On the Competitive and Collaborative Implications of Category Captainship

Yasin Alan, Jeffrey P. Dotson, & Mümin Kurtuluş
Academic
Current average rating    
Category Captainship
Key Takeaways

​What? Category captainship is beneficial for the retailer and the captain manufacturer

So What? Some competing manufacturers also benefit from category captainship, whereas others suffer.

Now What? Although the existing literature suggests that the manufacturers that closely compete with the captain may suffer from category captainship, we find that such manufacturers benefit, whereas the manufacturers that are in close competition with the private label suffer from category captainship.

​Article Snapshot: Executive Summaries from the Journal of Marketing

This article uses a unique dataset collected during a category captainship (CC) implementation to empirically examine the impact of CC on the retailer, the captain manufacturer, and the other manufacturers in the category.


Although category captainship (CC) has been implemented by many retailers and examined from a theoretical perspective, to the best of our knowledge, our study is a first attempt to empirically examine the outcomes of an actual CC implementation.

Our research demonstrates how joint consideration of assortment and pricing, the presence of a private label, and product characteristics may influence the outcomes of CC implementations.


Research Question

Although category captainship (CC) has been studied using both theoretical models and surveys, empirical evidence on the benefits and drawbacks of CC is scarce. The motivation has been to fill the knowledge gap about category captainship.  The researchers hypothesize that CC benefits the retailer and its private label as well as the captain manufacturer and that CC may benefit or hurt the other manufacturers in the category, depending on whether those manufacturers are in direct competitiion with the private label and/or the captain.

Methods

The researchers empirically examined a unique dataset collected during a category captainship (CC) implementation.  The empirical model enabled the researchers to understand how CC affects category decisions (e.g., pricing and assortment), which in turn determine whether category stakeholders (i.e., retailer, the captain, and the competing manufacturers) benefit or suffer from CC.

Findings

This research demonstrates how joint consideration of assortment and pricing, the presence of a private label, and product characteristics may influence the outcomes of CC implementations. Both the retailer's private label and the captain benefit from CC due to pricing and assortment changes. Manufacturers that closely compete with the captain benefit, whereas the manufacturers that are in close competition with the private label suffer because the retailer protects its private label.  Private label protection negatively affects category sales.

Implications

These findings shed light on how manufacturer-retailer collaborations may affect retail prices and product variety. Managers and researchers should keep in mind that category captains may influence retailers' pricing, assortment, and merchandising decisions. Retailers (e.g., Wal-Mart, Target, Kroger, etc.) and CPG manufacturers (e.g., P&G, Unilever, Kellogg) can benefit from our research, which illustrates how retailer-manufacturer collaboration alliances may affect the collaborating parties as well as the manufacturers that compete with such alliances.

Questions for the Classroom

  • Why do retailers and manufacturers engage in category captainship initiatives?

  • Do you have any managerial concerns regarding category captainship implementations?

  • How can a competing manufacturer (i.e., a manufacturer competes with the captain manufacturer) benefit from category captainship?


Article Citation: Yasin Alan, Jeffrey P. Dotson, and Mümin Kurtuluş (2017) On the Competitive and Collaborative Implications of Category Captainship. Journal of Marketing: July 2017, Vol. 81, No. 4, pp. 127-143.

doi: http://dx.doi.org/10.1509/jm.15.0196



Author Bio:

 
Yasin Alan, Jeffrey P. Dotson, & Mümin Kurtuluş
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