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PRIVATE LABEL AND NATIONAL BRAND '
PREPARED FOODS
A PILOT STUDY OF THE RELATIONSHIP
OF
SPACE ALLOCATION TO NET PROFIT

By

Gordon D. James

A THESIS

Submitted to
Michigan State University

in partial fulfillment of the requirements

for the degree or

MASTER OF BUSINESS ADMINISTRATION

Curriculum of Food Marketing Management

College of Business and Public Service

1962

THFC‘ .. I?

PREFACE

To date, much lip service has been given to the sub-
Ject of maximizing profits by properly allocating shelf
space to products stocked. Empirically, it would seem
that shelf space is currently being allocated on a hit or
miss basis.

The increasing number and impressive growth in sales
of prepared food products has enticed retailers to add
prepared foods to an increasing line of private label
merchandise. Prepared food sections, therefore, have be-
come areas which are seriously in need of a method for
determining that allocation of shelf space which would
maximize the sales and net profit realized by the retailer.

The author's interest in increasing the sales and
profits realized from prepared food sections originates from
his experience in prepared food sales. No implication of
expertise is meant to be implied from this interest, only a
sincere desire to gain a further insight into a problem-
atical situation.

The purpose of the pilot study was to test the applic-
ability and reliability of the research design which is
presented in Appendix A. The research design provides a
method for'maximizing net profit through the proper allo-
cation of shelf space to private label and manufacturer

‘brand prepared foods.
iii

iv

The scOpe of the study is limited to the Kroger store
which is located in Frandor Shapping Center. Lansing.
Michigan. The results obtained are representative of other
stores only to the degree that the Kroger, Frandor store
was representative.

It is hoped that the study will encourage further ex-
ploration and testing of the methodology to the end that
even greater net profits can be realized from the sale of
prepared foods.

The author should like to acknowledge the patient
understanding of his family and particularly the willing-
ness of his wife, Lois, to spend her few spare hours at the
typewriter; Dr. Daniel M. Slate, whose suggestions and
insistence upon organization proved invaluable; Dr. Edward
M. Barnet, who has provided guidance throughout the past
school year; the Kroger Company and its personnel for
allowing and cooperating in the study; and to the Campbell
Soup Company, who provided the author with the opportunity
to conduct the study.

TABLE OF CONTENTS

PREFACE O O O O O O O O O O O O O O O O O O O O 0

LIST OF TABLES O O O O O O O O O O O O O O O O O

I.

II.

III.

IV.

INTRODUCTION . . . . . . . . . . . . . . .
Problem .

Objective . . . . . . . . . . . . . . . .
Hypothesis . . . . . . . . . . . . . . . .
Method 0 I O O O O O O O O O O O 0
Significance of the Pilot Study . . . . .

PRIVATE LABEL VERSUS MANUFACTURER'S BRANDS

Reasons for Stocking Private Label
Merchandise . . . . . . . . . . . . . .
Reasons for Stocking Manufacturer's
Label Merchandise . . . . . .
Entry of Private Label Prepared Foods . .

RESULTS OF THE PILOT STUDY . . . . . . . .

Preliminany Steps . . .
Phase 1 O O O O O O O 0
Phase 2 . .

Space Allocation Method
Phase 3 e e e e e e e 0

SUMMARY AND RECOMMENDATIONS . . . . . . . .

Summary . . . . . . . . . . . . . . . . .
Recommendations . . . . . . . . . . . . .

APPENDIX A O O O O O 0 O O O O O O O O O O O O 0

Research Design--In-Store Experiment . . .

APPENDIX B . . . . . . . . . .,. . . . . . . . .

The Consumer Survey . . . . . . . . . . .

BIBLImRAPHY O 0 O O O O O O O O O O O O O O O O

Page
iii
vi

(D NU‘IU'I-b-L‘

15
17

19
21
23
26

29
35

41

42
43

45
47
74
75
99

Table

10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.

21.

LIST OF TABLES

Per Cent of Dollar Gross
Per Cent of Dollar Sales
Space Allocation: Phase

Sales and Net Profit:

Profit . .

O O O O O O

1 O O O O 0

Phase 1 . . .

Price and Gross Margin of Profit . .

Sales and Net Profit:

Derivation of Maximum Space Allocation

Space Allocation: Phase
Sales and Net Profit:
Net Profit:
Net Profit Per Unit Sold
List of Stores by Area .
Operational Data Sheet .
In-Store Data Sheet . .
Tabulation Sheet - Sales
In-Store Data Sheet . .
Tabulation Sheet - Sales
In-Store Data Sheet . .
Tabulation Sheet - Sales

Population List--Spartan

Phases 1, 2,

Phase 2 . . .

3 . . . .

Phase 3 . . .

and 3 . .
by Phase .

and Profits

and Profits
Village: A

Housing
Deve10pment for Married Students Attending

Michigan State University, East Lansing,

Michigan 0 O O O O O O

Questionnaire . . . . .

vi

Page

11

85
95

INTRODUCTION

INTRODUCTION

Supermarket operators and grocery manufacturers are
concerned with the premium which has been placed upon shelf
space in supermarkets today. The lack of available shelf
space has resulted from the rapid increase in the number of
items which are currently stocked by supermarkets. An
important contributor to the increased number of items has
been the broadening of product lines packed under private
labels.‘

Because of a rapid growth in sales, canned prepared
foods have been selected for study.2 The success of pre-
pared foods can best be seen in the number of new products

which have been introduced to the public as well as the

 

__.v

1The term "private label" or "private labelled pro-
duct" refers to any product label which is manufactured,
distributed, or controlled by a wholesale or retail grocery
organization. The products may be labelled under any name
other than that of the manufacturer, except when the name
of the manufacturer and retailer are one and the same. An
example would be A & P or KrOger.

2For the purpose of this study, "prepared foods" will
be considered to include only canned products whose basic
ingredients have been blended into a new form during pro-
cessing. Prepared food products can be served without
further processing, except possible heating. Canned fruits,
vegetables, unblended Juices, meats, and other such items
would be excluded by definition. Included would be canned
soup, spaghetti, chili, and pork & beans.

increased over-all usage by consumers. The sale of soups,
for instance, has been increasing in the last ten years at
a rate 60 per cent greater than the rate for all foods com-
bined. Soup consumption in 1960 rose both as a total
national figure and on a per capita basis.1

From the point of view of the manufacturer, the sales
of prepared foods have been built on the premise of product
differentiation and brand loyalty. Competition has been“
primarily concentrated between a handful of manufacturers.
The sales of a private label prepared food item will depend
a great deal upon the degree of simulation of the taste
preferences of consumers which have been developed by manu-
facturer brands.2

Competition among retail grocers has created the use
of trading stamps, tape plans, and low prices, which have
caused a reduction in net profits. Little wonder that
grocers have introduced private label prepared foods in
hopes of capitalizing on the growth rate and increasing
already narrow profit margins.3

Personal observation would indicate that, in many

cases, space has been allocated to private label prepared

1"Memo for Merchandisers," Super Market Merchandising,
XXVI, No. 11 (November, 1961), p. 79.

2For the purpose of the study, a "manufacturer brand"
will be any product which bears the name of the manufacturer
and may be purchased for resale by any or all grocery re-
tailers. The product may also be referred to as a "national
brand."

3”Where We Stand Today in Private Brand Merchandising,"
Progressive Grocer, XXXVIII, No. 8 (August, 1959), p. 46.

foodain a non-rational manner. Usually the product shelf
facings of the manufacturer's brands have been reduced to
accommodate the private label products.

The national brand manufacturer contends that a dis-
proportionate allocation of space will reduce sales and
cause the retailer to realize less than maximum profits
from prepared food sections.1 The retailer, on the other
hand, will often take the point of view that net profit can
be best increased by "pushing" the private label product in
order to capitalize upon the greater percentage of gross

profit carried by the product.

ZIQDLBI.

The problem of this study is twofold: (1) to deter-
mine whether or not a relationship exists between the amount
of space allocated to prepared food products and the net
profit realized from the sale of those products, and (2) to
determine whether the amount of space currently allocated
to private label and manufacturer brand prepared food pro-

ducts achieves net profit maximization.

Objective

The objective of the study is to construct a model

for determining the allocation of space to private label

 

1The term "retailer" is used to designate any store
or organization of stores whose business function is the
sale of grocery products directly to final consumers.

and manufacturer brand prepared foods that will allow a
maximization of the net profit derived from the sale of

these products.

Hypothesis

It is hypothesized that the supermarkets in the
Lansing, Michigan area over-emphasize the amount of shelf
space which is allocated to private label prepared foods.
Thus, less than optimum pgp pppfit is being realized from

the space utilized for prepared food sections.

Methgd

An in-store experiment was designed to measure accu-
rately the sales and net profit per linear foot of shelf
space for both private label and manufacturer brand prepared
foods. The measure of linear feet was selected rather than
square or cubic feet in order to assure uniformity and
simplicity in conducting the study.

The term, square feet, has been used in many different
manners by the grocery industry. Square feet measurements
have been used in conjunction with floor area, selling
area, horizontal shelf area, and vertical shelf area. The
lack of agreement by the industry regarding the use of
square feet measurements, could lead to a misinterpretation
by persons who may read the study.

The problem of using cubic feet as a.measurement is

the matter of vertical distance. The space above the top

shelf would have to be of a standard height. Unfortunately,

the heights to which products are stacked on top shelves
varies from store to store.

The term, linear feet of shelf space, has a common
meaning among members of the food industry. It is defined
as 12 inches of space, measured horizontally along the
front edge of a shelf. The actual measurement process is
explained in detail in Appendix A.

The in-store experiment was conducted in the Kroger
Super Market located in Frandor Shopping Center, Lansing,
Michigan.‘

Three controlled experiments were conducted in this
store. The first phase of the experiment was designed to
measure the sales and ppp,pppgipp_of six canned soup items
and three canned pork & bean items from the shelf space
currently allocated to them.

The second controlled experiment also measured the
sales and profits of the nine items mentioned above. The
only condition which varied was the space allocated to each
item. All related items were assigned an equal amount of
shelf space.

The third experiment utilized the results of the first
two experiments to determine the optimum space allocation

for the products involved. By so doing, it was possible to

increase the net profits realized from the sale of the products.

 

1The factors considered in selecting this store for
study are presented in Section III, p. 20.

All data was collected through observation and was
manually tabulated. The nature and scope of data and tabu-
lations, product characteristics, control factors, and the
calculation of Optimum space allocation are discussed in

Appendix A.

Sigpificanpe of the Pilot Spud:

The pilot study was utilized to test the Operational
procedures and tabulation forms which comprise the research
design presented in Appendix A. The research design con-
tains a program for expanding the pilot study to include a
cross-section of Greater Lansing supermarkets. Time and
financial limitations prevented the author from undertaking
the complete study.

In addition, Appendix B includes a preliminary re-
search design for a consumer preference survey which could
be conducted in conjunction with the space allocation study.
The consumer preference survey should be utilized to attempt
to isolate the reasons for the lack of direct relationship
between the amount of space allocated to a product and the
sales of that product, which was prevalent in the pilot
study.

The study and research designs presented in this
paper are intended to serve as the basis for further re-

search.

II

PRIVATE LABEL VERSUS MANUFACTURER'S BRANDS

II
PRIVATE LABEL VERSUS MANUFACTURER'S BRANDS

The so-called "Battle of the Brands" for shelf space
in supermarkets is not new. Indeed, the controversy of
private label versus national brand merchandise is a sub-
ject which has been bashed and re-haahed by food industry
personnel, students, and academicians for decades. It is
not the purpose of this paper to regurgitate a historical
resume of the pros and cons of this controversy. However,
a brief review will be presented in order to establish a

frame of reference for the presentation of the study.

R s to t ck P v e e e dise

Compepitive Reasmns

Why does a supermarket stock private label products?
.Mru Harley V. McNamara, president of National Tea Company,
Ihas stated that National would add a private label product
only when forced to do so by competition.1

What Mr. McNamara means by "forced to do so by the
competition" can, at best, be conjectured. Empirical obser-

vation would indicate that private label products may be

 

Marley V. McNamara, "The New Face of Distribution,"

Super Mapket Merchandising, XXV, No. 8 (August, 1960), p.
1 .

9

10

added in order to prevent a competitor with a private label
merchandise line from having a competitive edge in the pro-
duct mix offered to consumers. Private label merchandise is
usually sold at a lower price than competing national brands.
In essence, the competitive edge is achieved by offering a
line of lower-priced merchandise to the consumers.

Competition alone, should not be the criterion for
stocking a private label item. StOp and Shop Supermarkets
in Boston insist that a private label product will not be
stocked unless:

1. It shows volume sales.

2. Its quality is equal to competing national brands.

3. It provides a savings to the consumer.

4. It must be profitable to the retailer.1

It is to be acknowledged that supermarkets are obtain-
ing many private label products of a quality comparable to
that of national brand products. The products are purchased
at a lower price and, consequently, may be sold profitably
at a lower retail price. In some instances, manufacturers
of national brand products are today selling the same pro-
ducts with respect to formulation and quality under private
labels, and at prices as much as one-third under the prices

for the national brand.2 The Federal Trade Commission is

 

‘Donald A. Gannon, "Private Labels, Cooperative

Advertising, Profits," Supep Mapket Merchppgisipg, XXIV, No.
5 (May: 1959): p. 113-

2Letter from Mr. W. B. Nixon, General Sales Manager,
Campbell Sales Company,_Januany 19, 1962.

11

currently investigating practices Of this nature to deter-
mine if the participating companies are guilty Of price

discrimination.

The Pppfit Viegpoinp

It has been shown that private label merchandise is
purchased and sold at lower prices. Competition today has
created the use Of trading stamps and low retail prices
which, coupled with higher overhead and Operating costs,
has caused a reduction in the app profit realized by the

supermarket Operator. Consequently, emphasis is being

placed upon private label merchandise in hopes of increasing

already narrow profit margins.1

The following tables will provide a comparison
between the percentage of gross sales and percentage Of
ggppp,profits realized from private label products in se-
lected voluntary groups and regional chains during 1958.

