Cross-Category Effects of Aisle and Display Placements: A Spatial Modeling Approach and Insights

Journal of Marketing, Vol. 73 (May 2009), 99–117

Mays Business School Research Paper No. 2012-60

21 Pages Posted: 17 May 2012

See all articles by Ram Bezawada

Ram Bezawada

Baruch College

Subramanian Balachander

Purdue University - Krannert School of Management

P.K. Kannan

University of Maryland - Robert H. Smith School of Business

Venkatesh Shankar

Texas A&M University - Mays Business School

Date Written: May 17, 2009

Abstract

Amid growing competition, retailers are increasingly interested in more effective aisle and display management strategies. These strategies involve placements of product categories in aisles and displays within each store to facilitate greater sales affinity (demand attraction) between categories to improve the store’s share of customer wallet. The authors investigate the effects of aisle and display placements on the sales affinities between categories. They develop a spatial model of brand sales that allows for asymmetric store-specific affinity effects between two or more categories, while controlling for the effects of traditional merchandising and marketing-mix variables, such as price, feature, and display. They estimate the model on aggregate store-level data for regular cola and regular potato chip categories for a major retail chain, using hierarchical Bayesian methods. They show the usefulness and extension potential of the model through simulation of aisle placements for a third category. The results show that aisle and display placements have significant and sizable asymmetric effects on cross-category sales affinities comparable to those influenced by marketing-mix variables. Retail managers can use this detailed store-level model and subsequent insights to develop customized aisle and display management for their individual stores.

Keywords: cross-category sales, aisle management, display placement, spatial model, marketing mix

Suggested Citation

Bezawada, Ram and Balachander, Subramanian and Kannan, Pallassana and Shankar, Venkatesh, Cross-Category Effects of Aisle and Display Placements: A Spatial Modeling Approach and Insights (May 17, 2009). Journal of Marketing, Vol. 73 (May 2009), 99–117, Mays Business School Research Paper No. 2012-60, Available at SSRN: https://ssrn.com/abstract=2061818

Ram Bezawada (Contact Author)

Baruch College ( email )

One Bernard Baruch Way, B12-240
New York, NY 10010-5585
United States

Subramanian Balachander

Purdue University - Krannert School of Management ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States

Pallassana Kannan

University of Maryland - Robert H. Smith School of Business ( email )

Department of Marketing
College Park, MD 20742-1815
United States
301-405-2188 (Phone)
301-405-0146 (Fax)

Venkatesh Shankar

Texas A&M University - Mays Business School ( email )

Wehner 401Q, MS 4353
College Station, TX 77843-4218
United States
979-845-3246 (Phone)

HOME PAGE: http://www.venkyshankar.com

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