Factors Affecting the Allocation of Trade Promotions in the U.S. Food Distribution System |
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| Authors: | Miguel I Gómez Laoura M Maratou David R Just |
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| Institution: | Miguel I. Gómez is assistant professor, University of Illinois at Urbana-Champaign.;Laoura M. Maratou is MS graduate, Cornell University and in-service trainee, Directorate-General for Agriculture and Rural Development, European Commission.;David R. Just is assistant professor, Cornell University. Gómez and Maratou share first authorship. |
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| Abstract: | Although many have proposed theories explaining trade promotion (TP) behavior by manufacturers, lack of data has prevented empirical assessment. We employ survey data to explore the effect of manufacturer and retailer bargaining power on the allocation of TPs in the U.S. food sector. The survey respondents consist of retailers controlling 40% of retail sales in U.S. supermarkets. Retailer bargaining power increases the allocation of funds to off-invoice TPs through higher share of private label and retailer size. Manufacturer bargaining power decreases the allocation of funds to off-invoice TPs by establishing formal policies of negotiation. |
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