The relationship between in-store marketing and observed sales for organic versus fair trade products
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The relationship between in-store marketing and observed sales for organic versus fair trade products Erica van Herpen & Erjen van Nierop & Laurens Sloot
Published online: 15 December 2011 # The Author(s) 2011. This article is published with open access at Springerlink.com
Abstract To stimulate sales of sustainable products, such as organic and fair trade products, retailers need to know whether their in-store instruments effectively enhance market shares. This study uses sales data and a multilevel modeling approach to explain the market shares of sustainable products according to shelf layout factors, price level, price promotions, and consumer demographics. It argues that the effect of these variables differs between organic versus fair trade products, as buying motives might differ, organic buyers tend to be more loyal, and price is a more informative signal of quality for organic products. Results show that the number of facings has a positive relationship with the market share of fair trade brands, but not with the market share of organic brands. The same holds for the price difference with the leading brand, which is important for fair trade brands but not for organic brands. In contrast, an arrangement of the product category by brand is associated with higher market share for organic brands but not for fair trade brands. Additionally, placement at eye level and clustering of items benefits both types of sustainable brands, whereas they appear to be not very sensitive to price promotions. Finally, higher sales of sustainable products are found in areas where the customer base is older and has a higher education level.
E. van Herpen Wageningen University, Marketing and Consumer Behavior Group, PO Box 8130, 6700 EW Wageningen, The Netherlands e-mail: [email protected] E. van Nierop (*) : L. Sloot Marketing Department, University of Groningen, Nettelbosje 2, 9747 AE Groningen, The Netherlands e-mail: [email protected] L. Sloot e-mail: [email protected] E. van Nierop : L. Sloot EFMI Business School, Heiligenbergerweg 5, 3833 AC Leusden, The Netherlands
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Mark Lett (2012) 23:293–308
Keywords Organic . Fair trade . Shelf layout . Price promotions . Market share . Sales data 1 Introduction As consumer consideration for the societal impacts of products has increased (Auger et al. 2008), organic and fair trade products have become part of mainstream food retailing. The ability to influence the sales of these sustainable food products grants supermarkets a key role in the development of “a greener, healthier, and fairer food system” (Sustainable Development Commission 2008). In this sense, many retailers not only carry organic and fair trade products but actively attempt to stimulate their sales using in-store marketing tactics (Just-Food 2004). To promote such sales, retailers need to identify the key drivers. Interestingly, although organic and fair trade products have often been lumped together as “green” products or as products concerning an ethical issue (e.g., Tanner and Wölfing Kast 2003; De P
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