The effectiveness of marketing activities and product innovations in retail self-service channels over the business cycles

Abstract

This project draws on the market dynamics and uncertainty for new food consumer-packaged-goods (CPG) products in an emerging market. The objectives are i) to investigate the performance of new product strategies for food CPG stock-keeping-units (SKUs) in self-service retail on different stages of business cycles; ii) to analyze the interaction between food CPG SKUs self-service retail marketing mix variables and macroeconomic factors on different stages of business cycles; and iii) to verify when it is worth to take the lead in recession and/or expansion periods by means of marketing investments and new products launching. The proposed research model uses monthly SKU level sales, market share, and in-store marketing mix data from self-service store audits conducted in Brazil by ACNielsen for more than 100 manufacturers, 500 brands and 5,000 SKUs in the categories of juice, carbonated soft drinks, cookies and yogurt. Panel vector autoregressions (VAR) will capture the effects of innovations and product lifecycle on sales and market share during a large business cycle containing expansion and contraction periods (2013 to 2016) in the country. The results are expected to be useful for marketers willing to know whether they should intensify or reduce new product launches in retail and in which marketing activities they should invest during different stages of business cycles, as well as to marketing researchers who recognize these issues as a prominent gap in emerging markets, where high volatilities in income, consumption and growth make new product management particularly challenging when compared to developed markets.