The Effect of Multi-Purpose Shopping on Pricing and Location Strategy for Grocery Stores

Provided by: Reed Elsevier
Topic: Software
Format: PDF
Though it is a well-accepted fact that consumers indulge in multi-purpose shopping, most previous models of store choice assume that grocery shopping trips are single-purpose trips. This paper provides the first empirical analysis of multi-purpose shopping using data on actual shopping trips. A latent class factor analytic logit model is proposed, which provides a representation of the market structure of grocery store competition, while integrating; multi-purpose shopping, retail pricing format and location strategy. The paper concludes that incorporating multi-purpose shopping trips provides a better understanding of the competitive market structure, and discusses the managerial implications for the selection of marketing strategies.

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