Abstract
AbstractIn the consumer packaged goods industry, category captain is the company (e.g., Pepsi) that retailers (e.g., Kroger) designate as the leader of an entire product category (e.g., carbonated beverages) and collaborate with to manage the product category through the process of category management. Much uncertainty exists about the consequences of category management. We use a unique data set on the ready‐to‐eat cereals category in which the retailer designated a category captain. In this paper, we find that category captain does not have more to gain in terms of market shares than other products within the ready‐to‐eat cereals category, alleviating antitrust concerns related to category management. In addition, we find that category captain increases the market share of products that are more price competitive, not necessarily that of its own products, which points to a category captain focusing on growing the category's market as it is incentivized to do so.
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