Outsourcing Retail Pricing to a Category Captain: The Role of Information Firewalls

Vincent R. Nijs (), Kanishka Misra () and Karsten Hansen ()
Additional contact information
Vincent R. Nijs: Rady School of Management, University of California, San Diego, La Jolla, California 92093
Kanishka Misra: Stephen M. Ross School of Business, University of Michigan, Ann Arbor, Michigan 48109
Karsten Hansen: Rady School of Management, University of California, San Diego, La Jolla, California 92093

Marketing Science, 2014, vol. 33, issue 1, 66-81

Abstract: It has been argued that retailers lack both the resources and capabilities to maximize category performance. Retailers may seek category management (CM) advice from a manufacturer, referred to as a category captain (CC). A CC's recommendations affect all brands in the category, not just her own. Despite an increase in the number of CC collaborations, retailers are still concerned about manufacturer opportunism and militant behavior by manufacturers not selected as CCs, whereas government agencies are worried about anticompetitive behavior that could harm consumers. The Federal Trade Commission recommends strictly enforced information firewalls within a CC's organization as a best-practice guideline. In this study we develop an empirical model and use policy simulations to quantify the impact of CC arrangements with information firewalls on retailers, manufacturers, and consumers. We show how these effects could be influenced by the (de)activation of vertical and horizontal information firewalls within the CC's organization.

Keywords: category captains; information firewalls; public policy; retail pricing; price coordination; consumer welfare; competition; category management (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://dx.doi.org/10.1287/mksc.2013.0822 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormksc:v:33:y:2014:i:1:p:66-81

Access Statistics for this article

More articles in Marketing Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().