Original Research Article
Published 2023-11-06
Keywords
- distribution,
- velocity,
- wine,
- retail,
- channel
- strategy ...More
How to Cite
Hirche, M., Loose, S., Lockshin, L., & Nenycz-Thiel, M. (2023). Distribution Velocity in Wine Retailing. Wine Economics and Policy. Retrieved from https://oaj.fupress.net/index.php/wep/article/view/14190
Copyright (c) 2023 Martin Hirche, Simone Loose, Larry Lockshin, Magda Nenycz-Thiel
This work is licensed under a Creative Commons Attribution 4.0 International License.
Abstract
Little is known about the relationship between distribution and market share in the wine category. Understanding the influences of product and distribution characteristics at the SKU-level and incorporating them into marketing strategy and planning has important managerial and academic implications. Sales of 3,524 wine SKUs across 4,218 stores and 4 states in the US over one year of observation are analysed. We use an established distribution velocity model (Reibstein & Farris 1995) to estimate the relationship between distribution and market share. We then use the market share deviations from the expected values and apply a secondary robust regression to investigate possible relationships between various product- and distribution characteristics and those market share deviations. The results show that the distribution velocity in wine retailing is convex and increasing, in line with previous findings for other consumer-packaged goods in the marketing literature. Beyond distribution breadth, we find that overall parent brand performance (above), unit price (above), packaging type (above), country-of-origin, grape variety, sales consistency (above) and store specialisation (below) are associated with above or below expected market share of wine SKUs.
References
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[22] Steenkamp, J.-B. E. M. & Geyskens, I. 2014. Manufacturer and Retailer Strategies to Impact Store Brand Share: Global Integration, Local Adaptation, and Worldwide Learning. Marketing Science, 33(1), 6-26. https://doi.org/10.1287/mksc.2013.0801
[23] Cleeren, K., Verboven, F., Dekimpe, M. G. & Gielens, K. 2010. Intra- and Interformat Competition Among Discounters and Supermarkets. Marketing Science, 29(3), 456-473. https://doi.org/10.1287/mksc.1090.0529
[24] Shah, D., Kumar, V. & Yl, Z. 2015. Diagnosing Brand Performance: Accounting for the Dynamic Impact of Product Availability with Aggregate Data. Journal of Marketing Research, 52(2), 147-165. https://doi.org/10.1509/jmr.13.0530
[25] Corsten, D. & Gruen, T. 2003. Desperataly seeking shelf availability: An examination of the extent, the causes, and the efforts to address retail out-of-stocks. International Journal of Retail & Distribution Management, 31(12), 605-617. https://doi.org/10.1108/09590550310507731
[26] Chernev, A. & Hamilton, R. 2009. Assortment Size and Option Attractiveness in Consumer Choice Among Retailers. Journal of Marketing Research, 46(3), 410-420. https://doi.org/10.1509/jmkr.46.3.410
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[28] Tan, L. P. & Cadeaux, J. 2011. Brand and stock-keeping-unit (SKU) assortments, assortment changes and category sales. The International Review of Retail, Distribution and Consumer Research, 21(2), 161-185. https://doi.org/10.1080/09593969.2011.562682
[29] Rousseeuw, P. J. & Leroy, A. M. 2005. Robust Regression and Outlier Detection, New York, John Wiley & Sons, Inc.
[30] Friberg, R. & Sanctuary, M. 2017. The effect of retail distribution on sales of alcoholic beverages. Marketing Science, 36(4), 626-641. https://doi.org/10.1287/mksc.2017.1038
[31] Verhoef, P. C., Kannan, P. K. & Inman, J. J. 2015. From Multi-Channel Retailing to Omni-Channel Retailing: Introduction to the Special Issue on Multi-Channel Retailing. Journal of Retailing, 91(2), 174-181. https://doi.org/10.1016/j.jretai.2015.02.005
[2] OIV 2021. Leading wine import markets worldwide in 2021. https://www.statista.com/statistics/328253/global-market-leading-wine-importing-countries-based-on-value/, 2021 (accessed 09 October 2022).
[3] Euromonitor 2017. Statistics Alcoholic Drinks US. January 2017 ed.: Euromonitor International.
[4] Euromonitor 2021. Wine in the US – Country Report. May 2021 ed.: Euromonitor International.
[5] Ataman, M. B., Mela, C. F. & van Heerde, H. J. 2008. Building Brands. Marketing Science, 27(6), 1036-1054. https://doi.org/10.1287/mksc.1080.0358
[6] Farris, P. W., Olver, J. & De Kluyver, C. 1989. The Relationship between Distribution and Market Share. Marketing Science, 8(2), 107-128. https://doi.org/10.1287/mksc.8.2.107
[7] Hirche, M., Farris, P. W., Greenacre, L., Quan, Y. & Wei, S. 2021a. Predicting Under- and Overperforming SKUs within the Distribution–Market Share Relationship. Journal of Retailing, 97(4), 697-714. https://doi.org/10.1016/j.jretai.2021.04.002
[8] Kruger, M. W. & Harper, B. 2006. Market Share and Product Distribution: Re-tested and Extended. (White Paper). INFORMS Marketing Science Conference. Pittsburgh, USA: Information Resources, Inc.
