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Manufacturer and retailer power in retailer response to trade discounts.

ABSTRACT

Trade promotion effectiveness/efficiency was rated as the top issue faced by grocery manufacturers in a recent A.C. Nielson survey and was reported to account for 16% of gross sales. This study addresses trade promotion efficiency by examining the percent of tradediscounted product that is bought then sold through particular retailers to consumers. We test whether manufacturer or retailer power has any influence on retailer response to trade discounts using annual data from 167 manufacturer/retailer dyads involving a major multi-brand grocery manufacturer and forty one major grocery retailers in metropolitan regions throughout the U.S. Indicators of manufacturer ...

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