The effects of brand loyalty on competitive price promotional strategies

Article Abstract:

A model was suggested to determine the role played by brand loyalty in setting the most positive price promotional techniques used by companies. Specifically, the research focused on how loyalties to competing brands affect whether companies use price promotions in different product categories. Research also focused on how variations in loyalty lead to variations in how frequently price discounts are offered for products in a single category. The model predicted that a brand's chance of using price promotion grows with an expansion in the number of competing brands in the product category. Research results suggest that brands with larger followings do not promote as much as weaker brands, and that weaker brands achieve more from promotions. Model predictions were also tested using information on 27 different product categories. Research results suggest that the data is consistent with central findings of the proposed model.

Marketing management, Brand choice, Strategic planning (Business)

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The introduction and performance of store brands

Article Abstract:

An analytical model is developed to investigate the conditions that make a product category more conducive for private label/store brand introduction. It explores the impact on private label/store brand introduction of the following market characteristics: the number of national brands in a product category, the cross-price sensitivity among national brands, the cross-price sensitivity between the national brands and the store brand, and the base-level of demand of the store brand. The results of an empirical analysis of data from 426 grocery product categories indicate that private label introduction tends to boost the profits of retailers in a product category when there is low cross-price sensitivity among national brands and high cross-price sensitivity between the national brands and the store brand.

New products, Product introduction, Private labeling, Private label products

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Quota-based compensation plans for multiterritory heterogeneous salesforces

Article Abstract:

The quota-based salesforce compensation plan is compared with the optimal curvilinear agency-theory-based compensation plan proposed by Basu, Lal, Srinivasan and Staelin (BLSS)(1985). Under a quota plan, the salesperson received a fixed salary plus commission income based on the dollars sales exceeding the quota. Quotas vary across salespersons and territories. The BLSS plan, on the other hand, tailors the compensation plan to each salesperson/territory to maximize the firm's profit. Numerical experiments show that the basic quota plan are simpler to implement than the BLSS plan. In addition, findings show that the nonoptimality of this plan is only slight and that its problem relating to the transfer of salespeople from territory to territory can be resolved by simply changing the quota.

Compensation and benefits, Compensation management, Sales management, Sales personnel, Salespeople, Agency theory, Commissions (Compensation), Commissions (Fees)

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