Market Roll-Out and Retailer Adoption for New Brands

Abstract

This paper proposes a descriptive model of the spatial and temporal evolution of retail distribution for new packaged goods. The distribution model postulates separate processes for local market entry by manufacturers, and adoption by retailers given entry. Of special interest is whether retail adoption occurs along a competitive network with retailers as nodes and overlapping trade areas of these retailers as links. The model is calibrated on data covering the introduction of two very successful new brands in the frozen pizza category. For these brands, manufacturers sequentially enter markets based on spatial proximity to markets already entered (spatial evolution), and on whether chains in these markets adopted previously elsewhere (market selection). A retail chain adopts new brands based on the adoption timing of competing chains within its trade territory (competitive contagion) and on the fraction of its trade area in which the new brand is available (trade area coverage). The effects of market selection and of trade area coverage create dependencies between market entry and retail adoption. Because of these dependencies the attraction of a particular market as a lead market depends on its location in the geographic structure of the U.S. retail trade.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 107 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.