of consumers and might be one factor contributing to the obesity crisis among adults and children. Strict regulations through the UK government are necessary to have a stronger impact with policy implications identifying practical strategies and enabling healthier food shopping which will help improve consumer diets in the long term. The results clearly show the potential for promotions in a pro- health strategy and one policy approach might be to restrict retail promotions on less healthy products and at the same time encourage price reductions and multi-buy offers on healthy products only. The thesis informs on the debate of the role of different retail promotion types in unhealthy eating and provides evidence on the potential for price discounting to promote healthier eating patterns, particularly among socio-economic groups exhibiting the poorest diets