How Point-of-Sale Marketing Mix Impacts National-Brand Purchase Shares

Minha Hwang () and Raphael Thomadsen ()
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Minha Hwang: McGill University, Montreal, Quebec H3A 0G4, Canada
Raphael Thomadsen: Washington University in St. Louis, St. Louis, Missouri 63130

Management Science, 2016, vol. 62, issue 2, 571-590

Abstract: Purchase shares of major national brands in consumer packaged-goods industries vary substantially across stores, both between geographic markets and across stores within markets. We measure the relationship between the variation in national-brand purchase shares and five store-specific marketing mix factors: prices, assortment shares, features, displays, and promotion intensity. We do this by first demonstrating the extent to which purchase shares of the top two national brands across six different categories vary across markets, accounts (defined as chain–market interactions) and stores: market-level variation accounts for approximately 30% of the weekly purchase share variation across stores, whereas account-level and store-level variation explain an additional 13% and 5% of the variation, respectively. We then measure the extent to which assortment, pricing, feature, display, and promotion activities affect the purchase shares of the top national brands. We find that price and assortment share are the two most important point-of-sale factors in determining a brand’s purchase share. We also examine how the proximity to a brand’s city of origin, the assortment share of a store’s private label, the extent of retail competition, and the demographics of the store’s neighborhood affect the purchase share’s sensitivity to the point-of-sale marketing mix, revealing several subtle effects. Finally, we measure the extent to which the variation in top national-brand purchase shares is explained by these five factors. We find that, on average, approximately 56% of the variation in national-brand purchase shares can be attributed to these five factors. These results demonstrate the potential importance of trade marketing on a brand’s purchase shares. This paper was accepted by J. Miguel Villas-Boas, marketing .

Keywords: retailing; brand market share; assortment; supermarket; distribution; consumer packaged goods (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:62:y:2016:i:2:p:571-590

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