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One for all or all for one: Does the category captain play favourites

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  • Myongjin Kim
  • Leilei Shen
  • Suman Basuroy
  • Sri Beldona

Abstract

In the consumer packaged goods industry, category captain is the company (e.g., Pepsi) that retailers (e.g., Kroger) designate as the leader of an entire product category (e.g., carbonated beverages) and collaborate with to manage the product category through the process of category management. Much uncertainty exists about the consequences of category management. We use a unique data set on the ready‐to‐eat cereals category in which the retailer designated a category captain. In this paper, we find that category captain does not have more to gain in terms of market shares than other products within the ready‐to‐eat cereals category, alleviating antitrust concerns related to category management. In addition, we find that category captain increases the market share of products that are more price competitive, not necessarily that of its own products, which points to a category captain focusing on growing the category's market as it is incentivized to do so. Un pour tous, tous pour un : le capitaine de catégorie est‐il privilégié? Dans l'industrie des biens de consommation emballés, les capitaines de catégorie sont les entreprises (p. ex. Pepsi) que les magasins de détail (p. ex. Kroger) désignent comme étant les chefs de file de toute une catégorie de produits (p. ex. boissons gazéifiées) et qui collaborent avec eux pour gérer la catégorie de produits tout au long du processus de gestion par catégorie. Il y a beaucoup d'incertitudes quant aux conséquences de la gestion par catégorie. Nous utilisons un ensemble de données unique sur la catégorie des céréales prêtes à manger dans laquelle le magasin de détail a désigné un capitaine de catégorie. Dans cet article, nous constatons que le capitaine de catégorie n'est pas plus gagnant que les autres joueurs de la catégorie des céréales prêtes à manger en ce qui concerne les parts de marché, ce qui atténue les préoccupations en matière de pratiques antitrust associées à la gestion par catégorie. En outre, nous observons que le capitaine de catégorie augmente sa part de marché des produits qui sont plus concurrentiels du côté du prix, ce qui indique qu'un capitaine de catégorie se concentre sur la croissance du marché de la catégorie, car il y est encouragé.

Suggested Citation

  • Myongjin Kim & Leilei Shen & Suman Basuroy & Sri Beldona, 2023. "One for all or all for one: Does the category captain play favourites," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(1), pages 87-113, February.
  • Handle: RePEc:wly:canjec:v:56:y:2023:i:1:p:87-113
    DOI: 10.1111/caje.12636
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    References listed on IDEAS

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