v.2:wa-swmmvss‘rzsm:'._-swzfacéy‘m#21:):z‘:rt; y,:-_._;-;g.»_-:«,;g; ~%:::-.-:v:':-'-'::::: A' " " " " " ”‘ ' A STUDY OF THE BUYER-SELLER RELATIONSHIP, BUYER INFLUENCE. AND NEW PRODUCT SELECTION CRITERIA IN THE ADOPTION OF NEW PRODUCTS BY A SUPERMARKET WITH A BUYER'MERCHANDISER COMIIIITTEE Disisértation for the Degree of Ph. D'. " MICHIGAN STATE UNIVERSITY SHIV KUMAR ARORA; 1975 “ f \\ ‘ / ‘lenuifi u’u‘J—U'fl"? "wh- wfyfl . I O ‘75" x _. V'“ -, <‘ r.” z? I ‘ u‘gIa-L «we: P F. T l ..A _- ..._,,|.. ‘. ._ 1-1:..le vui yLwV‘i Us; rm” 4i ay This is to certify that the thesis entitled A Study of the Buyer-Seller Relationship, Buyer Influence, and New Product Selection Criteria in the Adoption of New Products By A Supermarket with A BuyeruMerchandiser Presented by Committees Shiv Kumar Arora has been accepted towards fulfillment of the requirements for Ph.D. (“,ng in Marketing Q1 O -\\i«wv1a\ I Major professor Date 9/30/75 0-7639 ‘ [vii/Y IN DING BY I «one a an I; m.- DPDFT ulcmbgul ABSTRACT A STUDY OF THE BUYER-SELLER RELATIONSHIP, BUYER INFLUENCE, AND NEW PRODUCT SELECTION CRITERIA IN THE ADOPTION OF NEW PRODUCTS BY A SUPERMARKET WITH A BUYER-MERCHANDISER COMMITTEE By Shiv Kumar Arora Numerous new products developed each year fail, which amounts to a considerable waste of valuable economic resources. Many of these new products are rejected by the marketing channel members. Very little research has been done in the selection of new products at the channel level compared to research at the consumer level. One type of channel member or reseller responsible for high dollar volume and the introduc- tion of a large number of new products is the supermarket chain. Many of the chains are now using buying committees for making new product decisions. The objective of this research is to study the decision-making process for the acceptance or rejection of new products by supermarket chains which use buying committees. In order to achieve this objective several research questions were investigated: What salesman's qualities are the most important to the buyer in evaluating his performance? Does a good salesman's performance result in the recommendation of his product by the buyer to the buying committee? How influential is the buyer in the selection of new products? How efficient is a two-man buying committee? What are the major criteria used in the selection of Shiv Kumar Aurora new products? Do all buyers use the same criteria in the selection of new products? In order to answer these questions several hypotheses were constructed. They then were tested using data collected at a medium- sized supermarket chain in the Midwest which uses a buying committee consisting of a buyer and a merchandiser. Salesman's performance was used as a moderating variable between salesman's qualities and the buyer's recommendation on the new product to the merchandiser. The methodology used in this research involved the collection of data in three phases. In the first phase a convenience sample of 52 salesmen handling new products was selected, and their sales pre- sentations to the buyers were taped. Each salesman's qualities were evaluated by the buyer and the researcher on a Salesman's Evaluation Form developed for this study. In the second phase the interactions between buyer and merchandiser concerning new products involved in phase one were taped. A total of 83 new products were discussed in the buyer-merchandiser meetings attended by the researcher. Both salesman-buyer and buyer-merchandiser tapes were transcribed, and the dialogues were analyzed. From these dialogues a list of decision-making criteria used in the selection of new products was prepared. In the third phase the buyers were asked to rate each criterion on a nine-point differential scale ranging from unimportant to very important. Finally, each criterion was pasted on a separate piece of cardboard, and the buyers were asked to rank them. The Wilcoxon Matched-Pairs Signed-Ranks Test revealed that there was no difference between the ratings of the salesman's overall Shiv Kumar Arora performance by the buyers and the researcher. This check was made to ensure that the buyer rated the salesman on that particular sales presentation and did not take into account any previous contacts with the salesman. Compared to other salesman's qualities, the zero-order corre- lation coefficients between the salesman's planning and preparation, task empathy (a component of empathy), expertness (a component of source credibility), and overall performance were highest and were positive and significant. Second-order partial correlation coefficients revealed a salesman's planning and preparation and task empathy are the two most important determinants of his overall performance as perceived by the buyer. Even though the chi-square test showed independence between the salesman's performance and the buyer's recommendation, the analysis of the dialogues for this sample showed that the chances of the buyer recom- mending the salesman's product are higher if the salesman's performance is above average or better as opposed to average or below (performance as evaluated by the buyer). Furthermore, if the new product handled by the salesman with above average or better performance is not recommended by the buyer, it is due to reasons beyond the control of the salesman. The hypothesis that there is a positive relationship between the buyer's recommendation to the merchandiser and the buying committee's decision to buy the new product was supported by the chi-square test. In four out of five cases the buyer's recommendation was accepted by the merchandiser. Therefore, it was concluded that the buyer is influential in the selection of new products. Shiv Kumar Arora In the "one-to-one" or buyer-merchandiser buying committee under investigation, consisting of a buyer and a merchandiser (at the execu- tive level), a very high percentage of decisions was made (82 percent), a small number of decisions were deferred for legitimate reasons (lO.8 percent), and a very low percentage of decisions was deferred for insufficient reasons (7.2 percent). In that sense this type of buying committee is considered to be efficient. Fourteen criteria for the selection of new products were extracted by analyzing the buyer-merchandiser dialogues. The five most important criteria, in order of importance, used in the selection of new products are: sales potential of the new product; overall potential profit of the product; manufacturer's/supplier's backing; introductory terms and allowances; and potential value to consumer compared to similar products. The other criteria are: uniqueness of the product; manufacturer's coordination of promotion and advertising programs with distribution; service from the supplier; seasonality of the product sale; requests for the product; shelf space requirements; overall packaging; avoidance of duplication; and potential competitive move of manufacturers selling similar products. The hypothesis that there are no significant differences in the importance ratings of the new product decision-making criteria of different buyers was supported by the Friedman Test and Dual Analysis of Variance. Since the above conclusions are drawn on the basis of a small sample size, a large data base is needed to validate these results. A STUDY OF THE BUYER-SELLER RELATIONSHIP, BUYER INFLUENCE, AND NEW PRODUCT SELECTION CRITERIA IN THE ADOPTION OF NEW PRODUCTS BY A SUPERMARKET WITH A BUYER—MERCHANDISER COMMITTEE By Shiv Kumar Arora A DISSERTATION Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Marketing and Transportation Administration l975 © Copyright ii SHIV KUMAR ARORA I975 ACKNOWLEDGMENTS Many individuals have been instrumental in the completion of this research. The author is particularly grateful to Dr. Joseph Thompson, who served as chairman of the research committee, for his constant guidance and encouragement, which were extremely vital to the completion of this research. Likewise, Dr. Gilbert Harrell and Dr. David Ralph, members of the dissertation committee, substantially contributed to this research. Their constructive criticisms were very influential in molding the author's thoughts. The cooperation of Chatham Supermarkets Incorporated was, indeed, fundamental to this project. In particular, the author is grateful to Bernard Weisberg, President, and Will Roberts, Vice- President, Director of Marketing, for making the necessary arrangements for the collection of information. The author is also thankful to the merchandisers and the buyers whose excellent cooperation and enthusiastic participation were inspirational to the author. The research grant from the Philadelphia College of Textiles and Science, which helped defray a part of the total expenses, is gratefully acknowledged. The discussions with many of my colleagues on the faculty of Philadelphia College of Textiles and Science were a great inspiration. In particular, Dr. Robert Milam, Director, School of Business, who offered constant encouragement and help in procuring the research grant, is acknowledged with many thanks. The author also acknowledges with thanks the help of Shirley Miller in typing and preparing the manuscript. *‘k‘k‘k‘k‘k iii TABLE OF CONTENTS LIST OF TABLES .......................... LIST OF FIGURES ......................... Chapter I. INTRODUCTION ....................... Research Objective ................... Rationale ....................... Supermarket Chains ................... New Product Acceptance Rate ............ Buying Committees ................. Membership of Buying Committee .......... Role of Buyer ................... Salesman's Classification and Qualities ...... The Decision Process ................ Scope, Procedure, and Limitations ........... Plan of Study ..................... II. THEORETICAL FRAMEWORK .................. III. SURVEY OF LITERATURE ................... Buyer Behavior Models ................. Information Processing ................. The Filtering Process ............... Phases of Information Processing .......... Attitude ........................ Measurement of Attitude .............. Theories of Cognitive Consistency ......... Implications for the Buyer-Seller Relationship . . . Salesman's Qualities .................. Source Credibility ................. Empathy ...................... Measurement of Empathy ............... Planning and Preparation .............. Small Group Decision Making .............. Functions of Committees .............. Advantages of Committees .............. Disadvantages of Committees ............ iv Page vii Chapter IV. V. VI. VII. Committee Size ................... Committee Leadership ................ Committee Membership ................ RESEARCH QUESTIONS AND THE SCOPE OF RESEARCH ....... Overview ........................ Research Questions ................... Salesman's Qualities and New Product Decisions . . . Decision Making in Buying Committees ........ New Product Decision Criteria ........... The Scope of Research ................. Salesman's Qualities and New Product Decisions . . . Decision Making in Buying Committees ........ New Product Decision Criteria ........... Summary of Research Questions ............. RESEARCH HYPOTHESES I .................. Salesman's Qualities and New Product Decisions ..... Decision Making in Buying Committees .......... New Product Decision Criteria ............. METHODOLOGY ....................... Source of Data ..................... Supermarket Background ............... Organizational Set-Up ............... Research Instruments .................. Salesman's Evaluation Form ............. Salesman's Performance ............... New Products Definition ................ Collection of Data ................... Buyer-Salesman Interactions and Salesman's Evaluation Form ................. Buying Committee Interactions . . ......... Buyer's Rating of Decision-Making Criteria ..... Statistical Tests ................... Statistical Test to Check the Difference Between Buyer's and Researcher's Evaluation of Salesman's Performance .............. Testing Research Hypotheses ............ ANALYSIS OF DATA AND RESULTS ............... Tabulation of Data ................... Decision-Making Criteria ................ Page 50 52 53 56 88 88 90 90 92 Chapter Page Statistical Test to Check the Difference Between Buyer's and Researcher's Evaluations of Salesman's Performance ................ 94 Testing of Research Hypotheses ............. 95 Results ........................ lOO Salesman's Qualities and New Product Decisions . . . lOO Conclusion ..................... lO3 Discussion of Results ............... lO4 Partial Correlation Coefficients .......... lOS Conclusion ..................... lO7 Decision Making in Buying Committees ........ l08 Conclusion ..................... l09 Discussion of Results ............... l09 Rate of New Product Adoption ............ llO Conclusion .................... 112 New Product Decision Criteria ........... 112 Conclusion .................... llZ Discussion of Results ............... 113 Conclusion ..................... ll4 Discussion of Results ............... ll4 VIII. CONCLUSIONS, LIMITATIONS, AND FUTURE RESEARCH ...... llS Conclusions ...................... llS Limitations of the Research .............. ll7 Future Research .................... llB Appendix A. SALESMAN'S EVALUATION FORM ................ l20 B SELECTED DIALOGUES FROM BUYER-SALESMAN INTERVIEWS . . . . I35 C. SELECTED DIALOGUES FROM BUYING COMMITTEE INTERACTIONS . . I39 D DATA AND ANALYSIS OF NEW PRODUCT DECISION CRITERIA-— MIDWESTERN SUPERMARKET CHAIN ............... I70 E. DATA AND ANALYSIS OF NEW PRODUCT DECISION CRITERIA-- EASTERN SUPERMARKET CHAIN ................ I72 F. QUESTIONNAIRE ON NEW PRODUCT DECISION CRITERIA ...... I74 G. NEW PRODUCT INFORMATION AND BUYER'S APPROVAL FORM OF THE SUPERMARKET CHAIN STUDIED ............. I77 REFERENCES ............................ I78 vi LIST OF TABLES Table Page l. Spearman Rank Correlation Coefficients .......... 96 2. Relationship Between the Salesman's Performance and Buyer's Recommendation ................ 97 3. Relationship Between the Buying Committee's Decision and Buyer's Recommendation ............ 99 4. Relationship Between Salesman's Performance and Buying Committee's Decision ................ 102 5. Correlation Matrix .................... 106 6. Partial Correlation Coefficients ............. 107 Al. Summary of Salesman's Evaluation ............. 122 A2. Summary of Buyer's Evaluations of Salesmen ........ 124 A3. Average Scores of Salesmen's Qualities .......... 125 A4. Summary of Buyer's Recommendations and Buying Committee's Decisions on New Products ........... 126 A5. Perceived Salesmen's Qualities and New Products Decisions ......................... 132 A6. Summary of Buyer's Decision-Making Criteria Importance Scores ..................... 133 A7. Summary of Buyer's Ranks of Criteria ........... 134 Dl. Buyers Purchasing Criteria Importance Scores (A Midwestern Supermarket Chain) ............. 170 DZ. Ranks of Buyer's Purchasing Criteria Based on Mean Importance Scores .................. 171 El. Buyer Purchasing Criteria Importance Scores (An Eastern Supermarket Chain) .............. 172 E2. Ranks of Buyer's Purchasing Criteria Based on Mean Importance Scores (An Eastern Supermarket Chain) ..... 173 vii Figure I. LIST OF FIGURES A simplified model depicting the new product decision-making process in supermarket chains using buying committees Interpersonal communication Hypothesized relationships ................ viii CHAPTER ONE INTRODUCTION Research Objective The main objective of this research is to study the decision-making process for the acceptance or rejection of new products by a supermarket chain which uses buying committees. In particular, this study focuses on: (1) the relationship between the salesman's qualities and the chain buyer's recommendation on the new product to the buying committee; (2) the extent of the chain buyer's influence in the buying of new products; (3) the effectiveness of two- man buying committees; and (4) the decision-making criteria used by the buying committees in adopting new products. Rationale The key to the survival and growth of U.S. business is continuous deve10pment of new and improved products. It is becoming more expensive and risky for firms to innovate, but they cannot afford not to do so in the face of mounting competition. This new product development dilemma is of greater concern to the firms than ever before. Various studies (98, 99, 118) have shown that many new products fail, although there is considerable variation in the rate of failure. The varying failure rates are due to the use of different stages of new product developments and the definitions of the new product. Furthermore, the life span of successful products is shortened by the quick duplication of the product by competitors. The numerous new products which fail each year mean that considerable amounts of valuable economic resources are wasted. Although the problem can never be eliminated, its effects definitely can be reduced through careful planning and effective marketing strategy. Some research studies have shown that new product failure is generally due to basic marketing weaknesses rather than unsound products. Buzzle and Nourse (28), in a study of the food industry, found that inadequate market analysis, poor timing, failure to obtain adequate distribution, severe competition, and insufficient marketing efforts were particularly significant factors. Angelus (9) analyzed 75 major consumer packaged goods and reported the reasons for failure, in order of importance, as being vague consumer differences, poor product positioning, no point of difference, bad timing, product performance, and incorrect market for the company. A recent study by Abrams (2) indicated the reasons of failure as the consumer's unwillingness to buy, higher price, bad timing, imitation, and poor advertising; similar reasons also were implied by Moran (108) in an article in the Journal of Advertising Research. An effective marketing strategy design for new products requires knowledge of buyer behavior both at the consumer and the channel levels. Much less research has been done on new product buying at the latter than at the former level.1 Since a new product rejected by a channel member is not available to the consumer, it is considered a failure. An understanding of behavior at the channel level will definitely help reduce the risk and cost of introducing new products in the marketplace. Channel members, or resellers, commonly are referred to as middlemen, selling intermediaries, dealers, distributors, or simply as wholesalers and retailers. They acquire goods for the sole purpose of reselling or renting them to others at a profit. One type of reseller responsible for very high dollar volume and for the intro- duction of a large number of new products is the supermarket chain. Supermarket Chains In 1973, supermarket sales totaled $80.8 billion, or 76.4 percent of the total dollar volume of all food stores in the United States. The number of supermarkets in operation at the end of 1973 was 43,137 (of which 30,072 were owned by corporate chains), compared to a total of 240,000 food stores in the United States, thus consti- tuting approximately 18 percent of such establishments. Of these 43,137 supermarkets, 33,320 (approximately 14 percent) with annual sales of $1 million or more accounted for total sales of $72.5 billion, and 16,886 supermarkets (approximately 7 percent) with annual sales of $2 million or more accounted for total sales of $45.325 billion (24). 