Retail stores are segmented using socio-economic characteristics of the trade area and it is shown that the effects of store environment on store performance vary across segments. Store performance is measured by a market-based measure – sales and a productivity-based measure – sales per square feet. The internal store environment includes the number of checkout counters per square foot of selling area, the number of non-grocery products sold (extent of scrambled merchandising), whether the store at least doubles manufacturers’ coupons, whether there is a banking facility and whether the store is open for twenty-four hours. The external store environment includes the type of neighborhood it is located in. A methodology for predicting store performance (for existing and new stores) based on the type of environment and store location using aggregate secondary data is demonstrated. The proposed models are estimated and validated using Market Metrics geodemographic data for 646 grocery stores provided by A.C. Nielsen. It is shown how the findings of this retail environment study can be used to offer guidelines to retailers for attaining desired levels of sales and sales per square feet using readily available data.

The impact of internal reference price discrepancy (between actual price and internal reference price), and external reference price discrepancy (between actual price and external reference price) on brand choice is studied in two different contexts: whether the consumer faces a stockout condition at the time of purchase or not, and whether the consumer is a deal-prone consumer or not. Internal reference price based on the past prices paid for the brand by the consumer, and external reference price is dependent upon the prices of all brands in the category at the point of purchase. Hypotheses are tested by estimating brand choice models using IRI scanner panel data for two product categories-saltine crackers and baking chips. Results indicate that, in general, the impact of the external reference price discrepancy on brand choice is greater than that of the internal price discrepancy. However, this varies depending upon the contextual conditions. For consumers facing a stockout condition at the same of purchase, and for deal-prone consumers, the impact of the external reference price discrepancy on brand choice is greater than that of the internal reference price discrepancy. However, for consumers not facing a stockout condition, and for non-deal-prone consumers, there is no difference in the impact of the internal and external reference price discrepancy on brand choice. Also, the impact of both the external and internal reference price discrepancy on brand choice is greater for consumers not facing a stockout condition at the time of purchase relative to facing a stockout condition, and for deal-prone and non-deal-prone consumers. Implication for pricing strategies are discusses for retailers, and limitations and extensions of this study are also provided.

The variation in the impact of a brand's retail price promotion on its own sales (promotional price elasticity) and the sales of its competitors (promotional cross-price elasticities) during the period of the price promotion is studied. Brand characteristics and retailer policies significantly explain the variation in promotional price elsaticities and cross-price elasticities across brands. Results are used to offer guidelines to retail managers for planning promotions in terms of what brand to promote, and how and when to promote them under three different retailer objectives: (1) to liquidate inventories; (2) to maximize product category sales; and (3) to maximize product category profits. These guidelines can be used by retailers in taking actions that will result in desirable levels of responses to price promotions of a brand-promotional price elasticity and promotional cross-price elasticities.