The relationship between in-store marketing and observed sales for organic versus fair trade products

Abstract

To stimulate sales of sustainable products, such as organic and fair trade products, retailers need to know whether their in-store instruments effectively enhance market shares. This study uses sales data and a multilevel modeling approach to explain the market shares of sustainable products according to shelf layout factors, price level, price promotions, and consumer demographics. It argues that the effect of these variables differs between organic versus fair trade products, as buying motives might differ, organic buyers tend to be more loyal, and price is a more informative signal of quality for organic products. Results show that the number of facings has a positive relationship with the market share of fair trade brands, but not with the market share of organic brands. The same holds for the price difference with the leading brand, which is important for fair trade brands but not for organic brands. In contrast, an arrangement of the product category by brand is associated with higher market share for organic brands but not for fair trade brands. Additionally, placement at eye level and clustering of items benefits both types of sustainable brands, whereas they appear to be not very sensitive to price promotions. Finally, higher sales of sustainable products are found in areas where the customer base is older and has a higher education level.

Large UK retailers' initiatives to reduce consumers' emissions: a systematic assessment

“…Firstly, retailers influence their role as intermediaries (Stewart and Hyysalo, 2008), through pricing (Shankar and Bolton, 2004), promotion, shelf space allocation and shelf positioning (van Nierop et al, 2011, Kök et al, 2009. Secondly, retailers are adept at representing their views of consumer needs to government (Marsden andWrigley, 1995, DEFRA, 2010).…”

“…It is therefore important to analyse their plans and actions for the types of goods that generate carbon emissions from the use of the products they sell. There has been research on strategies and space allocation choices in the interests of corporate responsibility, but largely focused either on Fairtrade products (Nicholls, 2002, Jones et al, 2003 or organic and Fairtrade food products (van Nierop et al, 2011, van Herpen et al, 2012, with the exception of Carrero and Valor (2012) for a broad range of ethical and environmental issues. There has also been research on the role of labelling schemes for relative energy efficiency in use, some of them devised by retailers (Heinzle andWüstenhagen, 2012, Horne, 2009).…”

“…It complements the FSSD-derived model because it helps to evaluate framing of consumer behaviour change content within the initiatives, whereas the former assesses the strategic coherence of their planning. Retailer devices that can be used to influence consumers Price and price promotions (Shankar and Bolton, 2004) Advertising material designed to appeal to individuals, rationally or emotionally (Vakratsas andAmbler, 1999, Stafford andDay, 1995) Point of sale information (Broeckelmann and Groeppel-Klein, 2008) Product packaging (Gómez et al, 2015, Löfgren et al, 2008 Social media, through which groups self-identify by (Chu andKim, 2011, Smith et al, 2007) Shared cultural understanding through, for instance, advertising designed to appeal to shared engagement, or opinion leader endorsement, or through workplace initiatives (Southerton et al, 2011) The assortment of products and shelf space given to them (Kök et al, 2009, Borin andFarris, 1995) Product shelf positioning (van Nierop et al, 2011) Source: Southerton et al(2011), Darnton andEvans (2013) and extended by the authors to include, and categorise, retailer devices.…”

Consumer loyalty towards locally certified low-input farm products

“…Though some studies showed that higher price has little or no significant effect on the market share (Van Herpen et al, 2012), price premium has been found to be the main obstacle in the purchase (Byrne et al, 1992;Zanoli and Naspetti, 2002), and repeated purchase (Marian et al, 2014). Therefore, it is crucial to examine how loyalty programs that provide economic rewards for highly priced, value-added farm products influence the consumers' repeated purchase behavior.…”

Two-Stage Determinants of the Organic Food Retailing Landscape: The Case of Manhattan, New York

“…Another successful in-store marketing strategy is the clustering of organic and fair trade products together in a store to make it easier for customers to find all organic food in one location. In addition, an increase in the number and types of organic products available for sale in a store can lead to greater purchases of these products by consumers (Bezawada & Pauwels, 2013;Van Herpen, Van Nierop, & Sloot, 2012).…”