The impact of category captainship on the breadth and appeal of a retailer's assortment

Mümin Kurtuluş, Sezer Ülkü, Jeffrey P. Dotson, Alper Nakkas

Research output: Contribution to journalArticle

7 Citations (Scopus)

Abstract

Category captainship is a collaborative channel arrangement wherein a retailer cedes control of category management decisions, such as developing a marketing strategy to grow the category and assortment selection, to one of the category's leading manufacturers. This paper studies the consequences of captainship practices on the breadth and appeal of a retailer's assortment. We consider a model where multiple manufacturers sell a product to consumers through a common retailer. In the benchmark, the retailer decides on effort to drive traffic into the category and assortment. Under captainship, the retailer delegates both of these decisions to a captain in return for target sales. The capability of the captain to stimulate demand is unknown to the retailer. We find that the breadth and/or appeal of the assortment at the retailer can increase or decrease under captainship relative to the benchmark. We identify three factors that play a role on the impact of captainship on the breadth and appeal of retailer's assortment: (i) the retailer's beliefs about the captain's capability, (ii) the captain's true capability, and (iii) product set heterogeneity. We find that the benefit to the captain sometimes comes at the expense of the non-captain manufacturers, but we also identify conditions where captainship can be beneficial for not only the retailer and the captain but also the non-captain manufacturers.

Original languageEnglish
Pages (from-to)379-392
Number of pages14
JournalJournal Of Retailing
Volume90
Issue number3
DOIs
Publication statusPublished - 2014

Keywords

  • Assortment planning
  • Category management
  • Distribution channels
  • Game theory

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