TABLE 1

PER CENT OF DOLLAR GROSS PROFIT
(Categories with Private Label
and National Brands)

 

VOluntary Groups Regional Chains
Private Brands 27% 22%
National Brands 73% 73%
Total 1001 100%

 

 

 

1"Where We Stand Today in Private Brand Merchandising,"
Progressive Grocer, XXXVIII, NO. 8 (August, 1959). p. 48.

12

TABLE 2

PER CENT OF DOLLAR SALES
(Categories with Private
Label and National Brands)

 

 

Private Brands 25% 16%
National Brands 75% 34%
Total 100% 100%

 

 

 

Source: Pppgressive groceg, XXXVIII, NO. 8 (August, 1959),
p. 48.

A review Of the tables will show that private labels
accounted for 25 per cent of total dollar sales and 27 per
cent Of dollar gpppp profit in the voluntary groups. In
the regional chains, private labels accounted for 16 per
cent of the total dollar sales and 22 per cent of dollar
gm profit.

It can be inferred from these figures that private
label merchandise returns a greater percentage of gpppp,
profit. The question must then be asked, "What is the re-
sultant ppp_profit realized from the sale of private label
merchandise?"

Here lies the real problem. NO one seems to know
exactly what it costs to sell a particular product.1 With-
out this knowledge an accurate economic appraisal of a pri-

vate label or, indeed, any product is impossible. It is

1"Brand PhilOsOphy, the Vbn's Way," Su r ke
Merchandiging, XXV, NO. 7 (July, 1960), p. 3%.

 

13

time for the food industry to cease operating on the basis
of rules of thumb and emotionally founded decisions.

Net profit, the criteria for ppplppgl decision-making,
can be determined for an entire store by deducting the total
Operating and overhead expenses from the gm profit
realized from sales for a given period of time. Operating
and overhead expenses include the following costs: real
estate, depreciation, indirect labor, direct labor, adver-
tising and promotion, trading stamps, utilities, and a
Portion of warehouse and general Office expenses (see
Appendix A). To ascertain the net profit contribution of a
Given product, it is necessary to determine that portion of
total Operating and overhead expenses incurred in the sale
01’ that product.

.A portion of the above expenses could be assigned to
eacki Ixroduct stocked on the basis of time-and-motion studies
and a complete engineering survey. The prohibitive cost of
such a study renders it impractical. This paper presents a
methOd for allocating Operating and overhead expenses on
'm19 \Dasis of the amount of linear selling area utilized by
each product. The application of this methodology permits
°°mputation or the m profit contribution for a given pro-
duct, The perpetuity of a firm will be insured through the
utilization of net profit as a criteria for rational

decision-making.

Customer Loyalty to Brand and Store

Store loyalty is another argument for private labels.

14

Supermarket Operators feel that customer preference for a
private label can be a factor which will distinguish their
store from competitors. The existant problem is to develop
profitably a consumer preference for the private labelled
products.

A recent study was conducted by Rose M. Cunningham of
the Massachusetts Institute Of Technology to determine the
relationship between customer loyalty to store and brand.1
The study was conducted among members of gpg,Chicago
Tribune consumer panel. The study points out that families
win: high store loyalty are somewhat more loyal to the
particular private brands they purchase than are families
with lower store loyalty.

Two factors Of the study are of particular interest.
First, a significant correlation between store loyalty and
loyalty to private label canned prepared foods does not
exist. Second, the data does not answer the question, "Is
store loyalty more likely to lead to private-brand loyalty,
or is private-brand loyalty more likely to lead to store
loyalty?"

Some of the reasons for stocking private label mer-
chandise have been presented. It is not intended to deter-
mine whether Or not private label products should be stocked,
but rather to indicate the reasons for stocking that are

presented by retailers. The next step will be to present

1Ross M. Cunningham, "Customer Loyalty to Store and

Brand," H vs Busi ess Review, XXXIX, NO. 6 (November-
December, 1961), pp. 127-137.

15

the reasons for stocking manufacturer's label products.

ReasOQs for Stogking Manufactuygr's

bel Mer h i e

Consume; pemand

A safe assumption would be that a supermarket Oper-
ator would not purchase or continue to stock an item if the
product was not purchased by the ultimate consumers. The
assumption,being correct, would lead to the fact that con-

sumezr demand for the product exists. What creates this

demand?

As ce of ali .--It has been said that a con-
sumer can be led to a display, but cannot be made to pur-
chase; Or more importantly repeat the purchase.1 The
growth of successful food manufacturers must have been
dependent upon repeat sales to the ultimate consumer.

If the quality of the products had not been satis-
factory in the past and was not expected to be of at least

equal quality in the future, these repeat sales would not

have occurred.

Adyertising.--Advertising of manufacturer brand pro-
ducts in the various media is primarily institutional in
nature. The purposes of such advertising is to create an
appeal which will motivate the consumer to purchase; to

build brand loyalty based on a quality image; and to encourage

‘Gahnon, p. 113.

16

additional purchases by providing the consumer with new and
interesting ideas for serving or preparing the product.

In addition, many manufacturers provide cOOperative
advertising allowances to assist the retailer financially in

promoting the products directly to the consumers at the

store level.

New Products Create New Markppp_

Much has been written on the value of new products in
creating new markets, especially for convenience foods. .
Consumer eating patterns have been in a state of flux since
the end of HOrld War II. The new product innovations of
national brand manufacturers have been at least partially

responsible.

The 1961 annual report of the Campbell Soup Company
states that new products which were introduced during the
past ten years accounted for over one-third Of the Company's
sales for fiscal 1961.

Perhaps the best summation of the value Of manu-
facturer's brand merchandise can be presented by quoting
Harold G. Ward, Sales and Merchandising Manager of Von's

Super Markets:

I believe the difference (growth in food sales) has
been made by the manufacturers. They have used
continuous advertising to get the customer to give
more toward her food budget by buying all of the
"extras" such as added convenience, new taste sen-
sations, more gracious entertaining.

Private labels dO not adventure. They cling to the
coat-tails of the efforts made by Brand Manufacturers,

17

. . . Private labels don't pioneer new products. . .
We welcome new products.

Much of the innovation in new product develOpment can

be credited to the manufacturers of prepared foods. The

number Of new products introduced by the Campbell Soup
Comp my during the 1961-62 fiscal year represents the

largest number Of new consumer-tested products ever intro-
duced by that company in a single year.2

Despite the rapid growth Of prepared food items, the
current literature fails to recognize the resultant space

allocation problems occurring within the prepared food

3901310118 in retail stores. The re-emergence of private

label prepared foods is a contributing factor to the allo-

cation problem.

Entry of Pp;vate Label Prepared {gods

The entry of private labels into canned prepared
fOOdg Was originally made during the early 1920's by whole-

sale Srocers and multiple store Operators. The primary

items involved were pork 5. beans, spaghetti. and, in many

c3393. one or more kinds of soup.:5

The existence of these private label products con-
m~11ue<1 until World War II when most of them disappeared
from the market because of the relative shortage of £0061

p1"°d‘-1cts.

\
1"Brand Philosophy, The Von's way," p. 40.

2Campbell Soup Company Annual Report, Fiscal year 1961.

3w. B. Nixon, personal letter.

18

During the past five years distributors once again
have begun to expand the lines Of private label products.
The expansion Of private label product lines and the rapid
growth in total number Of products stocked by supermarkets
has created the problem of space allocation and management.

Store managers have a tendency to view private label
Products as "their" product and treat them accordingly when
allocating shelf space. The attitudes of supermarket Oper-
atora, combined with the rapid increase in number Of items
stocked and confronted by a limited amount Of sales space,

formulates the problem at hand.

III

RESULTS OF THE PILOT STUDY

III

RESULTS OF THE PILOT STUDY

The pilot study was conducted in the Kroger Super
Market which is located in Frandor ShOpping Center. The
Kl‘Oger- store was selected for the following reasons:

1 - Frandor Shopping Center provides shopping

facilities second only to the downtown area
and is patronized by a broad cross-section
of the Greater Lansing pOpulation.

2- The Kroger store is located in the shopping

center.

3- The store is one of the larger volume super-

markets in the Lansing area.

4- The management of the store was permissive

toward the study.

The study was conducted during the period from Janu-
ary 8’ 1962, to March 5, 1962. This period was divided
into three phases. One week was selected from each phase
for the purpose of comparison. The data presented repre-
sents the weeks selected.

Selection was made on the basis of total store sales.
T01; 31 store sales for the selected weeks did not vary more

than
1 3 per cent. A request for anonymity prevents the

20

21

usage of actual store sales figures. The weeks were also
similar in that the test items did not receive any adver-
tising or merchandising support of any type. In addition,
close personal supervision was utilized in order to prevent
an out-of—stock condition from arising. The following
evaluation of the study is presented in chronological
“Quence so that it may be repeated and improved upon in

subsequent experiments .

Pre iminar Ste

Initial Interviews

Time first step was to interview the store manager and
“flat-ant manager in order to obtain permission to conduct
the Study. The interview was carefully planned, although
not atar'uctured, so as to assure that the store management
was informed as to the subject and DuPPOBG 01' the “HGT;
“11° would. conduct the study; and how the store was selected
f” the study. The interview should be considered as a
carefully planned sales presentation.

After receiving permission to conduct the study, the
head stool: clerk and the chief of the night stocking crew
were Contacted. The nature and purposa Of the study W83
presgut-ed to these persons and their cOOperation was re-
quested. This step should not be overlooked as the persons

re
813C“leible for shelf-stocking were Of invaluable aid in

co
“trolling the stability of space allocation during the

22

The head stock clerk was responsible for the order-
ing of merchandise. His awareness of the study procedures
assisted in maintaining the prOper level Of product inven-
toriea during the study. Products ordered during the study
were geared to the planned changes in space allocation
which prevented the occurrence of an abnormally high inven-

tory on any item.

Cost and Measurement Data
The procedure for tabulating operating cost and linear

footage of sales area is presented in detail in Appendix A.
A total cost concept was applied, as net profit rather than
gross profit was used for evaluation. Imputed or Oppor-
tunity costs were not included in the study as it was felt
that the inclusion Of these costs would not significantly

alter the results Of the study.

\Relocat ion of Products
In order to avoid possible bias, all comparable test

items Should be stocked on the same shelf level.1 It was
necessary to move Brand B vegetable soup and Brand B pork 8:
beans down one shelf level prior to beginning the study.

In each case, the item was moved only in a vertical
direction so that the resultant space and position occupied
within the product section was unchanSed with the exception

0
r being one shelf lower. Once the preliminary steps had
\ / *— —
1A detailed explanation of the bias involved is pre-

a
lighted in the section of Appendix A entitled "Conducting the
Deriment: Phase 1."

23

been completed, Phase 1 of the study was begun.

Pages 1

The initial step taken was to record the beginning
inventory and linear feet of selling area occupied for each
test item on the In-Store Data Sheet (see Appendix A). All
inventory counts were made on Saturday evening at 7:00 P.M.,
which is closing time. Since the store was not Open on
Sunday, the close Of business on Saturday was considered to
be the close of the business week. Accurate counts were
more easily obtained at this time as shelf inventories were
relatively low.

The purpose Of Phase 1 was to measure the sales and
net DPOfits of the test items from the same amount of shelf
space as occupied by those products prior to the study.

The amount of space allocated and the percentage of total
space for each product are shown in Table 3. Brand A and
Brand B represent the national brand items. Brand C repre-
senta the private label products. This coding is used uni-
formly throughout the study.

The store was visited daily in order to control the
Stab11 ity of space allocation and to prevent the occurrence
of an out-Of-stock condition. The visits also served to
insure that salesmen or store personnel had not installed
any Shelf talkers or other point-Of-sale advertising
materials which might bias the results of the study. No
cont-I‘Ol problems were encountered during the week selected

1‘
or Phase 1.

24

TABLE 3
SPACE ALLOCATION: PHASE 1

 

 

 

‘ Tomgpp Soup Vegeta 1e Souo Poyk a e 8
Percent- Percent- Percent-
Brand age of age of age Of
Linear total Linear total Linear total
inches space inches space inches space
A 44 50 22 50 27 35
B 22 25 11 25 14 18
C 22 25 11 25 36 47
Total 88 100 4A 100 78 i 100

 

 

 

 

 

 

 

Source: Appendix A.

The ending inventory count was made at the close Of
the business week. Table A shows the resultant total unit
sales, percentage of total sales, and the net profit or
loss realized for each test item.

The salient factors which evolve from Phase 1 are the
net losses which resulted and the relationship between per-
centage of space utilized and percentage of total sales.
The relationship can be seen by comparing Tables 3 and 4.
For instance, Brand B tomato soup occupied 25 per cent of
total space allocated to tomato soup, but accounted for
only 7.5 per cent of the total tomato soup sales.

The net losses shown in Table 4 do not necessarily
indicate that the product should not be stocked. The loss
does indicate that, although contributing to the fixed

25

TABLE 4

SALES AND NET PROFIT: PHASE 1

 
 
  

  
    

 
   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage Of Net Profit
Brand Unit Sales Total Sales or Loss
Tomato Soup
A 542 80.2 32.5590.
B 51 7.5 (1.2505 3
c L______§g 12.3 ( .53A 3
Total 677 100.0 3 .7743
Vegetable Soup
A 197 70.1 $2.7037 a
B 17 6.1 ( .5309)
C , 67 t21.8 .2004
Total 281 100.0 82.3732
Pork & Beans
A 186 60.6 82.7208
3 4 1.3 (1.0390 a
c 117 _38.1 (pp4200 a
Total 307 100.0 81.2618
8‘Net loss
Source: Appendix A

costs of Operation, the profits realized from the sale of

the product are not as great as the total cost which is

charged against the space occupied.

determining profitability was next examined.

