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

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  • Edward W. McLaughlin
  • Vithala R. Rao

Abstract

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.

Suggested Citation

  • Edward W. McLaughlin & Vithala R. Rao, 1990. "The Strategic Role of Supermarket Buyer Intermediaries in New Product Selection: Implications for Systemwide Efficiency," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(2), pages 358-370.
    • Handle: RePEc:oup:ajagec:v:72:y:1990:i:2:p:358-370.
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    File URL: http://hdl.handle.net/10.2307/1242339
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    Citations

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    Cited by:

    1. Montgomery, D. & Swinnen, G. & Vanhoof, K., 1997. "Comparison of some AI and statistical classification methods for a marketing case," European Journal of Operational Research, Elsevier, vol. 103(2), pages 312-325, December.
    2. Jaenicke, Edward C. & Harrison, R. Wes & Jensen, Kimberly L. & Jakus, Paul M., 2005. "Adoption Behavior in Food Retailers' Decision to Offer Fresh Irradiated Ground Beef," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24680, European Association of Agricultural Economists.
    3. Fredericks, Peter J. & McLaughlin, Edward W., 1992. "New Product Procurement: A Summary of Buying Practices and Acceptance Criteria at U.S. Supermarket Chains," Research Bulletins 123087, Cornell University, Department of Applied Economics and Management.
    4. Park, John L., 2001. "Supermarket Product Selection Uncovered: Manufacturer Promotions And The Channel Intermediary," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 4(2), pages 1-13.
    5. Edward W. McLaughlin & Peter Fredericks, 1994. "New product procurement behavior of us supermarket chains: Implications for food and agribusiness suppliers," Agribusiness, John Wiley & Sons, Ltd., vol. 10(6), pages 481-490.
    6. Sexton, Richard J., 1993. "Noncooperative Game Theory: A Review with Potential Applications to Agricultural Markets," Research Reports 25183, University of Connecticut, Food Marketing Policy Center.
    7. Jaenicke, Edward C. & Chikasada, Mitsuko, 2006. "Separate Decision-Making for Supermarket Leaders and Followers: The Case of Whether or Not to Offer Irradiated Ground Beef," Journal of Food Distribution Research, Food Distribution Research Society, vol. 37(3), pages 1-15, November.
    8. DeVuyst Cheryl S, 2005. "Demand Screening with Slotting Allowances and Failure Fees," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 3(2), pages 1-19, June.
    9. Edward C. Jaenicke & R. Wesley Harrison & Kimberly L. Jensen & Paul M. Jakus, 2006. "Follow the leader? Adoption behavior in food retailers' decision to offer fresh irradiated ground beef," Agribusiness, John Wiley & Sons, Ltd., vol. 22(4), pages 547-568.
    10. Sexton, Richard J., 1991. "Game Theory: A Review With Applications To Vertical Control In Agricultural Markets," Working Papers 225865, University of California, Davis, Department of Agricultural and Resource Economics.
    11. Sexton, Richard J., 1994. "A Survey of Noncooperative Game Theory with Reference to Agricultural Markets: Part 2. Potential Applications in Agriculture," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 62(02), pages 1-18, August.
    12. DeVuyst, Cheryl Sinn, 2000. "Slotting Allowances, Failure Fees And Asymmetric Information In The Grocery Supply Chain," 2000 Annual Meeting, June 29-July 1, 2000, Vancouver, British Columbia 36388, Western Agricultural Economics Association.
    13. Insch, Andrea & Prentice, Rebecca S. & Knight, John G., 2011. "Retail buyers’ decision-making and buy national campaigns," Australasian marketing journal, Elsevier, vol. 19(4), pages 257-266.
    14. Martinez, Stephen W., 2013. "Introduction of New Food Products With Voluntary Health- and Nutrition-Related Claims, 1989-2010," Economic Information Bulletin 145319, United States Department of Agriculture, Economic Research Service.

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