Towards understanding consumer response to stock-outs

Campo, Katia; Gijsbrechts, Els; Nisol, Patricia

doi:10.1016/s0022-4359(00)00026-9

Cited by 244 publications

(193 citation statements)

References 26 publications

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“…Reduced distribution would create more transaction costs, making it less worthwhile for the typical retailer's consumer to buy them (Campo, Gijsbrechts, and Nisol 2000). Likewise, if consumers perceive the price of organics as high, they will be less willing to purchase them (Michelsen et al 1999;Verhoef 2005;Zanoli and Naspetti 2002).…”

Section: Hypotheses Developmentmentioning

confidence: 99%

What is Special about Marketing Organic Products? How Organic Assortment, Price, and Promotions Drive Retailer Performance

Bezawada

Pauwels

2013

Journal of Marketing

152

119

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Higher sales and margins are key goals for retailers promoting emerging products, such as organics, but little is known about their marketing effectiveness and their cross-effects on conventional product sales. Extant research reports conflicting results about price and promotional sensitivity for organic products and does not address the impact of organic assortment. This article calculates long-term own-and cross-elasticities of organic and conventional product sales in response to changes in assortment, price, and promotions. Using a rich data set of 56 categories, the authors test hypotheses on how different costs and benefits of organic products affect these elasticities. They find that enduring actions, such as assortment and regular price changes, have a higher elasticity for organics than for conventional products. In contrast with common wisdom, even "core" organic consumers are sensitive to these actions.Increasing organic assortment and promotion breadth yields higher profits for the total category, as do more frequent promotions on conventional products. Our category comparison yields specific advice as to where larger assortment, lower prices versus more and deeper promotions are most effective.

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Section: Hypotheses Developmentmentioning

confidence: 99%

What is Special about Marketing Organic Products? How Organic Assortment, Price, and Promotions Drive Retailer Performance

Bezawada

Pauwels

2013

Journal of Marketing

152

119

View full text Add to dashboard Cite

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“…Substitution parameter ( ): Several studies (Emmelhainz, et al 1991, Campo et al 2000, Gruen, et al 2002, Sloot et al 2005) have looked at consumer responses to stockouts, primarily in grocery or discount stores, and they find that a significant proportion of the consumers substitute a similar item within the store. The substitution percentages within a store vary depending on the product characteristics and the study, with typical values between 30% and 60%.…”

mentioning

confidence: 99%

Inventory Models for Substitutable Products: Optimal Policies and Heuristics

2008

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In this paper, we examine the nature of optimal inventory policies in a system where a retailer manages substitutable products. We first consider a system with two products 1 and 2 whose total demand is D and individual demand proportions are p and (1-p). A fixed proportion of the unsatisfied customers for 1(2) will purchase item 2 (1), if it is available in inventory. For the single period case, we show that the optimal inventory levels of the two items can be computed easily and follow what we refer to as "partially decoupled" policies, i.e. base stock policies that are not state dependent, in certain critical regions of interest both when D is known and random. Furthermore, we show that such a partially decoupled basestock policy is optimal even in a multi-period version of the problem for known D for a wide range of parameter values. Using a numerical study, we show that heuristics based on the de-coupled inventory policies perform well in conditions more general than the ones assumed to obtain the analytical results.The analytical and numerical results suggest that the approach presented here is most valuable in retail settings for product categories where there is a moderate level of substitution between items in the category, demand variation at the category level is not too high and service levels are high.

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“…According to Campo et al [17], the stock-out cost depends on many factors, such as the availability of acceptable alternatives, deal proneness, item loyalty, private label buyers, product importance, the regular package size and other package sizes. However, since most of the factors are qualitative, it is difficult to measure them.…”

Section: Shortage Cost Scmentioning

confidence: 99%

Sustainable EOQ under Lead-Time Uncertainty and Multi-Modal Transport

2017

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Abstract:In this paper, we examine a sustainable economic order quantity (S-EOQ) problem with a stochastic lead-time and multi-modal transportation options. With the S-EOQ, decisions of order quantities, as well as a reorder point could be influenced by various factors, including unit price, stock-out cost, lead-time variability and emission costs. For a better understanding, we present a mathematical model of the concomitant S-EOQ problem and, using numerical experiments, explore various scenarios to determine the effects of incorporating sustainability considerations into the traditional inventory model on operational decisions including the choice of transportation modal combination and the sourcing decisions

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Towards understanding consumer response to stock-outs

Cited by 244 publications

References 26 publications

What is Special about Marketing Organic Products? How Organic Assortment, Price, and Promotions Drive Retailer Performance

What is Special about Marketing Organic Products? How Organic Assortment, Price, and Promotions Drive Retailer Performance

Inventory Models for Substitutable Products: Optimal Policies and Heuristics

Sustainable EOQ under Lead-Time Uncertainty and Multi-Modal Transport

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