Edward W. McLaughlin

A model of consumer perceptions and store loyalty intentions for a supermarket retailer

Abstract Slow growth and intense competition in retail markets in recent years increases the need for retailers to use strategies focused on retaining and attracting the right customers. However, a strategy that is effective in acquiring new customers may not be the most effective in retaining current customers. In order to understand the effectiveness of activities designed to retain customers, we study the store loyalty intentions of current customers for a multi-store grocery retailer. Using Partial Least Squares, on data averaged across at least 100 customers per store for each of about 160 stores, we find that service quality is by far the most critical determinant of merchandise quality perception. Perceivged value for money depends on perceived relative price and sales promotion perceptions, and to a lesser extent on service quality and merchandise quality perceptions. Store loyalty intentions, measured by intent to continue shopping, intent to increase purchases and intent to recommend the store, depend on service quality and merchandise quality perception. By separating the stores according to average consumer perceptions of competitor attractiveness, we further find that perceived value does play an important role in the determination of store loyalty intention if there is a high degree of competitor attractiveness. When this attractiveness is low, our results fail to show a relevance for perceived value for money.

The Strategic Role of Supermarket Buyer Intermediaries in New Product Selection: Implications for Systemwide Efficiency

Based on logistic regression models that describe the accept/reject decisions of supermarket buyers for new products and market performance of accepted products, the implications for systemwide efficiency of decision making by channel intermediaries are analyzed. The statistical models perform very well. The results point to areas where systemwide performance may be enhanced regarding the allocation of new product development resources. For example, the system may be potentially more efficient if manufacturers reallocate the promotional allowances directed to the retail trade. Better prediction by retail buyers of ultimate product preference by their consumers is likely to increase both firm and system efficiency.

Empirical analysis of budget and allocation of trade promotions in the U.S. supermarket industry

Using a unique data set, the authors examine the role of manufacturer and retailer characteristics in the joint determination of trade promotion budgets for supermarket brands and their allocation across trade promotion types. They find that manufacturer variables, such as brand position in retailer product category and brand price premium, and annual retailer sales determine trade promotion budgets. Furthermore, retail companies with larger shares of private labels in product category sales, larger annual sales, and stronger brand positioning are able to increase the allocation of promotional funds to off-invoices and decrease allocation to performance-based trade promotions, such as scanbacks/ accruals and billbacks. Manufacturers with formal trade promotion policies tend to decrease allocation to off-invoices. The authors discuss marketing policy implications of this study and provide research directions.

Taxing Food and Beverages: Theory, Evidence, and Policy

We developed a theoretical framework to examine the effect of a change in sales or excise tax on food and beverage demand after considering that consumers may have imperfect tax knowledge, are sometimes inattentive to sales tax, may not be informed of a sales tax change, and pay no sales tax on eligible food or beverages if using food stamps. We conducted simulations to assess how much the sales tax elasticity of demand should be adjusted downward from the price elasticity of demand and quantified the advantage of using an excise tax as an anti-obesity policy. Copyright 2013, Oxford University Press.

The year 2000: A food industry forecast

This study forecasts future trends and likely developments in the food industry and serves as a planning tool for manufacturers, retailers, and others interested in food system evolution. A Delphi study is used to forecast the future of the food system in four major areas: supermarket sales distribution, technological developments, operational developments, and structural developments. The study indicates a growth in the sales share of fresh, branded foods and an increased use of technology in customer service.

Buying and Selling practices in the fresh fruit and vegetable industry in the USA: a new research

This paper proposes a research agenda based on the current buying and selling practices of the channel members in the USA fresh fruit and vegetable industry. The key buying and selling were first identified in an industrywide survey that represented approximately 75 per cent of the total sales of USA supermarket chains. The likely growth of supermarket fresh fruit and vegetable sales is discussed, followed by a series of suggested research inquiries organized into four major categories: system structure, vertical co-ordination, produce/supplier attributes and pricing/performance. New empirical evidence is introduced for each category and research questions and procedures are put forth. This research is required as both consumers and retailers around the world put more emphasis on fresh foods.

New product procurement behavior of us supermarket chains: Implications for food and agribusiness suppliers

The introduction of new products to US supermarket chains represents a strategic area of business conduct with significant economic implications for agribusiness companies, food manufacturers and retailers, and consumers. Development of new products by manufacturers and their subsequent evaluation by retailers absorbs enormous resources in the grocery distribution system. This research examined new product buying practices in the top 200 US supermarket chains. Typical findings show the reasons that nearly 70% of all newly introduced products are rejected by buyers and never make it to store shelves and approximately one-half of newly accepted products are removed from stores within 1 year. This study demonstrates that a food or agribusiness firm must first understand the standard procedures, wants and needs, of the key “gatekeeper” buyer before focusing on the final consumer. ©1994 by John Wiley & Sons, Inc.

Retail logistics and merchandising in the USA: current status and requirements in the year 2000

This study present the results of a survey of senior level retail executives in the USA. Responses provide an indication of retail perceptions surrounding the order fulfilment process. As retailers look ahead towards 2000, technological readiness will drive virtually all retailer expectations of suppliers. The use of Electronic Data Interchange (EDI) will become an industry mandate; those vendors who want to be the number one or two partner in a category will be technologically sophisticated. This technological readiness will dramatically reduce order time while improving invoice accuracy ‐ an edict clearly voiced by retailers. Finally, as suppliers and retailers look ahead, the formation of mutually beneficial partnerships will dominate.

Salience and taxation: salience effect versus information effect

Posting tax-inclusive price tags on grocery products can reduce demand through an information effect that corrects consumers who misperceive the actual tax status. We disentangle the information effect from the salience effect developed by Chetty, Looney and Kroft (2009, CLK for short). By utilizing CLKs survey finding that 20% of shoppers mistakenly think there is no sales tax on toothpaste, we show that the information effect actually explains 31% of the sales drop in CLKs field study. Therefore, ignoring the information effect may overestimate the salience effect by a large degree.

Decision criteria for new product acceptance and success: the role of trade buyers

Preface New Products in the U.S. Distribution System Key Participants in the New Product Introduction Process Research Process Profile of New Products Modeling Acceptance and Success Applications of Acceptance Models Summary Index