1For a recent study see Michael D. Hutt, "The New Product Selection Process of Retail Buying Committees: An Analysis of Group Decision-Making," Ph.D. dissertation, Michigan State University, 1975. It is evident that it would be very fruitful to study the factors affecting the buying decisions for new products used by the supermarket chains. In particular, their high dollar sales volume, the large number of new products involved, and the small number of supermarkets accounting for most of the sales in the food industry make them especially attractive. New Product Acceptance Rate The number of new items offered to the supermarket chains each year is quite large. Graf (54) estimated these in 1967, defined as warehouse items, at 8,750. Progressive Grocer reported that new items are the most profitable ones in the supermarket product mix, and only 10 percent of these were accepted in 1967 due to limited shelf space. Weiss (149), in a 1956 study, reported a similar rate of new product acceptance. Advertising_Age (109) stated that 9,450 supermarket items were introduced into the market in 1968, and less than 20 percent met sales goals. But a recent Chain Store Age (150) grocery buying survey indicated that the retailers review only an average of 3,000 deals every year, with the number of new product presentations being much lower; all the chains and wholesalers reported an annual average of 1,300 new product presentations, or 25 per week. The companies reportedly accepted an average of 22 percent of the new items reviewed, or approximately 285 per year. The survey further indicated that 19 percent of the companies accepted 50 or less; 25 percent took on between 51 and 100; 19 percent accepted between 101 and 200; 25 percent took on between 201 and 500; and only 12 percent accepted 501 or more. The increase in the new product acceptance rate probably is due to the reduction in the number of new items reviewed by the super- markets. This may be the direct result of a screening procedure now used by the chain buyer, who first talks to sales representatives on the phone and weeds out weak products. Chain Store Age (113) reports that this procedure reduces the number of interviews by 50 percent. Of all the new items accepted by the supermarket chains, approximately 50 percent survive after 90 days. The product on the shelf must sell, and at a rate that justifies the investment of shelf space. Otherwise, it will be replaced by another product of higher profitability (29). Shelf space is continually reviewed to find the fast and slow movers, to give more space to the former and to eliminate the latter. Buying Committees Increased emphasis on chain-wide rather than single departmental requirements has led many chains to shift from the individual departmen- tal buyer to the buying committee system. The buying committee is con- cerned with the overall chain objectives and profits rather than those of particular stores or departments (52). A recent Chain Store Age (150) grocery buying survey, based on a sample of 48 chains and whole- salers in all sections of the country and representing 4,700 supermar- kets, indicated that 63 percent of the nation's retailers are currently using a buying committee. Grashof (55) has divided supermarket buying structures into three categories: (1) the buyer makes all the decisions; (2) the buying committee makes all the decisions; and (3) a combined procedure, whereby the buyer may or may not reject new items and suggest that certain items be deleted, with the buying committee making most of the decisions. The rationale for using a buying committee is that it provides a more analytical approach to the selection of new items. Supermarkets using this system believe that by pooling the knowledge of buyers coupled with the opinions of store operations personnel and merchan- disers, they can best determine how a particular item or line fits into the store's total concept (35). Many companies also feel that the buyer is often placed under undue pressure by the salesman. Under the com- mittee system, the buyer, after hearing the salesman's presentation, sets aside the proposal until the weekly buying committee meeting. He then presents the new items and sometimes makes specific recommendations. The decision to accept or reject depends on the entire buying committee. Leed and German (92) have summarized the advantages and disadvantages of the buying committee as follows: Advantages: l. Permits a wider range of ideas and experience to come to bear in the decision-making process. 2. Takes the buyer "off the spot" in his face-to-face relationship with the salesman. 3. Allows for a decision to be made in a more scientific atmosphere. Disadvantages: l. The delay in making the decision to accept a new item-- and the subsequent delay in getting the item stocked in the stores. It is important to have the item stocked in the stores when the major advertising programs break. 2. Committee meetings that take up valuable time of all buyers--even those who are not specifically involved with the product being presented. 3. A disadvantage to the food manufacturer and the sales representative because the buyer does not always present all the facts and sometimes he presents them incorrectly. Also, the buyer does not usually present the new item with the same enthusiasm to the buying committee that the salesman would have in making his original presentation to the buyer. To these disadvantages the researcher would add two others: 4. The seller is usually not given the exact reason why the retailer turned him down. This does not happen in face-to-face confrontation. 5. Committee members who do not know much about a product have an equal vote in the committee decision. It is possible that a good product which the chain should buy may be rejected. Membership of Buying Committee The number of members and types of executives who serve on buying committees vary from chain to chain. Committee size may range from two to ten, but most have four to six members (92). Buyers are overwhelmingly represented, as a Chain Store Age (150) survey revealed; the survey of 48 chains and wholesalers indicated that 93 percent of the committees included buyers. One individual usually dominates a committee, and the group tends to vote the way he does (113). Consequently, some chains use a two-man buying committee, consisting of a buyer and a merchandiser (usually a corporate executive). The buyer makes recommendations concerning new products, but the final decisions rest with the merchandiser. This kind of buying committee is referred to as the "one-to-one" or buyer-merchandiser type. The chains using this form claim it is more efficient than other systems. This type of buying committee probably eliminates disadvantages l, 2, and 5, listed above, while retaining all the advantages noted previously. Intuitively, this kind of buying committee makes good sense, and we may expect the future trend to be in this direction. The number of chains currently using the "one-to-one" type of buying committee is not known. Role of Buyer In the chains using a buying committee, the role of the buyer has become that of a coordinator, or gatekeeper, the funnel through which all communications flow. Indeed, it is a vital role. He is becoming more of a specialist because of (1) an increase in the number of items handled by the chains, (2) limited shelf space, (3) an empha- sis on chain-wide requirements, and (4) the availability of assistance from data processing experts. The role of the buyer varies, depending on the organization. In some chains he is responsible for all decisions ranging from new item buying, to store displays, to shelf positioning in his area. In other chains he is supported by a buying committee, which has