The role played by selling price and gross margin in
Selling prices

26

and gross margins are shown in Table 5. The prices and per-

centages shown were constant through all phases of the study.

TABLE 5
PRICE AND GROSS MARGIN OF PROFIT

Pork a Beans
‘1——_—

To atO Soup Vegetable Soup

Selling Per cent Selling Per cent Selling Per cent
Price Margin Price Margin Price Margin

 

 

Brand‘

 

 

 

A 1/.35 10.9 2/.29 18.9 2/.29 22.1
B 3/.35 10.9 2/.29 18.6 2/.29 28.8
c .10 20.0 .10 20.0 2/.25 25.0

 

 

 

 

 

A comparison of the gross margin and net profit
(Tables 4 and 5) for any of the items quickly points out

the importance of turnover. Without volume sales, profit

margins are meaningless.
Phase 1 is a representation of profitability under

the space allocation conditions as established by store
personnel. Phase 2, to the best of the author's knowledge,

is a unique step in the analysis and evaluation of space

allocation.

Phgpe 2

Phase 2 was conducted in order to measure the sales
and net profits which would result when all test items were
afforded an equal sales Opportunity based upon space allo-

cation. With the exception of the amount of shelf space

27

allocated to each test item, all conditions and procedures
were identical to Phase 1.

The total space allocated to each product group, e.g.,
tomato soup, was approximately the same. Tomato soup occu-
pied 8 1 inches of linear space as Opposed to 88 inches in
Phase 1. Vegetable soup occupied 48 inches as Opposed to
44 inches in Phase 1. Total space occupied by pork & beans
remained the same. The variance in the space allocated to
soups was necessitated due to the fact that they were tray--

1 The variance in total space is not considered to

packed .
be large enough to affect the comparisons in the study
8181‘1 1 f icantly.

Pfithin each product group, each test item occupied
an eclual amount of linear shelf space. Thus, Brands A, B,
and C each accounted for 33-1/3 per cent of the total shelf
39939 allocated to each of the product groups. The result-
ing total unit sales, percentage Of total sales, and net
Dmf‘ita realized are shown in Table 6.

Several interesting observations can be drawn from
the results of Phase 2. Although the amount Of space occu-
pied by Brand A tomato soup was reduced by 39 per cent, the
relative percentage of total sales increased during Phase 2
v? 2.3 per cent. Conversely, the space occupied by Brand C

tomato soup was increased by 22 per cent and the resultant

 

1Tray packing is a method of stocking and displaying
products in half-case lots. If there are 24 units in each
tray, they must be displayed in segments of four or six

lAnita.

28

TABLE 6

SALES AND NET PROFIT: PHASE 2

 
 
   

  
       

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage of Net Profit
Brand Unit Sales Total Sales or Lose
Tomato Soup
A 567 82.5 4.2660
B 66 9.5 1.4955 3
C _55 8.0 123360 a
Total. 688 100.0 31.4345
Vegetable Soup
A 200 68.5 83.2840
B 25 9.0 ( .7660):
C 66 22.5 _1 .gj1§1_
Total 291 100.0 32.2842
Pork & Beans
A 100 62.0 3 .4590
g 16 10.0 (1.4910)8
45 __g§_..9. 11.9w
T°tal 1 161 100.0 (82.0780)a

 

 

 

 

aggt loss
urce: Appendix A
relatixre, ‘percentase of total sales declined by 4.3 per cent.
ankles results of Phase 2 indicate that a direct re-
lat1°n8h 1p between the amount of linear space occupied and
unit afilJLqeg does not exist. A similar comparison of the

0the
:- pr‘Oducts tested supports this finding. It should be

29

pointed out that the reduction of shelf space on Brand A
tomato and vegetable soup presented one control problem.

It was necessary to restock these products personally three
times during the week in order to prevent the occurrence of
an out-of-stock condition.

The stocking was necessary, as might be expected,
during the heavy business periods on Wednesday, Friday, and
Saturday. The store manager stated that store personnel
would have been unable to avoid an out-of-stock condition
during these periods; thus, lost sales would have resulted.

It should also be noted that sales of pork in beans
declined sharply during Phase 2. The loss of sales can be
attributed to the display at a reduced price of another
pork a: bean item. This display was maintained throughout
Phases 2 and 3. Although the pork a bean results are
Shown. the sales and net profit data are significantly biased
and ahouild not be viewed as representative.

The results obtained from Phases 1 and 2 were then
evaluated and the linear shelf space that would be a110-

cated to each product during Phase 3 W88 determined.

Space Allocation Method
Re t1‘3~°‘t.io s

The first, step necessary in the determination of
a
pa°° allocation is the recOgnition of the factors and
re
strictions that exist. For the purpose of this study,

the
1"Ollowing factors were considered.

30

1. The product-mix was to remain static.
2. The amount of space allocated to each product
group during Phase 1 was considered to be the
maximum amount of space available.
3. There is a minimum amount of shelf space which
must be maintained for each test product.
Factors 1 and 2 were predetermined and could not be
altered. The minimum amount of shelf space for each pro-
duct ( factor 3) must allow for the stocking of a quantity
of uni ts which is sufficient to prevent the occurrence of
an out—of—stock condition. For the soup items which were
tray-p ac had, the minimum space was determined by the size
01’ the shipping cases in which they were stocked.

The minimum linear shelf space for soups was deter-
Mined to be 11 inches with the exception of Brand B vege-
table soup which was eight inches. Adherence to these
Minimums allowed the stocking of 1-1/2 cases in the minimum
BP‘°°- The minimum space for pork & beans was determined
t° b° 1 1 inches which would allow the stocking of 1-1/2
cases or product.

After determining the product-mix, maximum space

restrictions. and the minimum space for each product,
attent1°n could be given the problem of maximizing the net

profit for each product group.

n
1’ 2‘ o o N t o it

In order to maximize the total net profit within each

pro
duet group, the net losses must be reduced. Optimum

31

space allocation would result when the gross profit realized
from the sale of each product equals or exceeds the total

cost of the space utilized by the product. Thus, net losses

would not exist.

Method of Allocation

111s method utilized to determine the space to be
allocated to each test item during Phase 3 is relatively
Bimple - The steps are shown below.
1.. Determine the total gross profit per week for
each product in both Phase 1 and Phase 2 by
multiplying the gross profit per unit by the

number of units sold.

gross profit : profit per unit x units sold

23.. Determine the maximum space which profitably
could be allocated to each product in both
Phase 1 and Phase 2 by dividing the gross
profit per week by the total cost per linear

inch of selling area per week.

gggsg profit per week _ maximum inches to

total cost per linear ‘ be allocated
inch per week
Table 7 shows the derivation of the maximum space

811
°°‘-tlon for each product based upon Phase 1 and Phase 2

sales,

32

TABLE 7

DERIVATION OF MAXIMUM SPACE ALLOCATION

 

 

 

 

 

 

 

 

 

 

 

 

Phase 1 Phase 2
Brand Profit pef week maximum Profit per week maximum
Cost per inear = allo- Cost per 1 near 2 allo-
azaz.) ' 123.122.,
Tomato Soup
c 1.0 i? 3 ‘5 .0135 3 "
Vegetable Soup
A 578%;- = 54 flfgfigg = 55
B 73% = 5 30 gg = 7
c lf6é%% = ‘3 1.3035 = ‘3
Pork dc Beans
B
.6 gg = 2 .3835 = 8
C 2. 235 = 35 lf%§%%'= ‘4

 

33

Its can be seen in Table 7, even though the amount of

space allocated to each product was changed between Phases

1 and 2, the maximum space which profitably could have been

allocated to each product remained virtually the same. This

gives additional support to the lack of direct relationship

between the amount Of space allocated to a product and

sales of the product which'was presented earlier.

Illlocation of space to each product during Phase 3

was determined in the following manner.

Tomato Soup:

1.

The minimum allowable allocation of space for
Brand B was 11 inches. This exceeded the maxi-
mum allowable allocation as determined for
either Phase 1 or Phase 2 (see Table 7). Thus,
the minimum established the allocation of 11
inches for this product.

The minimum allocation of space for Brand 0 is
11 inches which equals the maximum allocation
as determined for Phase 2. Because Of tray-
packing, the next larger space that could be
Occupied would have to be at least 16 inches.
This amount of space exceeds the maximum as
determined for Phase 1 (see Table 7). Thus,

11 inches was allocated to this product.
Brands B and C were allocated a total Of 22
inches. This space was subtracted from the 88

inches available for all tomato soup and the

34

remaining 66 inches was allocated to Brand A.

It should be noted that this amount is less

than the maximum allowable allocation for

either Phase 1 or Phase 2 (see Table 7).
Vegetable Soup:

The minimum allowable space for Brand B again
EBxceeded the maximum allocations as determined in
{Table 7. Steps 1, 2, and 3, as shown above, were re-

‘TDeated in order to determine the space allocation for

'the vegetable soup items. Brand A was allocated 27

:inches; Brand B, 8 inches; and Brand 0, 11 inches.

Pork 13: Beans:

As mentioned earlier, the sales Of pork & beans
*were affected by the display of a competing pork a
'bean product. This forced a Judgment as to the maxi-
xnum space which could be allocated profitably. The
mnaximum allowable space allocation was arbitrarily
(determined by averaging the figures as determined for
Iflnases 1 and 2 (see Table 7). The maximum allocation
‘hnould be 45 inches for Brand A, 5 inches for Brand B,
and 24 inches for Brand C.

‘I. Once again the minimum possible allocation for
Brand B exceeded the maximum profitable allocation.
Steps 1, 2, and 3, as described above, were re-
peated.

53. Brand A was allocated 42 inches; Brand B, 11

inches; and Brand 0, 24 inches.

3-5

3- The pork a: bean sales and net profit results
should not be viewed as representative because
Of the bias introduced both by the display and
by the arbitrary judgment made in the allocation
process.
Thus allocation method described above is designed to
allow for better utilization of existing shelf space. The

results Of the method can be seen by examining the results

for H1 ass 3.

Phase 3

Inns purpose Of Phase 3 was to evaluate the effective-
ness 0: the space allocation method develOped above. The
method was designed to permit a better utilization of exist-
ing shelf space. An increase in the net profit realized
is the desired result.

With the exception Of the allocation of linear shelf
space to the individual test items, all conditions and pro-
cedures were identical to Phases 1 and 2. The amount Of
space allocated and the percentage of total space for each
product is shown in Table 8.

Daily visits to the store affirmed that the allocation
provided adequate shelf stock to prevent the occurrence Of
an outrof-stock condition. The only control problem en-
countered was the continuation of the special pork a bean
display mentioned in Phase 2. This display) negated the

value Of the results obtained for pork a: bean sales.

36

TABLE 8

SPACE ALLOCATION: PHASE 3

 

 

 

 

 

 

 

 

 

Toma O Sgug Ve etab e Sou Pork Q, Beans
Percent- Percent- Percent-

Brand age of age of age of
Linear Total Linear Total Linear Total

Inches Space Inches Space Inches Space

A 66 75.0 27 59.0 42 54.5
11 12.5 8 17.0 11 14.5

C 11 12.5 11 24.0 24 32.0
Total 88 100.0 46 100.0 77 100.0

Source: Appendix A

Total unit sales, percentage of total sales, and the

net profit or loss realized for each test item are shown in

Table 9.

A comparison of the net profit results for Phases 1,

k

2, and 3 (Table 10) quickly discloses that a better utiliz-

ation of the existing shelf space not only was possible,

but was obtained.

The net profit realized from the sale of

tomato soup increased from 3.77 in Phase 1 to 33.63 in

Phase 3.

$4.57 in Phase 3 as opposed to $2.37 in Phase 1.

Vegetable soup sales yielded a net profit Of _

The only soup items that suffered a net loss during

Phase 3 were Brand B tomato and vegetable soups.

It should

be pointed out that the allocation Of space to these items

was restricted by the minimum amount Of space necessary due

37

TABLE 9
SALES AND NET PROFIT: PHASE 3

Percentage of Net Profit
Brand Unit Sales Total Sales or Loss

 

Tomato Soup

 

739

32. 9885

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A 1.7
s 57. 6.3 ( .2650)a
c 109 12.0 .9018
Total 905 100.0 83.6273
Vegetable Soup
A 248 72. 3 f4. 4743
B 16 4.4 .5032)a
C 79 23.3 .4008
Total 343 100.0 84.5719
Perk & Beans
g 163 63.4 s .7799 a
c 16 6.3 § .3985 a
78 30.3 .0540
‘1'0‘841 257 100.0 3 .3274
\
a'Net loss
Appendix A

o the tray-

pack method of stocking.

The net loss position

at
t"“986 items was expected prior to the beginning of Phase

3.

38

TABLE 10
NET PROFIT: PHASES 1, 2, AND 3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brand Phase 1 Phase 2 Phase 3
Tomato Soup
.A. 82.5590 34.2660 f2.9885
B 51.2505;EL 11.4955)El .2650)“
c .5342 9‘ 1.3360)fil .9018
Total 8 .7743 31.4345 33.6273
vegetable Soup
A 2.7037 3.2840 4.474)
B l .5309)’51 g .7660 a ? .3032)“
C .2004 .2338 a .4008
Total 82. 3732 82 . 2842 84. 5719
Pork a Beans
A
2.7208 8 .4590 8 .7799
2 31.0390” 1.4910 a ( .3985 9'
.4200)3 1.0460 3 ( .0540 5
:“131 31.2618 (32.0780)El t .3274

 

 

 

 

 

 

aNet loss
Ource: Appendix A
Thus net loss realized on Brand B tomato soup was re-
‘fiucgd from $1.25 in Phase 1 to 3.26 in Phase 3. The net
J—Osa 0:: Brand B vegetable soup was 3.30 in Phase 3 as Op-
é°3°d to 3.53 for the same product during Phase 1. The

$933 on Brand B and Brand C pork 1: beans was reduced even

39

though the sale Of these products was affected by the dis-

play mentioned previously.
The most significant evaluation is the net profit per
unit sold for each product group during each of the three

phases. The net profit per unit sold is calculated by

dividing the total units sold for any product group, e.g.,

tomato soup, by the total net profit realized. Table 11

shows the net profit per unit sold for each product group

during each phase .

