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Economic evaluation of shelf-space management in grocery stores

Author

Listed:
  • Chanjin Chung

    (Associate Professor, Department of Agricultural Economics, Oklahoma State University, Stillwater, OK 74078)

  • Todd M. Schmit

    (Assistant Professor, Department of Applied Economics and Management, Cornell University, Ithaca, NY, 14853)

  • Diansheng Dong

    (Research Associate, Department of Applied Economics and Management, Cornell University, Ithaca, NY, 14853)

  • Harry M. Kaiser

    (Professor, Department of Applied Economics and Management, Cornell University, Ithaca, NY, 14853)

Abstract

Recently, many commodity groups have shifted promotion expenditures from generic advertising to non-advertising activities such as in-store promotion programs. Accordingly, corresponding evaluation methods need to be developed to identify the benefits of these non-advertising programs. We develop a general framework to assess product sales performance of in-store shelf-space management programs in retail stores. The framework was applied to the evaluation of dairy case management programs in the Northwestern Hudson Valley market, New York. Simulation results on fluid milk product sales indicate that preferred product locations vary between smaller convenience stores and larger supermarket retailers. On average, the dairy case management program was estimated to improve product sales 6 to 10% at the retailer level. [Econlit subject codes: M300, Q130] © 2007 Wiley Periodicals, Inc. Agribusiness 23: 583-597, 2007.

Suggested Citation

  • Chanjin Chung & Todd M. Schmit & Diansheng Dong & Harry M. Kaiser, 2007. "Economic evaluation of shelf-space management in grocery stores," Agribusiness, John Wiley & Sons, Ltd., vol. 23(4), pages 583-597.
    • Handle: RePEc:wly:agribz:v:23:y:2007:i:4:p:583-597
    DOI: 10.1002/agr.20141
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    References listed on IDEAS

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    1. Hoyer, Wayne D, 1984. "An Examination of Consumer Decision Making for a Common Repeat Purchase Product," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 11(3), pages 822-829, December.
    2. McLaughlin, Edward W. & Perosio, Debra J., 1996. "The Role of the Supermarket Buyer," Research Bulletins 122826, Cornell University, Department of Applied Economics and Management.
    3. Schmit, Todd M. & Kaiser, Harry M. & Chung, Chanjin, 2004. "The Dairy Case Management Program: Does It Mooove More Milk? A Case Study of the Northwestern Hudson Valley Market," Research Bulletins 122093, Cornell University, Department of Applied Economics and Management.
    4. Lenz, John E. & Forker, Olan D. & Hurst, Susan J., 1991. "U.S. Commodity Promotion Organizations: Objectives, Activities, and Evaluation Methods," Research Bulletins 123097, Cornell University, Department of Applied Economics and Management.
    5. Schmit, Todd M. & Chung, Chanjin & Kaiser, Harry M., 2006. "The Dairy Case Management Program: Does It Mooove More Milk?," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 21(2), pages 1-6.
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    7. Pierre Desmet & Valérie Renaudin, 1998. "Estimation of Product Category Sales Responsiveness to Allocated Shelf Space," Post-Print halshs-00143451, HAL.
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    Cited by:

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    2. Murray, Chase C. & Talukdar, Debabrata & Gosavi, Abhijit, 2010. "Joint Optimization of Product Price, Display Orientation and Shelf-Space Allocation in Retail Category Management," Journal of Retailing, Elsevier, vol. 86(2), pages 125-136.
    3. Erica Herpen & Erjen Nierop & Laurens Sloot, 2012. "The relationship between in-store marketing and observed sales for organic versus fair trade products," Marketing Letters, Springer, vol. 23(1), pages 293-308, March.
    4. Monika Matušovičová & Martin Kuchta & Monika Stanková, 2022. "Improvement in Customer Experience Through the Creation of Virtual Brand Communities," Tržište/Market, Faculty of Economics and Business, University of Zagreb, vol. 34(1), pages 79-92.
    5. Adam, Abdulfatah & Jensen, Jørgen D. & Sommer, Iben & Hansen, Gitte L., 2017. "Does shelf space management intervention have an effect on calorie turnover at supermarkets?," Journal of Retailing and Consumer Services, Elsevier, vol. 34(C), pages 311-318.

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