the authority to make final decisions or which may act in an advise and consent capacity. The chain buyer receives most of the information about the supplier's offerings through the supplier's salesmen (although some suppliers use food brokers, manufacturer's representatives, and so forth). These salesmen are the supplier's link with the marketplace and also are the source of much needed information from the marketplace. Salesman's Classification and Qualities Several methods for classifying sales positions have been suggested. McMurry (104) used seven broad categories, ranging from the least to the most creative types of selling. Another means has been suggested by Newton (116), using a behavioral science perspective. His four major categories are trade selling, missionary selling, tech- nical selling, and new business selling. Of these four, the one with which this study is concerned is trade selling. Newton describes this as low-key selling supported by the company's selling efforts, and it predominates in food, textile apparel, and wholesaling. Yet another behavioral viewpoint has been discussed by Thompson (141), who sees the trade salesman as a problem solver and an educator (educating the buyer, who in turn educates a buying group). Thompson calls him the "market manager" of a territory. In any case, most of today's channel salesmen are involved in creative selling. Leed and German (92) have summarized the key points that the buyer wants to hear from the salesman during the sales presentation: product characteristics, suggested shelf location, test market results, suggested retail price, advertising program, special allowances, product handling methods, and sample of the new items. The salesman is generally allowed 15 minutes to make his presentation to the buyer. 10 The present study shows that the qualities of a salesman as perceived by the buyer influence the decision-making process leading to the selection of new products. The salesman's qualities analyzed here are grouped into three major categories: (1) source credibility-- expertness, trustworthiness, and dynamism; (2) empathy--task and social; and (3) preparation and planning. Expertness or competence refers to the expertise, knowledge, ability, or technical understanding of an issue by the source (72). Trustworthiness relates to the source's motivation in communicating about the issue, that is, his objectivity (72). Dynamism is a combination of the potency and activity dimension; examples are confidence, aggressiveness, boldness, and activeness (20, 141). Empathy is "putting yourself in the other fellow's place" (6). Task empathy "refers to material that is specific in terms of the problem that faces the buyerJ'while social empathy is "the kinds of things the salesman says and does that either leaves the respondent feeling positive, negative, or neutral in terms of his emotional or personal needs" (142). Preparation and planning refers to the efforts expended by the salesman prior to the actual contact with the buyer. Of the several qualities of the salesman mentioned above, expertness, task empathy, and preparation and planning are the three most important from the buyer's point of view. The Decision Process The buyer's filtering process is influenced by several factors: the written and verbal messages about the new product from the salesman, and information from other external sources such as other salesmen, mass 11 media, magazines, other buyers, store visits, and the company's records. Using his evaluation criteria to assess the alternatives, the buyer finally makes his presentation and recommendations on each new product to the buying committee. The committee then decides whether or not to take on the new product, and it makes these decisions using certain criteria. Very few studies have investigated the major criteria used in the selection of new products, and such results as there are show significant differences in the criteria used. These decision- making criteria are discussed more fully in Chapter Four. Scope, Procedure, and Limitations The main objective of this research, as stated earlier, is to study the decision-making process for the acceptance or rejection of new products by supermarket chains which use buying committees. In order to achieve this objective several questions need to be answered: What salesman's qualities are the most important to the buyer in eval- uating his performance? Does a good salesman's performance result in the acceptance of his product by the buying committee? How influential is the buyer in the selection of new products? How efficient is a two- man buying committee? What are the major criteria used in the selection of new products? Do all buyers use the same criteria in the selection of new products? These questions are somewhat broad in nature and must be narrowed down to a manageable form. This is done in Chapter Four. The data to answer the above research questions were obtained through the use of several techniques: (1) rating of the salesman's 12 qualities by the buyer and the researcher after each sales presentation on a specially developed salesman's evaluation form; (2) taping of the salesman-buyer and buying committee interactions; (3) rating of the decision-making criteria by the buyers on the questionnaire developed for this study; and (4) ranking of these criteria by the buyers. There are some limitations to this study: Data from only one chain are collected; a small number of buyers are involved in the study; there may be response bias due to the presence of the researcher during the presentations; and a precise definition of chain efficiency is lacking. Plan of Study In this chapter, the research objective, rationale for the study, and various components of the new product decision process used by supermarket chains which use buying committees were presented. In particular, the following were discussed: supermarket sales, the buying committee and its advantages and disadvantages, membership of buying committees, role of the buyer, the decision process, and the scope, procedure, and limitations of this study. In Chapter Two various components of the decision-making process discussed in Chapter One are combined, and their interrela- tionship is examined. A model for the new product decision-making process developed for this study is presented, and the boundaries for the literature search are determined. 13 In Chapter Three the literature review is divided into five broad areas: buyer behavior models; information processing; attitude; salesman's qualities; and small group decision making. The research questions which need to be answered for this study are discussed in Chapter Four. Some of these questions are then defined more precisely for the research to be operational. Several hypotheses are constructed from these research questions, and these are discussed in Chapter Five. The methodology used in this study is outlined in Chapter Six. Included are the background and organizational set-up of the supermarket under study, research instruments, definitions of new products, data collection, and the statistical tools required. The data collected for this study are analyzed and the results are discussed in Chapter Seven. In particular, a list of decision- making criteria actually used by the supermarket in the selection of new products is presented, the research hypotheses are tested, the research questions developed in Chapter Four are answered, and the results of the research are examined. Finally, in Chapter Eight the conclusions drawn on the basis of the results of this study are summarized, the limitations are discussed, and some suggestions for future research are made. CHAPTER TWO THEORETICAL FRAMEWORK Various components of the decision-making process in supermarket chains using buying committees were described in Chapter One. In this chapter, these components are combined, and their interrelationship is examined. Figure 1 displays a simplified model depicting the new product decision~making process in supermarket chains using buying committees. The solid lines indicate the flow of information, and the dashed lines indicate feedback effects. The central focus of this study is the flow of communication, specifically, between (1) the buyer and salesman (referred to as the "buyer-seller dyad" or "interpersonal communication"), and (2) buying committee members (small group decision making). Barnlund (14) has reviewed many definitions of communication, and from among these, one is generally agreed upon: “Communication takes place when a message has been transmitted by a source and the intended point is grasped by the recipient" (43, p. 308). Engel, Wales, and Warshaw (44) have presented an interpersonal communication model between two persons, Mr. A and Mr. B (see Figure 2), which is a composite of many models and theories which have appeared in the vast literature of communication. Mr. A (source) arranges words in a pattern or sequence to be communi- cated, referred to as encoding. The encoded message is transmitted I4 5 I .muouuwsaau mcmxza mcwm: m:_mgu umxngLuaam cw mmouoen mcwquI=o_mruov wastage so: use acmuuwnmc vaos commwpasmm < .P ocamwa cowmwooo pusuoga :mz ) _ awaauveu comuumpwm coauoga :mz _ _ _ _ _ . _ _ _ + Acowmmaomwov mmehflzon wzH>3m 1-1-1-1----11L mwgmuwcu cowumapm>u m.cwz=m cowuuunwm «- 333...... I. muumtu 3339. I I I I =o_umELo$:_ mo :o_m census mmuu_esou u : _ _ _ _ _ _ _ _ _ m>HH_umu:mmmgaom muFom _ co 8.52:5 {was .. .. I. u 1 I mlflwflgncm wmumomawwau wazm _ _ _ _ . _ _ . _ «romwoovrzEeoo / _ _ d «rowucowrxsEoo Noasosro: pro Menace / Nonsense: new Nomads "Mono new xmuumsky t mmmmoocn «Need use xmuuwzkc cowumucmmoc m mmmme uw~_LmEE:m :wmmHWde muozuoc. 