New product introductions, slotting allowances, and retailer discretion

    Authors

    R. Desiraju

    Comments

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    Abbreviated Journal Title

    J. Retail.

    Keywords

    PRICE; Business

    Abstract

    Retailers are increasingly demanding slotting allowances for new product introductions. We study two methods of determining the magnitude of such allowances: In the first, the retailer sets the allowance on a "brand-by-brand" basis. In the second, all introductions are asked the same "uniform" allowance. Using a mathematical model, we address the question "which is the preferred method?" This analysis reveals an important tradeoff. While the brand-by-brand method lets the retailer benefit from any successful introduction, the uniform method lets the retailer demand higher allowances. We identify the conditions favoring the use of these methods. (C) 2001 by New York University. All rights reserved.

    Journal Title

    Journal of Retailing

    Volume

    77

    Issue/Number

    3

    Publication Date

    1-1-2001

    Document Type

    Article

    Language

    English

    First Page

    335

    Last Page

    358

    WOS Identifier

    WOS:000170952800003

    ISSN

    0022-4359

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