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Market environment, assortment policy, and performance of small retailers

Author

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  • Cadeaux, Jack
  • Dubelaar, Chris

Abstract

This study surveys small retail pharmacies to examine the relationship between managers’ perceptions of local market environments, their stated assortment policies, and their reported performance levels for a large product category. Managers report wider assortments when market diversity and market munificence are high. In turn, wider assortments have a positive effect on reported relative category sales and stock. In addition, market uncertainty has a direct negative effect on reported margins. This study controls for both store space as well as the potential direct performance effects of the local market environment faced by small retailers.

Suggested Citation

  • Cadeaux, Jack & Dubelaar, Chris, 2012. "Market environment, assortment policy, and performance of small retailers," Australasian marketing journal, Elsevier, vol. 20(4), pages 250-259.
    • Handle: RePEc:eee:aumajo:v:20:y:2012:i:4:p:250-259
    DOI: 10.1016/j.ausmj.2012.05.013
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    References listed on IDEAS

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    1. Mantrala, Murali K. & Levy, Michael & Kahn, Barbara E. & Fox, Edward J. & Gaidarev, Peter & Dankworth, Bill & Shah, Denish, 2009. "Why is Assortment Planning so Difficult for Retailers? A Framework and Research Agenda," Journal of Retailing, Elsevier, vol. 85(1), pages 71-83.
    2. Garrett van Ryzin & Siddharth Mahajan, 1999. "On the Relationship Between Inventory Costs and Variety Benefits in Retail Assortments," Management Science, INFORMS, vol. 45(11), pages 1496-1509, November.
    3. Dubelaar, Chris & Bhargava, Mukesh & Ferrarin, David, 2002. "Measuring retail productivity: what really matters?," Journal of Business Research, Elsevier, vol. 55(5), pages 417-426, May.
    4. McQuitty, Shaun, 2004. "Statistical power and structural equation models in business research," Journal of Business Research, Elsevier, vol. 57(2), pages 175-183, February.
    5. Cadeaux, Jack M., 1994. "Flexibility and performance of branch store stock plans for a manufacturer's product line," Journal of Business Research, Elsevier, vol. 29(3), pages 207-218, March.
    6. Kim, Keysuk, 2002. "Output sector munificence and supplier control in industrial channels of distribution: a contingency approach," Journal of Business Research, Elsevier, vol. 55(6), pages 427-440, June.
    7. Scherer, F M, 1979. "The Welfare Economics of Product Variety: An Application to the Ready-to-Eat Cereals Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 28(2), pages 113-134, December.
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    Cited by:

    1. Juan-Francisco Delgado-de Miguel & Tamar Buil-López Menchero & Miguel-Ángel Esteban-Navarro & Miguel-Ángel García-Madurga, 2019. "Proximity Trade and Urban Sustainability: Small Retailers’ Expectations Towards Local Online Marketplaces," Sustainability, MDPI, vol. 11(24), pages 1-20, December.

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