TABLE 11
NET PROFIT PER UNIT SOLD BY PHASE

Phase Tomato Soup Vegetable Soup Pork 8. Beans

‘—

 

 

 

1 8.00114 8.00844 . 3.00411
2 .00208 .00785 (.0129o)a
3 1 .00408 .0155} .00127

 

 

a
Net. loss
S1‘~'>urce: Appendix A

The net profit per unit of tomato soup sold was in—
creaeed from one-tenth of a cent in Phase 1 to four-tenths

of a cent in Phase 3. Although small in dollar value, this

re
DreBents a 358 per cent gain. The net profit per unit of

‘ve ‘
getable soup sold was increased by almost five-tenths of

13 o
9111; (see Table 11).
The results of the pilot study appear to support the

Q1“-33.1181 hypothesis and to confirm the reliability of the

40

research design. The reallocation of shelf space to both
private label and manufacturer brands not only enhanced the
net profit realized from the sale of the individual items,
but increased the net profit realized from the space
utilized for all test items.

An excessive allocation of space to two of the three
private label products tested was-partially responsible for
the lower net profits realized during Phases 1 and 2.
Mutually responsible, however, was the excessive allocation
of space to Brand B products--all national brands. The
pilot study demonstrates significantly that the amount of
shelf space allocated to private label prepared foods should
not be influenced by the optical illusion of higher gross
profit margins. Shelf space should be allocated to private
label m manufacturer brand prepared foods on the basis of
the1r Eat profit contribution.

1316 methodology presented in the pilot study provides
the retailer with a weapon which will settle the age-old
"battle of the brands."

Recommendations for needed improvement and expansion

of the study are included in the next section of this paper.

IV

SUMMARY AND RECOMMENDATIONS

IV

SUMMARY AND RECOMMENDATIONS

Summan

In this era of increased competition and narrow pro-
fit margins, supermarket Operators must do everything within
their power to increase the p_e_t_ profit of their operations.
With the great numbers of new products entering the
competition for space on the supermarket shelf, the problem
or space allocation increases in its importance both to the
et-lper'rnarket Operator and the grocery manufacturer. Both
"‘6 engaged in a struggle for survival.

The supermarket Operator must use every tool at his
“99088.1 to bolster sagging net profits and at the same
time remain competitive. One method for increasing net
pror1t 13 through the prOper allocation of shelf space.
The question of how to utilize the existing selling area in
a 8L1p'firmarket more profitably prompted the develOpment of
this Pilot study.

The results of the pilot study indicate that within
the Store and for the products studied, an improvement in
net, IJI‘Ofit was achievable through better space allocation.
Shelf space was allocated on the basis of the product's net
egaming power. Each product, whether private label or

42

43

manufacturer brand, must earn the space it occupies if net
profits are to be increased. Therefore, the amount of
shelf space allocated to private label products should not
be determined by sentimentality 0r illusionary gross profit
margins. Shelf space must be allocated to each product on
the basis of its net’profit contribution.

The pilot study, although limited in scape, presents
a practical method for evaluating.and enhancing the net
profit contribution of prepared food products. Through the
application of this methodology, supermarket Operators now
will be able to allocate shelf space rationally to each
prepared food product on the basis Of its true profitability.

It is hOped that this pilot study will stimulate a
doctoral candidate or a research group with sufficient
interest and resources to continue and expand the scope of
the study. The pilot study should provide the inquiring
researcher with a bit of mortar which may be used in laying
the foundation which is so vital to the food industry.
With this thought in mind, the following recommendations

are included.

eco dat on

1. Control would be enhanced if a group or chain of
stores were selected rather than a market area as
is suggested in Appendix A. Advertising and mer-
chandising should be much easier to control at

general Office rather than store level.

2.

3.

44

With the aid of a computer and through the
utilization Of linear programming, the scOpe of
the pilot study could be expanded to include

all grocery products.

The study could be expanded to measure the ef-
fect that various product arrangements, location
of product sections, and vertical size of product
display have upon sales and net profit. Persons
undertaking research in this area should make
reference to a pilot study entitled Operation
Velocity, which was conducted in 1961 at Michigan
State University under the auspices of Dr. Edward
M. Barnet. The study presented in this paper and
Qperation Velocity are not completely homogene-
ous; however, with some revisions one could serve
to complement the other. If the study is expanded,
the proper space allocation should be determined
prior to varying other factors so that the study
will be conducted under Optimum net profit condi-
tions.

If time permits, a consumer preference survey
could be conducted in conjunction with the space
allocation study. The consumer preference survey
should provide insight into consumer purchase
motives. Consumer purchase motives may contain
the reasons for the lack of direct relationship

between the amount of space allocated to a product

45

and the sales of that product. This lack of re-
lationship between space and sales was experi-
enced during the pilot study. Appendix B of this
paper contains a suggested consumer preference
survey design. Although limited in scOpe, it is
hoped that the research design might serve as a
starting point for further study.

Further study Of the relationship of space
allocation to not profit is of vital importance
to the food industry. The contribution of those
persons who may embark into this area of study
shall be of great value to the largest industry
group in the United States.

APPENDIX A

RESEARCH DESIGN--IN-STORE EXPERIMENT

APPENDIX A

Research Design--In-St0re Experiment
Selection 0; Stores

The Judgment method of selection was used to divide

the Greater Lansing area into six segments.1 A street map

of the area was employed and the locations of supermarkets

stocking private label prepared foods were plotted on this
map.2
After plotting the location of the supermarkets, the

map was divided into six geographic areas. Main thorough-

fares, residential density, and number of stores were all
incorporated in the decision for the area segmentation.

This selection procedure should provide an adequate
cross-section of the entire shopping area. At least one
store was selected from each of the geographical segments.
Frandor ShOpping Center, which provides shopping facilities
second only to the downtown area and is patronized by a

broad cross-section of the Greater Lansing population, was

1William A. Spurr, Lester S. Kello , and John H.
Smith, Bu iness d EconOmi St tis ics Homewood, Illinois:
Richard D. Irwin, Inc., 195%). p. 103.

2The population was derived from a list of grocery

stores and percentage of total weekly sales. This list,
dated March, 1961, is located in the files of the Lansing

Stat a Journal .

47

48

selected as a single area.

The dispersion of test stores has been designed to
obtain a representation of all income, family size, ethnic,

and age factors.

The selection of supermarkets, in which the experi-
ment will be conducted, was based on two major factors.
First, supermarkets which were centrally located within
each area were selected. Secondly, the selection was de-
signed so that three of the four corporate chain organiz-
ations would be included. No attempt was made to include
A & P stores as their company policies would prohibit
participation in the study. ShOp-Rite, a cooperative chain,
was also included in the selection process. It is realized

that the exclusion of A & P stores will be a limitation of

the study.

Area 1.--Area 1 is located entirely within the city
limits of East Lansing, Michigan. 13;;an Brgthers ShOp-

Rite. 555 East Grand River, was selected for the experi-

ment.

Area 2.--The Frandor ShOpping Center, which is lo-
cated at Michigan Avenue and North Clippert Street,
encompasses the whole of Area 2. The Wziglgz, K o e , and
National E293 stores have been selected. All are located

in or adjacent to the shOpping center.

Area }.--Area 3 is bounded by: Harrison Avenue on

the east, East Mt. H0pe Avenue on the south, Pennsylvania

49

Avenue on the west, and Grand River Avenue on the north.
The National Food Store, located at East Michigan Avenue and

Ferguson Street, was chosen from this area.

Agea 4.--Area 4 is bounded by: Grand River Avenue on
the south, the Eaton County Line on the west, Wood.Street
on the east, and State Road on the north. The 52253;,St0re,

1721 North Grand River Avenue, will represent this area.

Area 5.--Area 5 is bounded by: Pennsylvania Avenue

on the east, Mt. Hope Avenue on the south, the Eaton County
Line on the west, and Saginaw Street on the north. The

Nagional Foog Store at West Mt. Hope Avenue and Boston

Boulevard, was selected as being representative of Area 5.

Agea 6.--The boundaries for Area 6 are: Pennsylvania
Avenue on the east, the New York Central Railroad tracks on
the north, Miller Road on the south, and the Eaton County
Line on the west. The store selected was DEBEEEQQLLQ
shes-Elis-

Arrangements for conducting the in-store experiment
will be made by personally interviewing the supermarket
operators. The interviewer will be responsible for inform-
ing the supermarket Operators as to the subject and purpose
of the study, who is conducting the study, and how the

store was selected for the study.1 In order to allow the

1J. Stacy Adams, lagerviewiag ProcedureaI A Maaual
for Survey Interviewers Chapel Hill: The University of

North Carolina Press, 1958), pp. 13-18.

SO

interviewer to have more flexibility while making arrange-
ments for this study, no attempt will be made to structure
statements or questions to be used in the interview.

The advantage of providing flexibility lies in the
ability of the interviewer to adapt the presentation to the
personality of the individual supermarket Operator. The
main disadvantage of this type of qualitive interview is
that the success depends directly upon the ability of the
interviewer.1 Because of the small number of stores to be
contacted, the same person will conduct all interviews.

Should a store refuse to permit the experimentation,
a second store will be selected from the area involved (see
Table 12). Because of the number of previous experiments
that have been conducted in the lensing area, very little

resistance is expected to be encountered.

TABLE 12
LIST OF STORES BY AREA

 

Store Location

Area 1

Prince Bmthezs Shop-Kite 555 E. Grand River, E. Lansing
Hauer s Shop-Rite 1109 E. Grand River, E. Lansing

1Albert B. Blankenship et a%., "Questionnaire Prepa-
ration and Interviewer Technique, a Report by a Sub-Committee
of American Marketing AssociationCommittee on Marketing

Research Techniques. 111W» m, No. 3

(October, 1949), p. 425.

 

Wrigley

09

National
Nationa;
Mike s ShOp-Rite

National

Kro e

N. East Shop-Rite
Hillard's ShOp-Rite

National

Nationa;

KrOger

wansend ShOp-Rite
Goodrich Shop-Rite

National

Kroger

Wrigley
Denstaedt's

8. Cedar Shop-Rite
L a L Shop-Rite

51

TABLE 12 (continued)

Area 2

Frandor Shopping Center
Frandor ShOpping Center
Frandor ShOpping Center

Area 3

East Michigan a Ferguson
2301 East Grand River

Area 4

N. Larch and Douglas
1221 N. Grand-River
2416 N. East
4206 N. East

Area 5

W. Saginaw and Logan

W. Mt. Hope and Boston Blvd.
4002 N. Saginaw

1910 N. Saginaw

2401 W. St. Joseph

Area 6

Jolly Road and S. Logan
2510 S. Cedar
3. Cedar and Jolly Road
3630 S. Cedar
2519 8. Cedar
5016 S. Logan

 

Note: Italics indicate stores selected for experiment.

flue Eageriment

Dazatign.--The duration of the entire experiment will

‘be sixzweeks and will be divided into three phases of two

weeks duration each.

52

The three phases of the experiment will be conducted
consecutively in order to minimize any seasonal conditions
which might affect the results of the experiment. Care
also should be exercised to avoid periods which would in-
clude religious holidays, such as the period of Lent or
Christmas. Religious diet restrictions or purchasing for
holiday festivities could positively or negatively bias the
results of a study conducted during such periods.

Each of the three phases should be as similar as
possible in all respects. Since many families are paid and
consequently purchase the majority of their grocieries bi-
weekly, the decision was made that each phase would be of
two weeks duration in order to negate the incidence of pay
periods.

The six week period beginning Monday, January 8, 1962,
and ending Saturday, February 17. 1962, will best serve the
needs of the study. Seasonal and pay factors will be as homo-
geneous throughout the entire experiment as for any other
period of the year. Pay periods are equally dispersed in
each of the two week periods. Cold weather will probably
dominate the entire period. Also, grocery purchasing will

be returning to a normal pattern after having been affected

by Christmas and New Year's.

Control facto:s.--In order to provide uniformity

throughout all phases of'the experiment, several factors

will have to remain static.

53

The first factor that would necessarily have to be
considered would be the test products. Two categories have
been selected for testing: canned condensed soups and pork

a beans. Selection was made on the basis of relatively high

sales volume and personal familiarity with the character-

istics of the categories.
The two varieties of canned condensed soups to be

tested are tomato and vegetable. Tomato and vegetable soup

are the only varieties, packed under private labels, which
are common to all stores included in the study.

In all stores the test will include the two varieties
of three different brands. Included will be the two lead-
ing manufacturer brands and the private labelled brand.
Observation of product sales in the Lansing area would tend
to verify the assumption that the largest selling brands
nationally, are also the largest selling brands locally.
Therefore, manufacturer brands were selected on the basis
of national sales figures. ' A code letter will be assigned
to each brand and will be used consistently throughout all
facets of the study.

Based on the previous assumption of national sales
figures, the test products for the pork a bean category will

include the two leading manufacturer brands and the private

labelled brand being stocked by the retailer. The study

wilJ..include only one-pound cans of pork & beans which are

packed in tomato sauce. The study will exclude other size

cans as well as pork & beans which are packed in molasses

sauce.

54

Observation of local sales would indicate that con-
sumer preference for the brands of pork & beans packed in
tomato sauce tend to simulate national sales figures. The
pork & bean test products will also be assigned code letters
which will be used consistently throughout the study.

Advertising and display also must be controlled.
Rather than attempt to measure the effectiveness of adver-
tising for any of the test items, all items will be devoid
of advertising and promotional activity during the study.
This will include point-of-sale advertising as well as
retail newspaper or other retailer-controlled media.

Another factor that will have to be controlled is the
out-of-stock condition. If any of the test items were un-
available for purchase at any time, considerable bias would
be introduced through possible substitution of brands or
non-purchase of the item by consumers. It will be the
responsibility of the survey workers to check the stores
frequently enough to prevent this situation from arising.

