SHELF SPACING COMPETITION ANALYSIS OF LOCAL & INTERNATIONAL LIQUOR BRANDS (THE CASE OF LIQUOR PRODUCTS)

Abstract

The product proliferation is constrained by the limited store space and requires therefore an efficient decision making by the retailers about which products to offer and how to allocate the scare resource of shelf space. Assortment and shelf space optimization is one of the most important and difficult decisions that retailer managers have to face. Retail shelf management means cost-efficiently matching retail operations with consumer demand. Retailers need to match consumer demand with shelf supply by balancing variety (number of products), service levels (number of items of a product), and optimizing demand and profit via carefully calibrated prices. As a result the core strategic decisions a retailer must take involve assortment sizes (listing), shelf space management (facing), replenishing and pricing. Competition for Shelf Space means that the competition of each supplier of a retail store is competing for shelf space with all other possible suppliers of the store. In a sense each item in a store competes with all other items in the store for space. But the main competition any one item faces is that offered by other items in the same product classification. In addressing the research questions the student researcher considered the owner, manager and supervisor of the supermarket, minimarket and liquor shop or the employee of those organizations who decide the shelf space location with respect to the imported and local liquor product as respondents. Concerning the sample size, supermarkets, Minimarket and liquor house available in Addis Ababa was considered. Convenience sampling approach was used since their exact number and list of respondents is not available and this helps to get accurate data in terms of time and space.