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The research library of POPAI serves to identify, preserve and make available research and insights of enduring value. POPAI’s aim is to make conditions suitable for access and to support research that will add to the literature of marketing at retail and shopper marketing and to elevate the medium on par with other marketing mediums.Access the research library. 

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Research: Retail Competition and the Dynamics of Consumer Demand « Research « Industry Resources « Downloads

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Version2009
Date postedNovember 30, -0001
Downloaded51 times
CategoriesResearch

Description

We present a demand system for tied goods incorporating dynamics arising from the tied-nature of the products and the stockpiling induced by storability and durability. We accommodate competition across tied good systems and competing downstream retail formats by endogenizing the retail format at which consumers choose to stockpile inventory. This facilitates measurement of long-run retail substitution effects and yields estimates of complementarities within, and substitution across, competing systems of tied-goods. We present an empirical application to an archetypal tied-goods category, razors and blades. We discuss the implications of measured effects for manufacturer pricing when selling the tied products through an oligopolistic downstream retail channel and assess the extent to which retail substitution reduces channel conflict.

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