Care also must be exercised to assure that the shelf
space and position of the test items do not change during

each phase of the study. Such control must be maintained

by the survey workers.

Coadactiag the exparimen}: Phase 1.--The first two

weeks of the experiment will be known as Phase 1. The pur-
pose of Phase 1 is to measure the sales of the test items

from the shelf space occupied prior to the study.

55

The experiment will necessitate the utilization of
two research workers. Each worker will be responsible for
four stores. The first responsibility of the research
workers will be to relocate the products so as to conform
to the restrictions of the study.

As an experimental restriction, the only change in the
shelf position of a test item that will be made, will be a
vertical move. In order to obtain an unbiased result, each
comparable test item should be sold from the same shelf
level. That would mean that all three brands of tomato
soup would be stocked on the same shelf during the entire
duration of the experiment. All other factors being equal,
this will negate the possibility that a given level of shelf
may be a better selling position than other levels of

shelving.
A factor that should be considered is whether the eye

appead.of the total area of a particular brand's complete
line will have an effect upon the sale of a particular item
within that area. If such is the case, not only the total

area, but the number of products in the area would be

involved.

After much consideration, the assumption was made that
the sale of the test items might be dependent upon the
product-mix offered by the brand. An effort to eliminate
the value added due to product mix by removing the test
products from the environmental position occupied, would

have a tendency to bias the sales and net profits of the

test products.

56

Therefore, the lateral position of the test products
will not be changed. In addition, no changes will be made
in the amount of space allocated to each test product. The
second responsibility of the research workers will be to
control the stability of space allocation and shelf position
of the test items during the experiment.

The third responsibility of the research workers will
be to obtain and record the amount of linear shelf space
occupied and the unit sales for each test product. The
following procedure will be employed for the recording of
sales for each test item.

1. The research worker will physically count the
number of units on the shelf at the beginning of
each phase of the experiment.

2. Next, a count will be made of the number of units
which are currently on hand in the stock room of
the store. The sum of steps 1 and 2 will provide
a total beginning inventory.

3. At the close of the period, the worker will obtain
from the supermarket Operator, the number of units
received during the period. The number of units
received should be obtained from the retailer's
invoices and not from the order book. This will
prevent error due to shipping discrepancies. This
figure will then be added to the total beginning
inventory.

4. The closing inventory at the end of each phase

57

will be obtained by repeating steps 1 and 2.

5. The closing inventory (step 4) will then be sub-
tracted from the total beginning inventory plus
the units received (step 3). The remainder will
be the number of units of each product sold during

the period.

The research workers will also check each store at
least once daily to insure that the stipulated controls are
effectively maintained. In addition, the workers will
stock the shelves with prOduct if deemed necessary to pre-
vent an out-of-stock condition. Any instances where the

restrictions are not adhered to will be corrected immedi-

ately and noted on the report forms.

ghaae 2.--The middle twoJLeek period will be known as

Phase 2. All procedures and controls will be identical

with those in Phase 1.
The only difference between Phase 1 and Phase 2 will

be the allocation of space for the test items. During
Phase 2, space will be allocated equally to all comparable
:itemsm For example, each brand of tomato soup will have an
equal.amount of shelf space.

The position of each item will be exactly the same as
during Phase 1. Phase 2 is designed to provide a sales
comparison for all items with all possible factors being

equal"
By combining the results of Phase 1 and Phase 2, a

58

basis will be derived for the allocation of space for each
product during Phase 3. The methods to be employed are
described in Section III of the paper.

gas; 3.--The final two weeks of the experiment has
been designated as Phase 3. Again, as in Phases 1 and 2,
the same procedures and controls will be observed.

Phase three will differ from the previous phases in
the allocation of space for the test products. The shelf
space will be allocated on the basis of the sales per linear
foot of shelf space and net profit per linear foot of shelf
space as determined from the previous phases.

It is expected that the products being allocated on a
pro rata basis, will return a greater total net profit for
the linear footage of shelf space utilized. The total
shelf space utilized will be held constant through all three

phases of the experiment.

231%

The success of the entire experiment hinges upon the
accurate collection and tabulation of data. The collection
procedure will be carried out as outlined previously in the
appendix. To aid in tabulating the data, the following
forms have been designed. A brief explanation of the forms

should suffice to portray their Operationality.

Qperational data sheet.--The Operational data sheet,

Table 13, will be used for recording the basic store in-

formation. A sheet will be used for each store included in

59

in the experiment. The need for the store name (1). and

address (2), should be self-explanatory.

Section 3 is to be used to record the total Operating

costs per year for each store. To be included are:

mined

3a.

3b.

3c.

3d.

3e.

3:.
35-

3h.

31.

Total real estate costs--the amount of lease or
rental payments for a one-year period.

Total depreciation costs--includes depreciation
of building (if owned) and equipment.

Indirect labor costs--the total management
salaries paid to the store manager and assistant
manager including bonuses.

Direct labor costs--all wages paid to store
personnel (fringe benefits will be included
under "other" expenses).

Advertising and promotion costs--includes news-
paper advertising, handbills, point of sale
materials, and store decorations.

Stamps--the cost of trading stamps.

Utilities--heat, light, power for refrigeration
equipment, etc.

Other costs--includes supervisory expenses and
an allocation of office and warehouse overhead
(usually allocated on the basis of total sales).

Total costs-~the sum total of all above-mentioned
costs.

The total linear feet of selling area (4) was deter-

as follows:

4a.

Grocery-~this figure is obtained by measuring
the total linear footage of shelving on which
dry groceries are stocked for sale to consumers.
For example, if a gondola is 60 feet in length
and has 4 levels of shelving on each side, the
total measured area would equal 480 linear feet
(60 feet x 4 shelves x 2 sides = 480 linear
feet). The total linear footage of display
sales area normally utilized for dry groceries
was included. The total measurement represents
the total dry grocery sales area.

60

4b. NOn-food--includes all shelving devoted to
general merchandise as well as permanent non-
food display racks. For instance, if the
magazine rack is 10 feet wide and has 2 selling
levels, the total sales area Of the rack would
be 20 linear feet.

4c. Frozen food--the total linear footage of freezer
space was measured. Only the front edge of the
cabinets were measured as the ends of the cabinet
were blocked by displays and merchandise could be
purchased by the consumer only from the front of
the cabinets.

4d. Meat-~all meat cases and permanent meat display
cases were measured. The same measurement
criteria, physical ability to purchase area, was
utilized in obtaining the measurement.

4e. Produce--produce displays and permanent display
islands were measured in the same manner and by
applying the same criteria as was used for meat
and frozen food.

4f. Dairy--the dairy department measurement was ob-
tained by first measuring the overall length.
Second, the number of sales levels (shelves) was
counted. Third, the total length was multiplied
by the number of sales levels to determine total
linear feet of sales area.

4g. Total linear feet-~the sum total of the above
measurements.

.A total measurement, by category, of all linear sales
space fOr'the entire store was obtained. Total space was
measured as it is felt that the cost of operations must be
allocated to total space. If operating costs were allocated
to partial rather than total space utilized, the resultant
figure would be inflated.

The final data to be recorded on the Operational data
sheet is the total cost per linear foot of selling area per
week (5). This figure is obtained by dividing the total
cost (31) by the total linear feet of selling area (4g) and 1

61

then dividing the remainder by 52 (number of weeks per year).

The operational data sheet will be compiled, by the
research workers, for each store prior to the beginning of
the experiment. This form will be submitted to the person

in charge of the experiment immediately upon compilation in

order to prevent misplacement.

The in-store data sheet.--The in-store data sheet
(Table 14) will be used by the research workers for the
purpose of recording the space occupied and the sales of
each test item on a weekly basis. The form will be sub-

mitted to the person in charge of the experiment at the end

of each week.
Items (1), (2), and (3) should be self-explanatory and

will be used for identification of the data submitted.

Item (4) provides for the recording of the linear feet
of space occupied by each Of the test items. The linear
footage of selling area will be obtained by measuring the

front.edge of the shelving from the left extremity to the

right extremity of the test item. Measurement shall be

made for each test item. The measurement may .be recorded

111 inches if it is deemed to be more representative than a

measure of fractions of feet.

Item (5) allows for the recording of the weekly sales
of each test item. The procedure for obtaining the neces-

sary counts was set forth in the description of the methods

of conducting the experiment.

62

T bu o s as --sa e and f s.--The tabulation
sheet (Table 15) is to be used only by the person in charge
of the experhment. It will be used for tabulating, weekly,
the data compiled on the in-store data sheet.

Items (1) through (5) are to be transcribed directly
from the in-store data sheets and should be self-explanatory.

The calculation of the gross profit per unit for each
of the test products is presented in items (6) and (7) of
the form. The gross profit per unit is obtained by sub-
tracting the cost per unit from the sales price per unit.

Item (8), the unit sales per week utilizes data from
the in-store data form. Caution again must be exercised to
transcribe the data for the correct store and phase of the
experiment.

The total gross profit per week is calculated for
each of the test products in item (9) of the form. Gross
profit per week is obtained by multiplying the unit sales
per week by the profit per unit for each item. 1

Item (10), the total net profit per week, is calcu-
lated by subtracting the cost per week of the linear feet
«of space allocated to the product from the total gross pro-
:fit per week realized from the sales of the product. The
cost.per week of the linear feet of space allocated may be
determined by multiplying the total cost per linear foot of
selling area per week (Item 5 of the Operational data sheet)

try the linear feet of selling area per product (Item 4 of

the tabulation sheet).

63

Qodiag.--The letter coding of test products will re-
nmin constant thrOughout all phases of the experiment.
Each research worker will be supplied with a list of the
codes prior to the start of the experiment. Coding is being

utilized in order not to offend any packer or manufacturer

during the analysis of the study.

F

TABLE 13
OPERATIONAL DATA SHEET

Store Name Kroger

Address War

Total Operating costs per year

a) Total real estate costs ........... 32,509
b; Total depreciation costs .......... ___ 2,100
c

d)

 

 

Indirect labor costs

(management salaries) ............. 20,800

Direct labor costs 00.00.000.000... I .200
e) Advertising and promotion

COStB OOOOOOOOOOOOCOOOOOOO...0.0... 1 0
f) Stamps eoeeeeeoeeeeoeeeeeeoeeeeeeee
6) Utilities eeeeeeeeeeeeeeeeeeeeeeeeo
h) Other costs (supervisory

expenses and allocation of

office and warehouse expenses) .... 40 0
1) Tatal Coats eeeooeeeoeee-oeeoeooeoe

A

Linear feet Of selling area

g 1,10
a Grocery OOOOOOOOOOIOOOOOOO0.00.0... 2.0g:

Non-fOOd 0.0.000...OOOOOOOOOOOCOOOO
_}_§
12—

.L

b
c Frozen food .......................
d Meat OOOOOOOOOOOOOOOOOOOOOOOO00000.
e
f

 

 

A

 

PrOduce O O O O O O O O O O O O O O O O O O O O O O O O O O O
) Dairy 0 O O O O O O O O O O O O O O O O O O O O O O O O O O 0 O
6) Total linear feet 0 O O O O O O O O O O O O O O O 0 .7 o

4

Total cost per linear foot of selling area per week

(45 + 31) o 52 = ._1_.__.5__002 .

65

TABLE 14

IN-STORE DATA SHEET

1. Store Name gpogar

2. Address Egandor Shopping Ceptar
3. Phase 1

 

 

 

4. Linear feet of selling area per product
a. Tomato soup

1 Brand A ........................ 44 inches
2 Brand BOOOOOOOOOOOOOOOOOOOOOOOO 22 ;n0he§
3 Private label .................. 22 incpaa

b. Ve etable soup
1 Brand A ........................ 22 inche

L

 

 

2 Brand B ........................_;J_;pohes
3 Private label .................._JJ inchea

0. Pork & beans
1) BrandAOOOOOOOOOOOOIOOOOOOOOOOO 2i 1nCheB
2g BrmdBOOOOOOOOOOOOOOOOOOOOOOOO t inChea
3 Private label .................. 55 iich§§

5. Sales of each test item (beginning inventory + units
received - ending inventory)

a. Tomato soup

1) Brand A - 42
2; Brand B
3 Private label

1 Brand A

2 Brand B

3) Private label
c. Pork & beans

b. Vegetable soup

011 a

 

 

a 1171? 111:
1211 14.41% 111

1 Brand A + - 436 =
22 Brand B + 0 - 3 =
3 Private label + O - 331 =

 

 

50

66

TABLE 15

TABULATION SHEET - SALES AND PROFITS
Store _____Ig,roger_r
Address Fra or Sho n Center,
Phase No. 1

Linear feet of space-~soup
a. Tomato

1 BrandA OOOOOOOOOOOOOOO. 441;!cheg
2 Brand B ................ 22 inches

3) Private label .......... 22 inchas
b. Ve stable

1 BrandAOOOOIOOOOOOOOOOO ginghefi
2; BrmdB OOOOOOOOCOOOOCOO11;nCheB

3 Private label .......... 11 nch 8
Linear feet of space--pork & beans (1 lb. can only)
3. BrwdAOOOOCOOOOOOOOOOOOO... 2i 1n0he§
b. BrandB OOOOOOOOOOCOOOCOCOOOO inczzes

0. Private label ...............b inches

 

 

 

Profit per unit-~soups (selling price - cost)
a. Tomato soup
1) Brand A ,1161- .0115
2) Brand B 11 -_‘_§5__, “Qlé5“
3) Private label ,1000 - 33 .01 I
b. Ve stable soup
1 Brand A ,1450 - ,1212 .0231
2) Brand B 1 22 .022
3) Private label ,1000 - .0533 = ,01 Z
IErofit per unit-~pork & beans (selling price - cost)
an Brand A .1430 - 1181 = ,0263
c. Private label ,123 - .1000 = ,0g50

 

 

67

TABLE 15 (continued)

8. Unit sales per week
a. Tomato soup

1; BrandA000000000000000. 542
2

BrandB 0..0.0.00....00. 1

3) Private label .......... 35
b. Ve etable soup

1 BrandA 0000......000000 12a

2) Brand B 0000000000000... 1
3) Private label .......... 61
c. Pork & beans
1) Brand A oooeoeeeeeeeeeeo __J§%______'
2) Bran-dB .000000000000000

3) Private label 0000000000 11?

