The Value of Category Captainship in the Presence of Manufacturer Competition

Kurtulus, M., A. Nakkas, and S. Ulku. (2013). "The Value of Category Captainship in the Presence of Manufacturer Competition" Production and Operations Management, Forthcoming

Vanderbilt Owen Graduate School of Management Research Paper No. 2320676

44 Pages Posted: 6 Sep 2013 Last revised: 7 Nov 2013

See all articles by Mumin Kurtulus

Mumin Kurtulus

Vanderbilt University - Operations Management

Alper Nakkas

University of Texas at Arlington

Sezer Ulku

Georgetown University McDonough School of Business; Georgetown University - Robert Emmett McDonough School of Business

Date Written: September 4, 2013

Abstract

This research investigates the value of category captainship (a management practice in which a retailer relies on a manufacturer for recommendations regarding strategic category management decisions) in retail supply chains. We consider a setting where the scope of category management is limited to assortment decisions and demand enhancing activities. We assume that the retailer selects a category captain among multiple competing manufacturers with privately known capabilities for driving category traffic. First, we consider a benchmark scenario where the retailer is responsible for category management. Then, we consider the category captainship scenario where the retailer selects one of the manufacturers as a captain to manage the category. We find that captainship is more likely to emerge in categories where the cost of managing variety, the retail margins and the competition for captainship are moderate and the captain is more capable of driving traffic compared to the retailer. In such categories the collaboration between the retailer and the captain ensures sufficient surplus for both parties. Finally, we show that captainship can also benefit the non-captain manufacturers.

Keywords: category management, category captainship, retailing, auctions with externalities

Suggested Citation

Kurtulus, Mumin and Nakkas, Alper and Ulku, Sezer, The Value of Category Captainship in the Presence of Manufacturer Competition (September 4, 2013). Kurtulus, M., A. Nakkas, and S. Ulku. (2013). "The Value of Category Captainship in the Presence of Manufacturer Competition" Production and Operations Management, Forthcoming , Vanderbilt Owen Graduate School of Management Research Paper No. 2320676, Available at SSRN: https://ssrn.com/abstract=2320676

Mumin Kurtulus (Contact Author)

Vanderbilt University - Operations Management ( email )

Nashville, TN 37203
United States

Alper Nakkas

University of Texas at Arlington ( email )

Arlington, TX
United States

Sezer Ulku

Georgetown University McDonough School of Business ( email )

Washington, DC 20057
United States

Georgetown University - Robert Emmett McDonough School of Business ( email )

3700 O Street, NW
Washington, DC 20057
United States

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