3w: :0 mm.mmmwz zo_kmmucma .m_ .a .Apump .cwng ".FFH .uoozmeozv .vm ummw>mc .xdupmgum Pecowposoga .zmgmcmz .m .2 use .mwpmz .w .1 .mecu .u .n "mucsom m .Lz Lm>wmuwm .cowumowcsssou chomcmacmucH .N mczmwa xumnnmma pumccm umucmucH a < .Lz chcmcu mammmmz mucsom a ucmucou umucmch I7 through the spoken word or some other type of channel to Mr. B (receiver), who attempts to decode the message and arrive at its meaning. The actual meaning can deviate substantially from the intended meaning through selective information processing by Mr. B. Mr. A receives feedback in the form of verbal and nonverbal responses from Mr. B. In the interpersonal communication process, the salesman (source) sends messages to the buyer (receiver) on the new products through written and oral, verbal, and nonverbal communication. The salesman receives feedback from the buyer in verbal and nonverbal forms. (A two-way communication takes place.) The information received by the buyer passes through the buyer's filtering mechanism for further processing (43). Not all the stimuli to which the buyer is exposed are allowed to pass through the filter, only those which the buyer wants to process and store in memory. This selective information (from salesman and other external sources), the buyer's information and experience, his evaluative criteria, and his personality characteristics, all form his attitude (43). The buyer reflects his attitude on the new product (when he makes his presentation) through his recommendations to the buying committee. It is important to note that the buyer is not a decision maker, but merely expresses his atti- tude toward the new product. He plays the role of a gatekeeper. His recommendation with respect to purchasing depends on the strength and valence of the attitude he holds on the new product.1 1For the definitions of strength and valence, see "Attitude" in Chapter Three. 18 In a study similar to the present one, Sweitzer (139) asked the buyer, immediately following the presentation by the salesman, to express his intention to buy. Other factors are involved in the decision-making process, however. Several are: l. The buyer makes his recommendation to the buying committee after reviewing the new item sheet, com- paring similar items carried, receiving feedback from other salesmen and buyers, SAMI, and so forth. 2. The buyer makes his recommendation to the buying committee after a period of time (varyin from one to eight days; generally one to two daysI. There is a time lag. 3. The buyer is not a decision maker. The concept of "intention" involves a buyer's intention to buy a particular brand during some specific time period (72, p. 132). Thus, the Sweitzer study measured the attitude of the buyer immediately after the salesman's presentation. However, because of the above-mentioned factors, the buyer's attitude may change. He may think and feel differently when he presents information to the buying committee. For instance, during the time lag the buyer's attitude may change because of external sources, such as other salesmen, mass media, trade magazines, store visits, other buyers, the company's records, suppliers' marketing policies, and so forth. These external factors are beyond the scope of this study as defined in Chapter One. Finally, it is the buying committee which makes the ultimate decision on new products. Therefore, joint decision making in small groupS'hsrelevant to this research. The study of small groups involves leadership, membership, size, group conflict, group cohesiveness, and so 19 forth. Some of the research on the buying committee and its membership has already been discussed in Chapter One. In summary, the discussion of the decision-making process suggests the search of the literature in the following three broad areas: (1) buyer's information processing and attitude; (2) salesman's qualities; and (3) small group decision making as it relates to committees. CHAPTER THREE SURVEY OF LITERATURE In the previous chapter a model depicting the decision-making process for accepting new products in those supermarket chains which use buying committees was presented. This chapter reviews the liter- ature and discusses relevant theories and models which explain the various aspects of the decision-making process pertinent to this study. The literature review is divided into five broad areas: buyer behavior models; information processing; attitude; salesman's qualities; and small group decision making. The discussion of buyer behavior models is included because it is vital to an understanding of the buyer's information processing system and his attitude. Buyer Behavior Models Buying and selling differ considerably in industrial and consumer markets. Consequently, efforts are being made to develop a model to explain buyer behavior in the two markets. Most of the models developed to date have been directed towards consumers, and relatively little has been done to explain the behavior of industrial buyers. While there are differences, consumer behavior models tend to provide the basic framework for the industrial buyer behavior models 20 21 (148).1 The major difference between the two is that the industrial buyer behavior models involve multiple organizational influences on the buyer, and the consumer models do not (multiple influences from family members do affect the consumer but are not incorporated in the models). Sheth (133) has suggested a theory of family buying decisions involving joint decision making. Howard and Sheth (72) point out that at a conceptual level the constructs used to explain buyer behavior for industrial buyers and consumers may be identical. Therefore, the rele- vant constructs from the consumer behavior models are used in this study. There are several models which have been proposed to explain consumer behavior: the Nicosia model (117); the Andreason model (8); the holocentric model of consumer behavior (100); the Engel, Kollat and Blackwell model (43); and the Howard-Sheth model (72). The last two have gained the most popularity. The authors of both models have thoroughly documented the research in the behavioral sciences relevant to marketing. However, the Howard and Sheth model is considered to be the most thorough, comprehensive, and well-articulated consumer behavior model published to date. Compared to other models, it is distinguished by a richer specification of variables and their interrelationships, and it attempts a much deeper and more detailed integration of theoretical positions from several behavioral sciences (97). Howard and Sheth's (72) theory of consumer behavior consists of four sets of abstractions, which they refer to as constructs or varia- bles. These are: (1) input variables, (2) output variables, (3) 1Also see Jagdish N. Sheth, ”A Model of Industrial Buyer Behavior," Journal of Marketing 37 (October 1973): 50-56. 22 hypothetical constructs, and (4) exogenous variables. The input variables are essentially the stimuli from the buyer's environment (social, significative, and symbolic). The output variables are attention', brand comprehension', attitude', intention', and purchase'. The input and output variables are the least abstract of the four constructs. The output variables are the measurable counterparts of certain of the hypothetical constructs and hence are designated with a prime. The hypothetical constructs are of two types: perceptual and learning. The perceptual constructs are attention, stimulus ambi- guity, perceptual bias, and overt search. The learning constructs are motives, brand comprehension, choice criteria, attitude, intention, confidence, and satisfaction. The exogenous variables are importance of purchase, personality variable, social class, organization, time pressure, and financial status. Engel, Kollat, and Blackwell's (43) multimediation model of consumer behavior can be divided into four parts: (1) the individual's psychological make up, consisting of stored information and experience, evaluative criteria, attitudes toward alternatives, personality, and filter; (2) information processing, consisting of exposure, attention, comprehension, and retention; (3) the decision_process, consisting of problem recognition, internal search, external search, purchase, and outcomes; and (4) the influence of external constraining forces such as norms, family, income, and so on. Howard and Sheth (72) state that activation or change in any of the variables in response sequences (the network of relations among the output intervening variables) depends on (1) the buyer's internal 