 

9. Total profit per item per week
(unit sales x profit per unit)
a. Tomato soup

.g; gran: g 542 x .8115 = 6.2330
ran a x . 5 = .5 3
3) Private label x .01 I = 1.302
b. Ve stable soup
1 Brand A ___1_2'_7__x .0221 = .5 E
2) Brand B 1z 1: .025 = .411 :E
3) Private label I x .01 Z = 1.11 2

c. Pork & beans

 

1) Brand A 186 x .0263 = #.8218
2) Brand B E x .0325 = .1399
3) Private label 111 x .9250 = 2.2259

H3. Total net profit per week (total profit per item -
cost of linear feet or space allocated per item)
a. Tomato soup

 

 

1 Brand A 6.233 - 3.6g40 = _2.5520
2) Brand B .5 E - 1 = (1.2505)
3) Private label 1.392 - 1. 310 = A .53 2
b. Ve etable soup 4 40 8 0
1 Brand A - 1 = O
1 3...... 42%,}. ~32: .
3 Private label 1.1] 2 - .21 5 = 2
0. Pork & beans 4 8 0 8
1 Brand A 3 2‘ - 1 = o
2; Brand B .1309 - 1.1 20 = 1 0 0)
3 Private label 2.225 - 2.5059 = . 200

68

TABLE 16

IN-STORE DATA SHEET

1. Store Name Krogep

2. Address Frandor 85022135 Center
3. Phase 2

 

 

 

4. Linear feet of selling area per product
a. Tomato soup
1 Brand A 000000000000.000000

.21.ln££2§_
2 Brand B ................... 21 inchgg

3) Private label ............. 21 inche;
b. Ve etable soup

:1

2)

Brand A 0.000.000.0000...00 1 Che
Brand B ................... _12 inches
3) Private label ............. _16 igches

c. Pork & beans
1 Brand A ................... 26 inche
2 Brand B ................... 26 incheg
3 Private label 000000000000. 2 1n0h§§

5. Sales of each test item (beginning inventory + units
received - ending inventory)

 

a. Tomato soup

2) Brand B + - =
3) Private label + - =

b. Ve etable soup

 

+4. 33-13;. "Is. .2.
1 Brand A 116 + 122 - 15% = 200
2 Brand B $5 + - 11 = 2
3 Private label 1 + fig - 3 = 53
c. Parka: beans 6 1
1 Brand A 132 + - 135_ = 90
2 Brand B 1 2 + EE - 1|__ = 1
3 Private label 3 1 + 0 - 3 2 = 55

 

59

TABLE 17

TABULATION SHEET - SALES AND PROFITS

Store Kroggp
Address Ezggdeg Shgppgng Cenger
Phase No. 2

Linear feet of space-~soup
a. Tomato

 

 

1 BrandA 00.00.000.00... gi inches
2 Brand B ............... n as
3 Private label ......... c e

b. Ve stable

1? BrandA00000000000000. 61 Che

2 Brand B eeeeeeoeeeoeeee 1 1 Che

3 Private label ......... lg ;nchg§
Linear feet of space-~pork & beans (1 lb. can
a. BrandA 000.00.00.000000000. 6 1n he
b0 Brand B 00.00.00000.0...0000 2 Ch
c. Private label .............. 2% inchgg

Profit per unit-~soups (selling price - cost)
a. Tomato soup

1) Brand A .1161 . 0 2 =

2) Brand B 10 =

3) Private label 1000 =
b. Ve etable soup

1? Brand A _.JA 0 .1212 =

2 Brand B _._1 §§og =

3) Private label _.Jw . 0833 =

 

only )

.0115

.0115

02
.31.]...

Profit per unit-~pork a beans (selling price - cost)

a. Brand A 4 0 .1181

1 5
be Brand B 1 " A...) 1
c. Private label 1 - _1159g

 

02

4%.

70

TABLE 17 (continued)

8. Unit sales per week
a. Tomato soup
1) Brand A eeeeooeoooeeo
2) Brand B eeeeeooeeoeee
3) Private label .......
b. Ve etable soup
1 Brmd A........0....
2 Brand B 0.0.0.0....0.
3 Private label .......
c. Pork & beans
1) Brand A 0000000000000
2 Brand B 0.000....000.
3 Private label .......

41%? H45

 

kH—é

9. Total profit per item per week
(unit sales 1 profit per unit)
a. Tomato soup

1) Brand A x .0115

2) Brand B x .0115

3 Private label 55 x .01 I
b. Ve etable soup

1 Brand A 200 x 0 1

2; Brand B 2% x 0223

3 Private label x :0152
0. Pork & beans

1 BrandA 100 x .0263 2.3?2
2) Brand B 13 x 0 . 22

3) Private label 55 x .0250 1.1250

10. Total net profit per week (total profit per item -
cost of linear feet of space allocated per item)
a. Tomato soup

6.5225

0
:E1EE
4.6 00
.$§§O
1.1 2

 

 

 

 

 

 

 

 

 

1 Brand A. _§.52g5 - 2.2545 = _4.E662

2) Brand B .152 - 2.2% g = 11. 955)

3 Private label __.2_1_5 - 2 2 = 11.142591
b. Ve etable soup

1? Brand A 4.620 - 1 60 =.- __ 2840

2 Brand B __‘5ZQQ_- _3333§o = _J .afi)

3) Private label 1.1022 - 1.3'1_(_)_ = _j E)
0. Pork & beans 6

1 Brand A 2. 300 - 2.1110 = .4590

2; Brand B 00 - 2 1 = (1.52!0¢

3 Private label 1.1255 - 2.1510 = 1.0 1

 

 

 

5.

Store
Addre

Phase

71

TABLE 18

IN-STORE DATA SHEET

Name Kroger

 

 

_53

Ergndo; Shoggigg Cegger

Linear feet of selling area per product

3.

b.

0.

Tomato soup

 

 

 

 

1) Brand A ............... 66 inches
2; BrandB............... __1_‘ inches
3 Private label ......... _JJ incheg
Ve etable soup

1 Brand A ............... 2% inches
2) Brand B ............... inches
3) Private label ......... 11 incges
Pork & beans

1) Brand A ............... 43 inches
2) Brand B ............... 11 incheg
3) Private label ......... 24 igches

Sales of each test item (beginning inventory + units

a.

0.

Tomato soup

1 ) Brand A

2 Brand B

3) Private label
Ve etable soup

1 Brand A

2 Brand B

3 Private label
Pork & beans

1) Brand A

2) Brand B

3) Private label

6 4

$1”

 

BIB

 

O

 

”as:

 

received - ending inventory)

 

 

 

+ 489 - 225 = [32
+ O - 25 = 52
+ -TZZ- - 102 = 192
26 - 26 = 248
I O - 22 = 13
+ 122 - 112 = 22
26 - 8 = 5;
: O - 10% = 11
+—EB'--—1'T5=—-B-z

 

5.

72

TABLE 19

TABULATION SHEET - SALES AND PROFITS

Store groger

Address anndgr Shopping ngtgg
Phase No. 3

 

 

Linear feet or space--soup
a. Tomato

1) Brand A ............. _§§ inches
2) Brand B ............. _1j inches
3) Private label ....... inches

b. Ve stable
1 Brand A ............. 2 inches
2) Brand B ............. inches

3) Private label ....... 11 inches

 

 

£

 

T

 

 

Linear feet of space-~pork & beans (1 lb. can only)

a. Brand A .................. 42 inches
b. Brand B .................. 11 inches
c. Private label 0.. 0.0.00... 5; 1!;91’188

Profit per unit-~soups (selling price - cost)
a. Tomato soup
1) Brand A 116 - O 2

.1 5 =
2 Brand B 11 Z - 10 2 = .01
3 Private label jooo - TBS—"o :1 = 70—3‘5'1 1
b. Ve etable soup

 

1 Brand A 14 O - 31212 = .0 1
2) Brand B ,1 50 - 1 2 = ,02é3
3) Private label ,1900 - .0533 = .01 1

Profit per unit--pon:& beans (selling price - cost)

a. Brand A 14 0 - .1181 = .0263
b. Brand B ,1 50 - I1125 = :0225
0. Private label 1 - I1000 = .0250

73

TABLE 19 (continued)

8. Unit sales per week
a. Tomato soup
1) BrandA.............. _Z32_
2) BrandBOOOOOOOOOOCOOOi
3) Private label 0000000. 192
b. Ve etable soup
1 BrandA.............. 248
2 BrmdBOOOOOOOOOOOOOC ‘6
3 Private label ........ 12
0. Pork & beans 6
1 BrandAOOOOOOOOOOOOOO 1
2; Brand B .............. 1g
3 Private label eoeecoeo i8

9. Total profit per item per week
(unit sales x profit per unit)
a. Tomato soup
1 Brand A 33% x _5,
2 Brand B x .5135
3) Private label 102 x __21
b. Ve etable soup

 

%

 

0
1 Brand A 248 x .023; n 2 8
2; Brand B 1 022 =
3 Private label 12 x .0161 = 1.3123
cu Pork & beans
1) Brand A 163x 1 .0263 = 4.2862
2) Brand B .0525 = .5220
3) Private label 18 x . 0250 = 1.2502

u). Total net profit per week (total profit per item -
cost of linear feet of space allocated per item)
a. Tomato soup

 

1 Brand A 8.4255-10 = 8
2 Brand B 1. 555- ___2_1:_§5 = 0)
3 Private label 1.203 M2 = .291

 

b. Ve etable soup 88 4
1 Brand A 5.32 - 1.25 5
2? Brand B - 0
3) Private label 1.3123- 5.21

c. Pork & beans 4 86
1 Brand A 2 23- .
2 Brand B

3) Private label 1 _ggg;___

4 4 4
(:2052)
0

Fr}

a

 

APPENDIX B

THE CONSUMER SURVEY

APPENDIX B

gge Consumer Survey

Selection of Population

The housewives who live in Spartan Village, a housing
development for married students attending Michigan State
university, were selected as the population from which to
draw the sample.

The primary reason for selecting this finite popu-
lation was the relative ease with which it could be listed.

There are 1308 apartments in the develOpment, of which 1275

are occupied. Apartments are grouped into building units.

Each unit is numbered and contains either 8 or 12 apart-

nments. Apartments within each unit are further identified

by letter.
A brain-storming session conducted with members (most
<1: whom reside in Spartan Village) of the graduate seminar

1:1 food distribution at Michigan State University brought

forth the following probable population hypotheses:

1. Age of housewives much younger than national
average for United States. Most housewives

probably under 30 years of age.

2. Family income is limited because husband, wife,
or both are attending college.

3. Geographic origin of residents is highly diverse.

75

76
4. Predominantly higher level of education than
national average for the United States.
5. Large proportion of young children in families.

6. Very susceptible to promotional gimmicks, such
as trading stamps.

7. Limited refrigerated storage space.

8. Generally quite insecure.

9. Buy more convenience foods than average.

10. Housewives are relatively inexperienced as cooks.

11. very materialistically motivated.
Many more characteristics were mentioned; however, the above
list reflects those which were most dominant and unique.

The results of the sample will be representative of
only this population and its unique characteristics. The
representativeness of the results of the sample should be

‘viewed as a limitation which has been recognized.

Sample Size
Prior to determining the size of the sample to be

drawn, it was necessary to review the objectives of the
sample. The objective of this sample was to determine what
prwaportion of Spartan Village housewives would, on the
basis of appearance and taste, select the product that they
claim they normally purchase.

For example, if ten housewives state that they usually
purchase brand 1:, what percentage of these housewives will
state a preference for brand 1 over brand y and brand z, on

the basis of taste and appearance. In essence, the results

should indicate whether a correlation exists between

77

consumer preference for a particular brand and the brand

that is purchased.
The statistical precision of the sample shall fall

within the following parameters.
1. The maximum allowable error will be 10 per cent.

2. A certainty of 95 per cent that the sampling
error will not exceed the 10 per cent limit.

In simple terms, this means that the prOportion of the
housewives sampled who indicate a preference for the pro-
duct which they say they purchase will be within 10 per
cent of the prOportion that would be determined if a census
were taken of the population. The error would not exceed
10 per cent in 95 out of every 100 samples drawn. There-
fore, it can be said that the randomly selected sample will
be of such size that the proportion derived can be viewed
with 95 per cent certainty of being within 10 per cent of
the preportion which would be representative of the entire
pOpulation.

Because the proportion is now unknown, it will be
:necessary to select a.maximum sized sample.1 Determination
of sample size is shown below.

maximum error = 10 per cent
confidence coefficient = 2 (rounded)

size of sample = n

1When the desired proportion is unknown, the pro-
portion is assumed to be 50 per cent. This prOportion will
always achieve a maximum size sample.

78

prOportion who can select (p) = .5
proportion who cannot select (q) = .5

.0025n = .25
n: 100
Therefore, a randomly selected sample of 100 Spartan Village

housewives will satisfy the established parameters.

Sampligg Tgchnigue
Random selection.--The selection process entails two

basic steps. First, an itemized list of all apartments in

Spartan Village was prepared. This list is included at the

end of'the appendix. Each apartment was assigned a code
Innnber. The numbers run from 1 to 1308. The sample units
1w111.be selected through the utilization of a table of ran-
dom numbers. A total sample of 175 will be selected in
oqwier to allow for vacant apartments and no answer occur-

rences. The first 100 respondents selected will comprise

the sample.
Once the units have been randomly selected, the names

sand telephone numbers of the residents will be obtained

from the Housing Office of Michigan State University.

