Abstract
PurposeThe study develops a decision support system for the spatial distribution of store flyers, identifying a number of factors related to the demand and the competition influencing the complexities of their allocation to the target population.Design/methodology/approachThe model was developed incorporating the insights found in existing marketing literature and bypassing the limitations of the managerial practices. To this end, an in-depth discussion with a panel of retailers was held. The model was tested in collaboration with a retail chain.FindingsThe proposed system is flexible and provides an almost endless array of solutions in accordance with the retailer's strategic approach to the market. It captures the key trade-offs that need to be made during the decision-making process of a retailer with limited marketing resources.Practical implicationsThe traditional managerial approach, based on a set of operational steps, is overtaken by a model that systematically considers the interrelationships between the decision-making factors involved.Originality/valueThis is the first attempt to analyse spatial distribution of store flyers, a topic that has yet to be explored in retail marketing research. The paper conceptualises the key variables which affect the optimisation problem and reviews the different streams of extant research to obtain the appropriate insights.
Highlights
Store flyers are an important medium for retailers of consumer packaged goods
A recent study aiming to measure the effectiveness of print versus online store flyers showed that 80% of an Italian retail chain customers respond to both versions while 20% of the customers display a higher response to print (Ziliani et al, 2019)
The test phase proved the validity of the model and its ability to enforce a rigorous decision-making process. This is the first attempt to analyse the spatial distribution of store flyers, a topic unexplored in prior retail marketing research
Summary
Store flyers are an important medium for retailers of consumer packaged goods. They play a strategic role in generating store traffic and shaping regular customers’ purchasing behaviour. The census tract is used as the minimum geographical unit to link the internal data set (loyalty card information), the exogenous information concerning the demand (number of households and inhabitants, grocery expenditure per capita) and the competition (number and selling area of competing modern stores by store format) to the same geographical scale This spatial disaggregation allows to achieve a twofold objective: on the one hand, making marketing decisions based on the in-depth spatial analysis of local market conditions; on the other hand, the advantage of flexibility in planning the logistical process of door-to-door flyer drops. For the inter-format competing stores, proximities are: pðl; gÞ; l 1⁄4 1; . . . ; L; g 1⁄4 1; . . . ; G: The probability that any of the L inter-format competing store is visited by the households living in a census tract g is given by: Isg 1⁄4 PLl1⁄41Lpð3l;δgsÞ1ðl;gÞ; g 1⁄4 1; . . . ; G; with a For similar interpretation the competing stores, of Ifg and Icg. the probabilities
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