23 state (classified into the attention, attitude, and intention constructs) and (2) a series of factors involving mass communication, such as source, channel, and message, which are beyond the scope of this study. The buyer's internal state is very important in the study of symbolic communication (mass media and word-of-mouth). Therefore, the literature on attention and attitude should be examined because these are the two hypothetical constructs pertinent to this study. The literature on attention is reviewed under the broader concept of information processing. The "intention" construct, which links atti- tude with the purchase, is deleted because the buyer is not a decision maker, and he only makes his recommendation to the buying committee, thus reflecting his attitude (the affective component) only. Information Processing The senses of each individual are constantly and overwhelmingly exposed to environmental stimuli. This sensory information is inter- preted by a complex mechanism (information processing) to extract the content meaningful to the individual. Cognition is a broader term generally used to describe information processing. Neisser (112, p. 4) defines cognition as "all the processes by which the sensory input is transformed, reduced, elaborated, stored, and used." The vast number of incoming stimuli are regulated by the process generally referred to as "filtering." 24 The Filtering Process The incoming stimuli pass through a filter which regulates the inflow. Only those stimuli which receive intensive analysis pass through the filter to become part of the individual's memory and avail- able for decision making. This selective or filtering process occurs because the individual's central nervous system cannot attend to all stimuli which are received and therefore must be selective (43). Deutsch and Deutsch (41) imply the existence of the filtering process and suggest that the individual (buyer, in this case) weighs the sig- nificance of the incoming information according to some importance criteria. The data which meet these criteria receive the individual's attention. Almost all the buyer behavior models explicitly or implicitly include the filtering process. Howard and Sheth (72) describe three sources by which the buyer controls the nature of the flow of infor- mation into his nervous system. These hypothetical constructs are attention, overt search, and perceptual bias. Howard (70) concludes that the buyer takes in only that information which he expects will be useful in making purchase decisions. There is general agreement among researchers regarding a short- term memory in the filter; here the incoming information is stored while receiving preliminary interpretation. Neisser (112) terms the two parts of this short-term memory as "iconic" and "echoic." In the case of iconic memory the visual impressions persist for at most one second after the stimulus itself has terminated. A similar process for 25 auditory stimuli is referred to as echoic memory. Far more stimuli receive this preattentive processing than actually enter into the memory ( 43) . In view of the above, it could be inferred with regard to this study that the buyer's selection criteria to control incoming stimuli are functions of both his purchasing criteria and his affective state toward the salesman and the product he is selling. It should be pointed out that although there is considerable support for the existence of a filtering process and some sort of weighting of importance construct, as suggested by Deutsch and Deutsch (41), its exact nature and functioning is not very clear. Phases of Information Processing In the Engel et a1. model (43),2 the filtering process takes place within the central control unit, consisting of the filter, information and experience, evaluative criteria, attitude, and personality. The filter is the most important part of the central control unit because it regulates the inflow of stimuli. They have ably summarized the research on information processing, and they describe the four phases of this processing as (1) exposure, (2) attention, (3) comprehension, and (4) retention. In the Engel et a1. model the filter works at all stages of information processing, thus implying that attention does not guarantee comprehension, and 2This section is adopted from the Engel, Kollat, and Blackwell model. See James F. Engel, David Kollat, and Roger Blackwell, Consumer Behavior, 2nd ed. (New York: Holt, Rinehart & Winston, Inc., 1973), pp. 209-225. 26 comprehension does not guarantee retention. The research pertinent to the four stages noted above is reviewed below. Exposure is said to occur when an individual is confronted with a stimuli in such a way that one or more of his senses is activated. Selective exposure is a process by which an individual censors his incoming stimuli. Howard and Sheth (72) consider selective exposure and selective retention as part of their hypothetical construct, "per- ceptual bias." Although there is some disagreement among researchers about the existence of selective exposure, it is generally agreed that the individual does censor incoming stimuli to avoid disturbances of existing beliefs and dispositions. This is referred to as "maintenance of cognitive consistency." Attention is defined as "the taking possession by the mind, in clear and vivid form, of one out of what seems several simultaneously possible objects or trains of thought" (77). The stimuli temporarily are stored in the memory through a preattentive processing, followed by analysis of pertinence. Preattentive processing is the response of an individual to a new stimulus (by one or more senses), and stimuli con- sidered to be important are allowed to pass through the filter. The process of determining pertinence, referred to as focal attention by Neisser (112), involves: (l) the influence of need states, both physical and psychological; (2) perceptual vigilence, a form of selective attention in which words that connote important values often are perceived more readily (122); (3) perceptual defense, or delay or avoidance of threatening or low valued stimuli, the opposite 27 of perceptual vigilence; and (4) maintenance of cognitive consistency, which is the tendency to resist changes to avoid disturbances of existing beliefs and dispositions. Comprehension is a process whereby the filtering system may categorize the meaning of the stimulus in a way which deviates from objective reality. The two most important methods are distortion of physical stimulus properties and miscomprehension of the communication message content. Retention refers to the fact that, due to the highly selective nature of long-term memory, not every stimulus is retained. Howard and Sheth (72) consider selective retention as a part of the hypothetical construct "perceptual bias." Attitude Attitude is one of the most important constructs in understand- ing buyer behavior. Almost every buyer behavior model uses this hypothetical construct, although the definition of attitude may differ. There are several definitions in the literature. Allport (5) defines attitude as "a mental and neural state of readiness to respond which is organized through experience and exerts a directive and/or dynamic influence upon individual's response to all objects and situations with which he is related." Katz (79), using a functional approach to attitude, describes its four major functions as (1) instrumental, adjustive, or utilitarian; (2) ego-defensive; (3) value-expressive; and (4) knowledge. Another framework based on the work of several 28 theorists suggests the three main components of attitude are cognitive, affective, and conative, or action tending (17). The cognitive component consists of beliefs the individual holds about the object, including evaluative beliefs, or the attribution of favor- ableness or unfavorableness, positive or negative valences, "goodness" or "badness" (86). The affective component relates to emotions or feelings toward the object, such as like or dislike. The conative or action tendency components consist of the behavioral aspects of an attitude, more precisely, the potential or readiness to respond. Thislatter'classification of attitude is most widely accepted. Howard and Sheth (72) use all three components discussed above, but only in a restricted sense. They define attitude as "a cognitive state that on a number of dimensions reflects the extent to which the buyer prefers in terms of motives each brand in his evoked set in relation to all other brands in that set. It represents only a directive motivational effect, not an energizing or arousal effect" (p. 416). They use another hypothetical construct, "intention," to link attitude with purchase. In the Engel et a1. model (43) both stored information and evaluative criteria are conceived to be the components of attitude. Another concept relating to attitude which is pertinent to this study is referred to as "salience." It is the quantity of an attribute desired in a product. The salience attribute may vary among buyers. 