Initigl contact.--The initial contact with the house-

wives selected will be by telephone. The nature and purpose

79

cfthe survey will be explained and a commitment to partici-

pate will be solicited.

The initial contact should be made by a woman in order

maailay any suspicion or hesitancy that might arise if the

initial contact was made by a man. Inducement to partici-

pate will be in the form of a door prize and gifts for each

participant. The inducement will be utilized to gain the

acceptance of the housewives contacted.

S in r cedu e.--The sampling sessions will be

held in Spartan Village Recreation Hall, a centrally located

facility. Two sessions will be held on a Sunday afternoon

at 2:30 p.m. and 3:30 p.m. Fifty participants will attend

each session. Sunday afternoon was selected as it is felt

that most husbands would be available to care for the
Thus, the need for a baby-sitter would not be a
The time scheduled is expected

ch ildren.
deterrent to participation.
to fall mid-way between meals so that taste buds would not

be influenced by a.Just-completed meal.

The sampling sessions will be conducted by five female
home economics students from Michigan State University.
Because of the company affiliation which might bias the

responses of the participants, the author will not conduct

the sampling sessions. The products sampled will be the

same products which were utilized for the in-store experi-

ments.
Once the participants have been assembled, the follow-

ing procedure will be followed.

80

1. A few brief introductory remarks by the leader of

the sampling session.

a.

b.

9.

Thank participants for attending.

Explain that all products are coded and that
the codes may be, but will not necessarily
be switched during the session.

Explain the questionnaire and how it should
be filled in. Fill in basic data.

Explain that door prizes and gifts will be
distributed at the end of the session.
Caution each participant to Judge the pro-
ducts as an individual and to please refrain
from making comments aloud which might sway

the Judgment of another participant.

2. The physical sampling for all product categories

(tomato soup, vegetable soup, and pork & beans)

will be carried out as follows:

a.

Two containers of each of the three products
in each category will be prepared. Care
should be taken to assure that each product
is diluted and heated equally in order to
avoid differences due to preparation. All
containers should be identical in order to
avoid any possible psychological effect due
to size, color, etc.

Participants will view one container of each

of the three products in one category (e.g.,

81

tomato soup) and complete that portion of
the questionnaire which seeks preference by
color and overall appearance.

c. Next, each participant will be given a two-
ounce sample of each brand of the product,
e.g., tomato soup. After sampling the three
brands, the participant will rank them accord-
ing to preference. The two-ounce samples
will be taken from the second set of con-
tainers. The code letters on the second set
of containers will not represent the same
product as on the first set of containers.
The participants, being aware that this might
be done, should not be biased by their
answers to the first question.

The participants will now be supplied with a small
glass of water to wash away the flavor of the previously
sampled product. The participants will then be asked to
answer the questions regarding their purchases. The sheet
<3f the questionnaire will now be collected.

A concentrated effort to control collaboration between
participants during the sampling session and the immediate
collection of each page of the questionnaire should force
each participant to arrive at an individual evaluation.

The above procedure will be repeated for each of the
;p1w3duct categories: tomato soup, vegetable soup, and pork a

beans. At the completion of the sessions and after all

82

questionnaires have been collected, the gifts which were
promised as inducement will be distributed to the partici-

pants.

Qgestionnaire

The questionnaire is designed so as to be as brief as
possible. The brevity is designed to avoid the irritation
factor which might affect a participant's answers. Questions
are arranged so that each page may be collected upon com-
pletion of that portion of the sampling session. Each
questionnaire will bear a different code number. The
number of a given questionnaire will appear on each page of
the questionnaire in order that they may be reassembled for
tabulation. A copy of the questionnaire is included at the
end of the appendix.

The questions on the first page of the questionnaire
are designed primarily to put the respondent at ease by
providing questions which are easy to answer. It is not
expected that there will be any reluctance to answer question
5 (approximate income) because of the anonymity of the
questionnaire. In addition, the questions on the first
page of the questionnaire will provide information about the
size, age, geographic origin, and income of the families
:represented. A cross tabulation will be made to see if any
:factors are significantly correlated with the balance of the
data.

The questionnaire on the remaining pages which relate

'to product preference are to be answered by ranking the

83

products in order of preference. The questions are divided

as follows:

1.

2.

3.

Color--a ranking on the basis of color was re-
quested as it is felt that the color of a product
imparts a first impression to the observer.
Ingredients and consistency-othe participants
will be given the opportunity stir the products
and to examine the product ingredients. The
apparent quality of ingredients is another prime
factor in Judging a product.

Over-all appearance--after making a Judgment on
the basis of color and of consistency and
ingredients, the participant is given the oppor-
tunity to Judge the product on the basis of its
total appearance. The selection in this category
may be completely different than either of the
prior categories. For example, a product may
have what is considered to be the best color and
ingredients, but, because of the visible fat
content, may rank last in over-all appearance.
Taste or flavor--the samples of the products to
be tested will be taken from different containers
in order to negate the possibility of the flavor
ranking being influenced by the visual evalu-
ations. This question is designed to determine

the taste preference of the individual participant.

84

It should be noted that in each of the above questions,
an alternative is offered for those persons who axe unable
to make a Judgment. The negative wording of this alter-
native is purposely designed to encourage a ranking type
answer. It is felt that most participants will be reticent
to admit that they are unable to distinguish between the
products.

Question (5a) is structured in order to determine if
the participant purchases any brand of the product in
question. Question (5b) is also structured to learn which
brand, if any, is usually purchased. Question (5c) is an
Open-ended question and is not intended to guide the
participant. If price is a factor in purchasing the test
products, it is hoped that it will be brought out by this
question.

In total, the questionnaire is limited by the experi-
ence and conceptual skills of the author. The questionnaire
should provide the necessary data to determine whether a
correlation exists between the preference rankings and the

‘brands that participants indicate are purchased.

85

TABLE 20

POPULATION LIST--SPARTAN VILLAGE: A HOUSING
DEVELOPMENT FOR MARRIED STUDENTS ATTENDING
MICHIGAN STATE UNIVERSITY,

EAST LANSING, MICHIGAN

 

__j—

 

 

 

 

Code Code Code

Bldg. Unit No. Bldg. Unit No. Bldg. Unit No.
1401 A 1 L 44 K 87
B 2 1405 A 45 L 88

C 3 B 46 1409 A 89

D 4 C 47 B 90

E 5 D 48 C 91

F 6 E 49 D 92

G 7 F 50 G 93

H 8 G 51 H 94

I 9 H 52 I 95

J 10 I 53 J 96

K 11 J 54 1410 A 97

L 12 K 55 B 98

1402 A 13 . L 56 C 99
B 14 1406 A 57 D 100

C 15 B 58 E 101

D 16 C 59 F 102

E 17 D 60 G 103

F 18 G 61 H 104

G 19 H 62 I 105

H 20 I 63 J 106

I 21 J 64 K 107

J 22 1407 A 65 L 108

K 23 B 66 1411 A 109

L 24 C 67 B 110

1403 A 25 D 68 C 111
B 26 E 69 D 112

C 27 F 70 G 113

D 28 G 71 H 114

G 29 H 72 I 115

H 30 I 73 J 116

I 31 J 74 1412 A 117

J 32 K 75 B 118

1404 A 33 L 76 C 119
B 34 1408 A 77 D 120

c 35 B 78 E 121

D 36 C 79 F 122

E 37 D 80 G 123

F 38 E 81 H 124

G 39 F 82 I 125

H 40 G 83 J 126

I 41 H 84 K 127

J 42 I 85 L 128

K 43 J 86 1413 A 129

86

TABLE 20 (continued)

 

Code Code Code
Bldg. Qnit No. Bld U t No. Bld . U i No
1413 B 130 G 179 L 228
C 131 H 180 1422 A 229
D 132 I 181 B 230
E 133 J 182 C 231
F 134 K 183 D 232
G 135 L 184 E 233
H 136 1418 A 185 F 234
I 137 B 186 G 235
J 138 C 187 H 236
K 139 D 188 I 237
L 140 E 189 J 238
1414 A 141 F 190 K 239
B 142 G 191 L 240
C 143 H 192 1423 A 241
D 144 I 193 B 242
E 145 J 194 C 243
F 146 K 195 D 244
G 147 L 196 E 245
H 148 1419 A 197 F 246
I 149 B 198 G 247
J 150 C 199 H 248
K 151 D 200 I 249
L 152 E 201 J 250
1415 A 153 F 202 K 251
B 154 G 203 L 252
C 155 H 204 1424 A 253
D 156 I 205 B 254
E 157 J 206 C 255
F 158 K 207 D 256
G 159 L 208 E 257
H 160 1420 A 209 F 258
I 161 B 210 G 259
J 162 C 211 H 260
K 163 D 212 I 261
L 164 G 213 J 262
1416 A 165 H 214 K 263
B 166 I 215 L 264
C 167 J 216 1425 A 265
D 168 1421 A 217 B 266
E 169 B 218 C 267
H 170 C 219 D 268
I 171 D 220 E 269
J 172 E 221 F 270
1447 A 173 F 222 G 271
B 174 G 223 H 272
C 175 H 224 I 273
D 176 I 225 J 274
E 177 J 226 K 275
F 178 K 227 L 276

87
TABLE 20 (continued)

 

 

Code Code Code
fildg. Unit N9. Bldg. Ugit N9. Bldg. U911 No.
1426 A 277 F 326 K 375

B 278 G 327 L 376
c 279 H 328 1435 A 377
D 280 I 329 B 378
E 281 J 330 c 379
F 282 K 33 1 D 380
G 283 L 332 E 381
H 284 1431 A 333 F 382
I 285 B 334 G 383
J 286 C 335 :1 384
K 287 D 336 I 385
L 288 G 337 J 386
1427 A 289 H 338 K 387
B 290 I 339 L 388
c 291 J 340 1436 A 389
D 292 1432 A 341 B 390
E 293 B 342 c 391
F 294 c 343 D 392
G 295 D 344 E 393
H 296 E 345 F 394
I 297 F 346 G 395
J 298 G 347 H 396
K 299 H 348 I 397
L 300 I 349 J 398
1428 A 301 J 350 K 399
B 302 K 351 L 400
c 303 L 351 1440 A 401
D 304 1433 A 353 B 402
E 305 B 354 c 403
H 306 c 355 D 404
I 307 D 356 E 405
J 308 E 357 F 406
1 429 A 309 F 358 G 407
B 310 G 359 H 408
c 311 H 360 I 409
D 312 I 361 J 410
E 313 J 362 K 411
F 314 K 363 L 412
G 315 L 364 1441 A 413
H 316 1434 A 365 B 414
I 317 B 366 c 415
J 318 c 367 D 416
K 319 D 368 E 417
L 320 E 369 H 418
1430 A 32 1 F 370 I 419
B 322 G 371 J 420
c 323 H 372 1442 A 421
D 324 I 373 B 422
E 325 J 374 c 423

88

TABLE 20 (continued)

W
Code Code Code

Blgg. Un;t N0. B;gg. Unit N05, B d U 1t N

 

1442 D 424 G 473 B 522
E 425 H 474 c 523

F 426 I 475 D 524

G 427 J 476 E 525

H 428 1447 A 477 F 526

I 429 B 478 G 527

J 430 c 479 H 528

K 431 D 480 I 529

L 432 E 481 J 530

1443 A 433 F 482 K 531
B 434 G 483 L 532

c 435 H 484 1452 A 533

D 436 I 485 B 534

E 437 J 486 c 535

F 438 K 487 D 536

G 439 L 488 G 537

H 440 1448 A 489 H 538

I 441 B 490 I 539

J 442 c 491 J 540

K 443 D 492 1512 A 541

L 444 E 493 B 542

1444 A 445 F 494 c 543
B 446 G 495 D 544

c 447 H 496 E 545

D 448 I 497 F 546

E 449 J 498 G 547

F 450 K 499 H 548

G 451 L 500 I 549

H 452 1449 A 501 J 550

I 453 B 502 K 551

J 454 c 503 L 552

K 455 D 504 1513 A 553

L 456 G 505 B 554

1445 A 457 H 506 c 555
B 458 I 507 D 556

o 459 J 508 E- 557

D 460 1450 A 509 F 558

E 461 B 510 G 559

F 462 C 511 H 560

G 463 D 512 I 561

H 464 E 513 J 562

I 465 F 514 K 563

J 466 G 515 L 564

K 467 H 516 1514 A 565

L 468 I 517 B 566

1£p46 A 469 J 518 c 567
B 470 K 519 D 568

c 471 L 520 E 569

D 472 1451 A 521 F 570

89

TABLE 20 (continued)

 

 

1514 G 571 D 620 G 669
H 572 E 621 H 670
I 573 F 622 I 671
J 574 G 623 J 672
K 575 H 624 1526 A 673
L 576 I 625 B 674
1515 A 577 J 626 c 675
B 578 K 627 D 676
c 579 L 628 E 677
D 580 1520 A 629 F 678
G 581 B 630 G 679
H 582 c 631 H 680
I 583 D 632 I 681
J 584 E 633 J 682
1516 A 585 F 634 K 683
B 586 G 635 L 684
c 587 H 636 1527 A 685
D 588 I 637 B 686
E 589 J 638 C 687
F 590 K 639 D 688
G 591 L 640 E 689
H 592 1523 A 641 F 690
I 593 B 642 G 691
J 594 C 643 H 692
K 595 D 644 I 693
L 596 E 645 J 694
1517 A 597 F 646 K 695
B 598 G 647 L 696
c 599 H 648 1528 A 697
D 600 I 649 B 698
E 601 J 650 c 699
F 602 K 651 D 700
G 603 L 652 G 701
H 604 1524 A 653 H 702
I 605 B 654 I 703
J 606 C 655 J 704
K 607 D 656 1529 A 705
L 608 E 657 B 706
1518 A 609 F 658 c 707
B 610 G 659 D 708
C 611 H 660 E 709
D 612 I 661 F 710
G 613 J 662 G 711
H 614 K 663 H 712
I 615 L 664 I 713
J 616 1525 A 665 J 714
1519 A 617 B 666 K 715
B 618 c 667 L 716
C 619 D 668 1530 A 717