[9] Reibstein, D. & Farris, P. W. 1995. Market Share and Distribution: a Generalization, a Speculation, and some Implications. Marketing Science, 14(3), G190-G202. https://doi.org/10.1287/mksc.14.3.G190
[10] Verbeke, W., Clement, F. & Farris, P. W. 1994. Product availability and market share in an oligopolistic market: the Dutch detergent market. The International Review of Retail, Distribution and Consumer Research, 4(3), 277-296. https://doi.org/10.1080/09593969400000021
[11] Wilbur, K. C. & Farris, P. W. 2014. Distribution and Market Share. Journal of Retailing, 90(2), 154-167. https://doi.org/10.1016/j.jretai.2013.08.003
[12] Ailawadi, K. & Farris, P. W. 2017. Managing Multi- and Omni-Channel Distribution: Metrics and Research Directions. Journal of Retailing, 93(1), 120-135. https://doi.org/10.1016/j.jretai.2016.12.003
[13] Farris, P. W. 2004. Using Steiner s dual-stage model to develop better measures of retail distribution. Antitrust Bulletin, 49(4), 941-954. https://doi.org/10.1177/0003603X0404900406
[14] Hirche, M., Greenacre, L., Nenycz-Thiel, M., Loose, S. & Lockshin, L. 2021b. SKU performance and distribution: A large-scale analysis of the role of product characteristics with store scanner data. Journal of Retailing and Consumer Services, 61, 102533. https://doi.org/10.1016/j.jretconser.2021.102533
[15] Mueller, S., Osidacz, P., Francis, I. L. & Lockshin, L. 2010. Combining discrete choice and informed sensory testing in a two-stage process: Can it predict wine market share? Food Quality and Preference, 21(7), 741-754. https://doi.org/10.1016/j.foodqual.2010.06.008
[16] Joshi, R. & Yadav, R. 2018. Exploring the Mediating Effect of Parent Brand Reputation on Brand Equity. Paradigm, 22(2), 125-142. https://journals.sagepub.com/doi/abs/10.1177/0971890718787903
[17] Kahn, B. E. 1998. Dynamic relationships with customers: High-variety strategies. Journal of the Academy of Marketing Science, 26(1), 45-53. https://doi.org/10.1177/0092070398261005
[18] Balestrini, P. & Gamble, P. 2006. Country-of-origin effects on Chinese wine consumers. British Food Journal, 108(5), 396-412. https://doi.org/10.1108/00070700610661367
[19] Hirche, M. & Bruwer, J. 2014. Buying a Product for an Anticipated Consumption Situation - Observation of High and Low Involved Wine Buyers in a Retail Store. International Journal of Wine Business Research, 26(4), 295-318. https://doi.org/10.1108/IJWBR-01-2014-0007
[20] Jarvis, W., Rungie, C. & Lockshin, L. 2007. Revealed preference analysis of red wine attributes using polarisation. International Journal of Wine Business Research, 19(2), 127-138. https://doi.org/10.1108/17511060710758687
[21] Wiedmann, K.-P., Hennigs, N., Henrik Behrens, S. & Klarmann, C. 2014. Tasting green: an experimental design for investigating consumer perception of organic wine. British Food Journal, 116(2), 197-211. https://doi.org/10.1108/BFJ-04-2012-0090
[22] Steenkamp, J.-B. E. M. & Geyskens, I. 2014. Manufacturer and Retailer Strategies to Impact Store Brand Share: Global Integration, Local Adaptation, and Worldwide Learning. Marketing Science, 33(1), 6-26. https://doi.org/10.1287/mksc.2013.0801
[23] Cleeren, K., Verboven, F., Dekimpe, M. G. & Gielens, K. 2010. Intra- and Interformat Competition Among Discounters and Supermarkets. Marketing Science, 29(3), 456-473. https://doi.org/10.1287/mksc.1090.0529
[24] Shah, D., Kumar, V. & Yl, Z. 2015. Diagnosing Brand Performance: Accounting for the Dynamic Impact of Product Availability with Aggregate Data. Journal of Marketing Research, 52(2), 147-165. https://doi.org/10.1509/jmr.13.0530
[25] Corsten, D. & Gruen, T. 2003. Desperataly seeking shelf availability: An examination of the extent, the causes, and the efforts to address retail out-of-stocks. International Journal of Retail & Distribution Management, 31(12), 605-617. https://doi.org/10.1108/09590550310507731
[26] Chernev, A. & Hamilton, R. 2009. Assortment Size and Option Attractiveness in Consumer Choice Among Retailers. Journal of Marketing Research, 46(3), 410-420. https://doi.org/10.1509/jmkr.46.3.410
[27] Oppewal, H. & Koelemeijer, K. 2005. More choice is better: Effects of assortment size and composition on assortment evaluation. International Journal of Research in Marketing, 22(1), 45-60. https://doi.org/10.1016/j.ijresmar.2004.03.002
[28] Tan, L. P. & Cadeaux, J. 2011. Brand and stock-keeping-unit (SKU) assortments, assortment changes and category sales. The International Review of Retail, Distribution and Consumer Research, 21(2), 161-185. https://doi.org/10.1080/09593969.2011.562682
[29] Rousseeuw, P. J. & Leroy, A. M. 2005. Robust Regression and Outlier Detection, New York, John Wiley & Sons, Inc.
[30] Friberg, R. & Sanctuary, M. 2017. The effect of retail distribution on sales of alcoholic beverages. Marketing Science, 36(4), 626-641. https://doi.org/10.1287/mksc.2017.1038
[31] Verhoef, P. C., Kannan, P. K. & Inman, J. J. 2015. From Multi-Channel Retailing to Omni-Channel Retailing: Introduction to the Special Issue on Multi-Channel Retailing. Journal of Retailing, 91(2), 174-181. https://doi.org/10.1016/j.jretai.2015.02.005