Study Emphasizes Retail Role in Product Development
Marketing Prof's Award-Winning Paper Goes Beyond Traditional Customer Focus
June 24, 2008
Whereas real estate seems always centered on “location, location, location,” the field of marketing seems equally intent on “the buyer, the buyer, the buyer.”
But the top marketing paper chosen by a management science group says new products need to take into account the needs and wants of the outfit selling the product—the retailer.
Dr. Brian Ratchford, the Charles and Nancy Davidson professor of marketing at UT Dallas, was recognized by the Institute for Operations Research and The Management Sciences (INFORMS) as the paper’s co-author. Named for John D.C. Little, the founding father of marketing science, the award is given annually to the best paper published in Marketing Science or Management Science.
The research surveyed construction workers about a new tool they might use. With step one taken care of—determining consumer interest—a savvy manufacturer could move to the next critical step—generating interest from retailers and assessing their needs.
“In designing products, manufacturers need to account for the needs of the retailer and the needs or preferences of consumers,” Ratchford said. “The paper provides a method for doing this that can be applied in practice. A newly developed product can greatly benefit if the manufacturer will work strategically with the retailer instead of just focusing on consumers.”
Based on the study, Ratchford and co-authors Lan Luo, assistant professor of marketing at the USC Marshall School of Business, and P.K. Kannan, associate professor of marketing at the University of Maryland, developed an approach to positioning and pricing a new product that directly incorporates the retailer’s acceptance criteria into the development process.
The method also takes into consideration the retailer’s product assortment and how competing manufacturers might battle back with wholesale pricing skirmishes.