90

TABLE 20 (continued)

 

Code Code Code

Bldg. Unit No. Bldg. Unit No. Bldg. Ug;t N9.
1530 B 718 F 766 J 814
C 719 G 767 K 815

D 720 H 768 L 816

E 721 I 769 1539 A 817

F 722 J 770 B 818

G 723 K 771 c 819

H 724 L 772 D 820

I 725 1535 A 773 E 821

J , 726 B 774 F 822

K 727 C 775 G 823

L 728 D 776 H 824

1531 A 729 E 777 I 825
B 730 F 778 J 826

C 731 G 779 K 827

D 732 H 780 L 828

G 733 I 781 1540 A 829

H 734 J 782 B 830

I 735 K 783 C 831

J 736 L 784 D 832

1532 A 737 1536 A 785 E 833
B 738 B 786 F 834

C 739 C 787 G 835

D 740 D 788 H 836

E 741 E 789 I 837

F 742 F 790 J 838

G 743 G 791 K 839

H 744 H 792 L 840

I 745 I 793 1541 A 841

J 746 J 794 B 842

K 747 K 795 C 843

L 748 L 796 D 844

1533 A 749 1537 A 797 E 845
B 750 B 798 F 846

C 751 C 799 G 847

D 752 D 800 H 848

E 753 G 801 I 849

F 754 H 802 J 850

G 755 I 803 K 851

H 756 J 804 L 852

I 757 1538 A 805 1542 A 853

J 758 B 806 B 854

K 759 C 807 C 855

L 760 D 808 D 856

1534 A 761 E 809 G 857
B 762 F 810 H 858

C 763 G 811 I 859

D 764 H 812 J 860

E 765 I 813 1543 A 861

91
TABLE 20 (continued)

 

 

 

Code Code Code

Bldg. Unit No. Bldg, Unit No. Bldg. Unit No,
1543 B 862 F 910 J 958
C 863 G 911 K 959

D 864 H 912 L 960

E 865 I 913 1565 A 961

F 866 J 914 B 962

G 867 K 915 C 963

H 868 L 916 L 964

I 869 1548 A 917 E 965

J 870 B 918 F 966

K 871 C 919 G 967

L 872 D 920 H 968

1544 A 873 E 921 I 969
B 874 F 922 J 970

C 875 G 923 F1 971

D 876 H 924 L 972

E 877 I 925 1566 A 973

F 878 J 926 B 974

G 879 K 927 C 975

H 880 L 928 D 976

I 881 1549 A 929 E 977

J 882 B 930 F 978

K 883 C 931 G 979

L 884 D 932 H 980

1545 A 885 E 933 I 981
B 886 F 934 J 982

c 887 G 935 K 983

D 888 H 936 L 984

G 889 I 937 1567 A 985

H 890 J 938 B 986

I 891 K 939 C 987

J 892 L 940 D 988

1546 A 893 1550 A 941 G 989
B 894 B 942 H 990

C 895 C 943 I 991

D 896 D 944 J 992

E 897 G 945 1568 A 993

F 898 H 946 B 994

G 899 I 947 C 995

H 900 J 948 D 996

I 901 1551 A 949 E 997

J 902 B 950 F 998

K 903 C 951 G 999

L 904 D 952 H 1000

1547 A 905 E 953 I 1001
B 906 F 954 J 1002

C 907 G 955 K 1003

D 908 H 956 L 1004

E 909 I 957 1559 A 1005

92

TABLE 20 (continued)

   
   

 
  

_ _. ’0 _— ._. fi..-~ _.__ -____-._-_ _» , —-. _ -

 

 

Code Code Code

Bldg, Unit No, Bldg. Unit No. Bldg. Unit No,
1569 B 1006 F 1054 J 1102
C 1007 G 1055 K 1103

D 1008 H 1056 L 1104

E 1009 I 1057 1615 A 1105

F 1010 J 1058 B 1106

G 1011 K 1059 C 1107

H 1012 L 1060 D 1108

I 1013 1574 A 1061 G 1109

J 1014 B 1062 H 1110

K 1015 C 1063 I 1111

L 1016 D 1064 J 1112

1570 A 1017 E 1065 1616 A 1113
B 1018 F 1066 B 1114

C 1019 G 1067 C 1115

D 1020 H 1068 D 1116

G 1021 I 1069 E 1117

H 1022 J 1070 F 1118

I 1023 K 1071 G 1119

J 1024 L 1072 H 1120

1571 A 1025 1612 A 1073 I 1121
B 1026 B 1074 J 1122

C 1027 C 1075 K 1123

D 1028 D 1076 L 1124

E 1029 G 1077 1617 A 1125

F 1030 H 1078 B 1126

G 1031 I 1079 C 1127

H 1032 J 1080 D 1128

I 1033 1613 A 1081 E 1129

J 1034 B 1082 F 1130

K 1035 C 1083 G 1131

L 1036 D 1084 H 1132

1572 A 1037 E 1085 I 1133
B 1038 F 1086 J 1134

C 1039 G 1087 K 1135

D 1040 H 1088 L 1136

E 1041 I 1089 1618 A 1137

F 1042 J 1090 B 1138

G 1043 K 1091 C 1139

H 1044 L 1092 D 1140

I 1045 1614 A 1093 E 1141

J 1046 B 1094 F 1142

K 1047 C 1095 G 1143

L 1048 D 1096 H 1144

1573 A 1049 E 1097 I 1 145
B 1050 F 1098 J 1146

C 1051 G 1099 K 1147

D 1052 H 1100 L 1148

E 1053 I 1101 1619 A 1149

Bldg, Unit

1619

1620

1621

1622

1623

HUGH)PFWQHZEQ’IJHUwapt‘WQHmQWNUOW{Pt-IHCGQUOCDIDFNQHEQWHUOI‘D

Code
No.

1150
1151
1152
1153
1154
1155
1156
1157
1158
1159
1160
1161
1162
1163
1164
1165
1166
1167
1168
1169
1170
1171
1172
1173
1174
1175
1176
1177
1178
1179
1180
1181
1182
1183
1184
1185
1186
1187
1188
1189
1190
1191
1192
1193
1194
1195
1196
1197

1624

1625

1626

1627

93

Bldg. Unit

mUOWPt‘WQHmQ'SIFJUQWPFNQHmQfiPJUOwa‘WQHmQ'FJFJ-UOCUD>L"NC4H:TJQ"J

TABLE 20 (continued)

W

Bldg, Unit

Code
No.

1198
1199
1200
1201
1202
1203
1204
1205
1206
1207
1208
1209
1210
1211
1212
1213
1214
1215
1216
1217
1218
1219
1220
1221
1222
1223
1224
1225
1226
1227
1228
1229
1230
1231
1232
1233
1234
1235
1236
1237
1238
1239
1240
1241
1242
1243
1244
1245

1628

1629

1630

1631

QUODUPIT‘PEC-AHZBQWJHUOUJ{Pt—‘NQHIQHJNUOwbt‘Pfi'QHZfl‘c—l’fll‘lbnwPFNQHZ‘Q'Q

Code
N0;

1246
1247
1248
1249
1250
1251
1252
1253
1254
1255
1256
1257
1258

’1259

1260
1261
1262
1263
1264
1265
1266
1267
1268
1269
1270
1271
1272
1273
1274
1275
1276
1277
1278
1279
1280
1281
1282
1283
1284
1285
1286
1287
1288
1289
1290
1291
1292
1293

Code

Blgg. Unit No;

1531

1632

FNQHCCQ’IJHUQCUPQHH:

1294
1295
1296
1297
1298
1299
1300
1301
1302
1303
1304
1305
1306
1307
1308

94

TABLE 20 (continued)

Code
BlQE: Unit NOB.

Code

Bldg. Uni; No.

95

TABLE 21
QUESTIONNAIRE

(Please answer each question as completely and carefully as
possible)

1.

Who is the main purchaser of groceries in your house-
hold?

wife

husband

son or daughter

husband and wife together

How many persons reside in your household?

adults
children (if you have children, please answer
Question 3)

Number of children in each age group

0 - 2 years 10 - 14 years
3 - 5 years 15 years or older
5 - 9 years

 

 

Last residence: city, town, and state (prior to East
Lansing if different than East Lansing)

wife

 

husband _g

Income (approximate)

33,999 or less
349000-359999
$6,000-879499
7,500 or more

96

TABLE 21 (continued)

Please rate each product by number, using

1. Best
2. Second best
3. Least

If possible, please rate each product in each of the
questions.

TOMATO SOUP

1.

2.

Color: which soup has the most appetizing color?

Product X:
Product Y:
Product Z:
Unable to Tell:

 

 

Ingredients and consistency: which soup appears to
have the better ingredients and consistency?

Product X:
Product Y:
Product Z:
Unable to Tell:

 

 

Over-all appearance:

Product X:
Product Y:
Product Z:
Unable to TelI:

 

 

 

Taste or flavor: Which flavor do you prefer: most,
second best, least?

Product X:
Product Y:
Product Z:
Unable to Say:

 

Do you purchase tomato soup?
If yes, what brand do you usually purchase?
Why do you purchase that particular brand?

 

97

TABLE 21 (continued)

VEGETABLE SOUP

1.

3.

Color: which soup has the most appetizing color?

Product x:
Product Y:
Product Z:
Unable to TeII:

 

 

 

Ingredients and consistency: which soup appears to

have the better ingredients and consistency?

Product X:
Product Y:
Product Z:
Unable to Tell:

 

 

Over-all appearance:

Product X:
Product Y:
Product 2:

Unable to Tell:

 

 

 

Taste or flavor: which flavor do you prefer:
second best, least?

Product X:
Product Y:
Product Z:
Unable to Tell:

 

 

 

Do you purchase vegetable soup?

If yes, what brand do you usuglli purchase?
Why do you purchase that particu ar brand?

 

most,

98

TABLE 21 (continued)

PORK & BEANS: Only Pork & Beans in tomato sauce are being

sampled. Please make your comparison among
the products sampled only.

Color: which product appears to have the most appetiz-
ing color?

Product X:
Product Y:
Product Z:
Unable to Tell:

 

 

Ingredients: which product has the better appearing
ingredients?

Product X:
Product Y:
Product Z:
Unable to Tell:

 

Over-all appearance:

Product X:
Product Y:
Product Z:
Unable to TeIl:

Taste or flavor: which taste or flavor do you prefer:
most, second best, least?

Product X:
Product Y:
Product Z:
Unable to Say:

 

 

 

Do you purchase pork & beans? ______
If yes, what brand do you usually purchase?
Why do you purchase that particular brand?

BIBLIOGRAPHY

BIBLIOGRAPHY

ook

Adams, J. Stacy. Interviewing Prggeduges, A.Manual for

Igtervigwers. Chapel Hill: The University of North
Carolina Press, 1958.

Blankenship, Albert B. ngsume; 52d Opinign Research, The

Questigggaire Technique. New York: Harper and
Brothers, 19 3. . .

Cox, D. R. Planning 9f Egperiments. New York: John Wiley
a Sons, Inc., 195 .

Finney, D. J. An Introduction to the gnegny of £5293;-

genta; Degigg. Chicago: The University of Chicago
ess, 19 0.

Hobart, Donald M. (ed.). flazketing Research Pgagtige.
New York: The Ronald Press Company, 1950.

Spurr, William A., Kellogg, Lester 3., and Smith, John H.

Business and Economic Statistics. Homewood, Illinois:
chard . Irw n, Inc., 195 .
Wallis, W. Allen. Statistics, A Ngw épproach. Glencoe,
Illinois: The Free Press, 195 .

Peziogiggls

Applebaum, William, and Spears, Richard F. "Controlled
Experimentation in Marketing Research," Jou a
of Marketin , XIV, No. 4 (January, 1950), pp. 05-

517.
Blankenship, Albert 8., et 21. "Questionnaire Preparation

and Interviewer Technique," A Sub-committee Report
of American Marketing Association Committee on

Marketing Research Techniques, e Jou al f
Marketing, XIV, No. 3 (October,.1949), pp. 399-433.

100

101

Boyajy, Joseph S., et hi. "Tabulation Planning and Tabu-
lation Techniques," A Sub-committee Report of
American Marketing Association Committee on Marketing

Research Techniques, The Jouhhal of Marketing, XIII,
Noe 3 (January! 1949)! P90 330-3550

Cunningham, Rose M. "Customer Loyalty to Store and Brand,"
Ha vard B sin ss Review, XXXIX, No. 6 (November-
December, 1961), pp. 127-137.

Gannon, Donald A. "Private Labels, 000perative Advertising,
Profits," Su er M rket Merchandi in , XXIV, No. 5
(May, 1959), p. 113.

McNamara, Harley V. "The New Face of Distribution,” u e

Market Merchandising, XXV, N0. 8 (August, 1960 , p.
10 .

"Brand Philos0phy, The Von's Way," guys: Mgzkeh Mezchandig-
$25: XXV, No. 7 (July, 1960), p. 5.

"Memo for Merchandisers," Su er rket Merchand s , XXVI,
N0. 11 (November, 1961), p. 79.

"Results of Tests in Five Dillon Super Markets in Kansas,"
ProgEessive Groceh, XXXIX, No. 1 (January, 1960),
pp. " 20

“Should Shelf Items Be Grouped by Brand or Commodity?,"

Su e Marks Me c andisin , XXIV, No. 4 (April,
1959), p. 113.

"Where We Stand Today in Private Brand Merchandising,"

Progressive Grocer, XXXVIII, No. 8 (August, 1959).
p. 1.

Unpublished Matehial

List of Grocery Stores and Percentage of Total Weekly Sales,
(March, 1961). Obtained from the files of the
Lansing State Journal.

Letter

Personal letter from Mr. W. B. Nixon, General Sales Manager,
Campbell Sales Company, January 19, 1962.

 

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