Constructing a balanced view of profit structure in grocery retailing
| Autor: | Pilsik Choi |
|---|---|
| Rok vydání: | 2017 |
| Předmět: |
business.industry
media_common.quotation_subject 05 social sciences Accounting General Business Management and Accounting Profit (economics) Grocery retailing Originality Cash 0502 economics and business Category management 050211 marketing Profitability index Survey instrument Business Traffic generation model 050203 business & management media_common |
| Zdroj: | Management Research Review. 40:726-744 |
| ISSN: | 2040-8269 |
| Popis: | Purpose The purposes of this paper are to propose a different profitability metric (i.e. anchor category profits) at the category level based on the concept of anchor categories and to illustrate how such a metric can be calculated in field settings to offer a balanced view of profit structure from both the accounting and marketing perspectives. Design/methodology/approach First, the concept of anchor categories is developed drawing on anchor effects theory and automatic cognitive processing theory. Based on anchor categories, this paper proposes a formula for calculating anchor category profits. Using the data collected with a survey instrument, this paper calculates accounting profits and anchor category profits for two grocery stores. Findings The intra-store analysis of accounting profits and anchor category profits reveals that the two profit measures project different profit contribution patterns by product categories for each store. The inter-store analysis provides quite different, yet useful information about profit structures for the two grocery stores. Although the two stores are similar in terms of accounting profits, their anchor category profits show different pictures regarding profit contribution patters by product categories between the two stores, revealing that different categories attract customers to different stores. Practical/implications Comparing accounting profits and anchor category profits allows retail managers to identify traffic generator categories and cash generator categories, which helps retail managers develop more effective category management to increase storewide profits. Originality value This paper increases understanding of the relationship between product categories and store choice behavior by offering a theoretical rationale to explain why some product categories influence consumers’ store choice. This paper also proposes anchor category profits as a more implementation-friendly category-level profitability metric that combines accounting principles with consumers’ shopping trip planning behavior. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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