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Factors Affecting the Allocation of Trade Promotions in the U.S. Food Distribution System
Author(s) -
Gómez Miguel I.,
Maratou Laoura M.,
Just David R.
Publication year - 2007
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.1111/j.1467-9353.2006.00333.x
Subject(s) - distribution (mathematics) , economics , food distribution , agricultural economics , business , mathematics , political science , mathematical analysis , law
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.