29 Measurement of Attitude With regard to the measurement of attitude, Hughes (73) reports that there are at least three measurable prOperties: valence, strength, and intensity. Valence is positive if the attribute is perceived as goal facilitating, and negative if it inhibits goal attainment. Strength refers to the degree or probability of goal attainment. The strength of an overall attitude is proportional to the number of product attributes that are perceived as facilitating or inhibiting goal attainment. Attitude intensity reflects a person's concern with a goal. Salience is generally measured by asking the subject to weight or rank attributes according to their importance to him (73). The probability of acting favorably toward the brand is a function of the products of salience and valence (Hansen, 59; Hughes and Guerrero, 74; Hughes and Naert, 75). Theories of Cognitive Consistengy There are several theories of cognitive consistency in the literature. Osgood (119) considers conceptual conflict in terms of mediating responses to various signs (stimuli). Festinger's (47) dissonance theory focuses on the relationship between cognitive elements (beliefs, evaluations, perceptions) and overt behavior. When dissonance is present, the individual tries to reduce it, and its strength depends on the importance of the areas in which the conflict occurs. Most of the application of Festinger's dissonance theory in marketing is in the post-transaction period. In the cognitive imbalance theory, 30 imbalance exists when two positively or two negatively valued elements are disassociatively linked or when a positively valued and a negatively valued element are associatively linked (1). In either of these cases, there is postulated to be a "pressure towards the attainment of cogni- tive balance." Heider's (63) balance model is very similar to the cognitive imbalance model just described, and Osgood and Tannenbaum's (121) congruity model is a refinement of Heider's balance model. Berlyne (22) suggests a theory of conceptual conflict. Individuals tend to associate incoming information with other concepts. and six types of conflicts may arise: (l) gpppt, the tendency to both believe and disbelieve the same statement; (2) perplexity, wherein factors lead the subject toward a number of mutually exclusive beliefs; (3) contradiction, or symbolically illogical sequences; (4) conceptual incongruity, wherein two properties coexist contrary to the individual's belief that they are unlikely to do so; (5) confusion, or stimulus pat- terns that are ambiguous or can be confused with another; and (6) irrelevance, the inability of the individual to clearly link thoughts, so that a state of discomfort emerges. Implications for the Buyer-Seller Relationship Attitude change is one of the most important objectives of the marketer in personal selling. In buyer-seller interactions the sales— man constantly tries to persuade the buyer to have a positive attitude toward his product, if the buyer already does not. The positive atti- tude of the buyer toward the salesman is also important. An imbalance 31 occurs when the salesman has a positive attitude toward his product (as he normally does) and the buyer has a negative attitude toward the product or salesman. According to the congruity, balance, and dissonance theories, to restore balance, the buyer must change his evaluation of the salesman or the product. In the buyer-seller relationship, the buyer's satisfaction may arise from the opportunity to make sound purchasing decisions. Anything the seller can do to help the buyer in this endeavor will create positive affective values in the buyer toward the salesman. The salesman can facilitate this process by providing pertinent information and by reducing the buyer's conceptual conflict, thus enhancing cognitive consistency. Pertinent information will receive more attention from the buyer and hence may affect his attitude. Therefore, careful planning and preparation on the part of the salesman are very important for effective communication between the buyer and the seller. This kind of planning coupled with high source credibility and high empathy can help reduce the buyer's conceptual conflict. Another factor which helps mold the buyer's attitude toward the salesman's product is the buyer's purchasing decision-making criteria. The salesman can utilize the understanding of these criteria to his advantage through task empathy. All of these qualities of a salesman (source credibility, empathy, and planning and preparation) are discussed in the next section. 32 Salesman's Qualities One facet of an individual's personality is composed of definite predispositional attributes, called traits. A trgit_is defined as "any distinguishable, relatively enduring way in which one individual differs from another" (58). With this definition in mind, traits can be considered as individual difference variables. Guilford (58) points out that traits are common to many individuals, while Mischel (107) concludes that traits vary in absolute amounts among individuals. Generally, traits are assumed to be relatively stable and to exert fairly universal effects on behavior regardless of the environmental situation (128). Therefore, traits could be used to predict behavior. The distinguishing features of salesmen with which this study deals are more appropriately referred to as "qualities" rather than traits. The following definitions from Webster's New World Dictionary of several words which often are used interchangeably help clarify the choice of the word quality:3 trait--specifica11y applies to distinguishing quality of a personality. characteristic--suggests the indication of a quality that is peculiar to, and helps identify, something or someone. attribute--is a quality assigned to a thing, especially one that may reasonably be deduced as apprOpriate to it. guality--the broadest in scope of these terms, refers to a characteristic (physical or nonphysical, individual or typical) that constitutes the basic nature of a thing or is one of its distinguishing features. 3Webster's New World Dictionary of the American Language, college editionTTNew York: The WorldTPublishing Companyj—1956), pp. 245, 1189. 33 Referring to the simple interpersonal communication model presented earlier, the source (the salesman) comes in face-to-face contact with the receiver (the buyer). The main purpose of the salesman is to communicate with the buyer about his product and influence and/or persuade the buyer to purchase it. When the buyer has no authority to make decisions, the salesman's main purpose is to influence and/or persuade the buyer to make a favorable recommendation to the buying committee, hoping his product will be accepted. The buyer's recommendation/decision to buy the product depends in large measure on how much he believes the salesman's words or actions, or in other words, how much trust, confidence, and faith he has in the salesman's words and actions. According to Heider's theory, the sales- man's success in many instances depends on his credibility as a source because the level of credibility that the respondent (buyer) assigns to the salesman in turn directly affects how he views the salesman's products, or services (151). This variable is discussed in the lit- erature as "source credibility" and is an important salesman's quality. In the interpersonal communication model discussed earlier, the source (salesman) has both an intended content and an intended effect for the message. For this intent to be encoded into a message, the source must place himself in the respondent's (buyer's) position through the process of empathy. Therefore, empathy, or the ability of the salesman to place himself in the respondent's position is another important salesman's quality. 34 Yet another factor affecting the buyer's decision process, as suggested by Thompson (141), is a salesman's planning and preparation prior to the actual presentation. Thompson calls this the "sales call objective," which is selected from strategy (salesman's plan). Planning is intertwined in all the activities of a good salesman. It is defined as the process of thinking ahead about what must be done and about why, when, where, and how it must be done. To be effective the salesman must plan. The importance of planning and preparation is further magnified by the limited time allotted by the buyer to the salesman for making his presentation. In summary, a credible, empathetic, and well-prepared salesman is more likely to receive the buyer's attention. In the following pages the literature regarding these three main qualities is reviewed. Source Credibility Communication research has consistently validated the conclusion that a source with "high credibility" is much more effective than one with "low credibility" in the communicating, influencing, and persuading processes. A number of studies using single but differing source attributes show that when that attribute was present in the source message, the message was perceived to be more credible by the receiver. Some of the variables used in these studies were perceived objectivity (69); competence (64); the source's prestige (3); trustworthiness (68); and lack of manipulative intent (147). A number of studies have used two source attributes as a measure of credibility. One of these, the well-known experiment conducted by 35 Kelman and Hovland (82), used expertness and trustworthiness as two components of source credibility. Three versions of a radio broadcast were listened to by three groups of high school students. The same speaker and speech were used, but the speaker was introduced differ- ently each time, first as a court judge (high credibility), then as a person drawn at random from the audience (neutral credibility), and finally as a juvenile delinquent (negative credibility). The results showed that the higher the credibility, the greater the source effec— tiveness. In another study, Hovland, Janis, and Kelley (67) concluded that two dimensions of the source were especially relevant to effective communication: perceived expertness and perceived trustworthiness. In general, credibility is considered to consist of the two components discussed above, trust and competence (67, 68, 80, 82, 103). Trust relates to the source's motivation in communicating about the issue, that is, to his objectivity. The traits which are associated with trust are honesty, fairness, reliability, dependability, and open-mindedness. Competence refers to the expertise, knowledge, ability, or technical understanding of an issue by the source (72). Another interesting approach to the study of credibility has been suggested by Rarick (123), who proposed two elements of credibility, namely, a cognitive element that reflects the source's prestige and competence, and an affect element that reflects its trustworthiness and likeability. Several studies suggest components other than competence (expertness) and trustworthiness (130). Berlo, Lemert, and Mertz 36 (20) reported that receivers evaluate source credibility according to the source's perceived "safety" (his manipulative intent and pre- dictability), "qualification” (his topic-bound expertness as well as his general ability and intelligence), and "dynamism" (a combination of potency and the activity dimension). Mertz (106) further pursued the work of Berlo, Lemert, and Mertz and reported that safety, quali- fication, and dynamism were the principal determinants influencing acceptance in cases where the subjects perceived the messages as uniformly high or low on all three of the evaluative dimensions. McCroskey (102) reported components of credibility were "author- itativeness“ and "character." Most of the studies discussed above used semantic differential or Likert-type scales. Others used factor analysis to isolate the principal components, selection being based on the strength of association and the purity of factor loading (21, 102, 130). The dimensions of source credibility as identified by Berlo and Lemert (19) are used here. In addition to the two most widely accepted components,expertness and trustworthiness, they use a third, dynamism. The qualities which are associated with dynamism are con- fidence, aggressiveness, energy, boldness, decisiveness, and activeness. This variable is included in this study because the quality of dynamism, balanced with expertness and trustworthiness, enhances the credibility of the salesman. Too much dynamism, however, will reduce the salesman's source credibility (141). 37 There is some question about the credibility of the source being topic-bound, that is, the source is considered credible only on some issuescn~subjects. 'This differential credibility in the same individual may be due to the individual's competence rather than his lack of trustworthiness or dynamism. An interesting phenomenon reported in the literature in con- nection with source credibility is called the "sleeper effect," which implies that the credibility of the source is inversely related to retention of attitude change (66, 68). What probably happens is that the individual fails to associate the message with the source after a period of time, even though he may not forget the source. Then, if the credibility of the source is reinstated after a period of time, the effect is to create a greater attitude change by a highly credible source and less change by a less credible source (72). Empathy There are a number of definitions of empathy in the literature.“ "Putting yourself in the other fellow's place" is implied in most of the definitions (6). Phrases such as "putting yourself in the other fellow's shoes" and "seeing through the other fellow's eyes" also are commonly used. Such definitions suggest an identity between the empathizer and the individual with whom he empathizes. However, other definitions stress the detachment and the objectivity of the empathizer. I'The literature survey by Sweitzer on empathy was helpful. See Robert W. Sweitzer, "The Behavioral Factors Affecting the Flow of Information in the Buyer-Seller Dyad," Ph.D. dissertation, Michigan State University, 1974. 38 For example, English and English (45) explain empathy as "the comprehension of the state of mind of another person without feeling (as in sympathy) what the other feels. While the empathic process is primarily intellectual, emotion is not precluded, but it is not the same emotion as that of the person with whom one empathizes. The attitude in empathy is one of acceptance and understanding or an implicit 'I see how you fee1.'" Rogers (126) describes the empathic state as one of perceiving "the internal frame of reference of another with accuracy and with the emotional components and meaning which per- tain thereto, as if one were the other person but without ever losing the 'as if' condition. If this 'as if' quality is lost then the state is one of identification." The role-taking aspect of empathy is stressed in some defini- tions. Dymond (42) defines the empathic process as "the ability to put yourself in the other person's position, establish rapport and anticipate his feelings, reactions, and behavior." The main concepts in other definitions found in the literature stress the reciapathy-interactive component of the process (111); view empathy and role reversal as mutually complementary (27); see empathy as an intellectual and detached process (33); or consider the two aspects of empathy to be identification with the other person and an awareness of the object's feelings by awareness of one's own feelings (46). Thus, besides the generally accepted notion of empathy, namely, "to put yourself in another person's position,“ there is the aspect of "interaction," implied in the above definitions. This, indeed, is an 39 important dimension in the study of interpersonal communication effectiveness (125; 127). Sympathy has been alluded to, and it is important to dis- tinguish between empathy and sympathy. Both slice across the main classes of man's emotions. Krech and Crutchfield (87) have named six classes of emotions: (1) primary emotions: joy, fear, anger, grief; (2) emotions pertaining to sensory stimulations: pain, disgust, or delight; (3) emotions pertaining to self-appraisal: shame, pride, guilt; (4) emotions pertaining to other people: love, hate, pity; (5) appreciative emotions: humor, beauty, wonder; and (6) moods: sadness, anxiety, elation. According to them, empathy is "feeling the same emotion that is being expressed by another person, for example, feeling fear when another person shows signs of fright," whereas sympathy is “the experience of positive emotion pertaining to the emotional state or circumstance of another person, such as the mother's feeling of protective tenderness toward her frightened child" (87). An empathetic person can play the role of another indi- vidual, while a sympathetic person may or may not do so. Thompson (140) describes another dimension of empathy in the case of salesmen. Besides role playing, there is "role-taking,” that is, adopting the attitude or perspective of the other person. He explains that "not only must the salesman be empathetic, but he must have the ability to project this quality. He must project so that the prospect knows the salesman understands his situation and problem." 40 Cotrell and Dymond summarize the characteristics of empathetic individuals as: emotionally expressive, insightful, outgoing, optimistic, warm, interested in others, flexible, and having had satisfactory family relations in childhood (95). Empathy is a learned quality. It begins early in childhood through learning to take the role of another. As the child matures, he is introduced to the expectations of those around him. By this means he acquires a common set of meanings and definitions, which improves the effectiveness of the communication process (43). Most individuals use the quality of empathy without knowing it; knowingly, the individual can use the quality to his real advantage. Mayer and Greenberg (101), after seven years of field work, concluded that empathy and ego drive are the two most important traits of the salesman. Using this information they were able to make fairly good predictions about the subsequent performance of applicants for sales positions in three different industries. Rogers and Bhowmik (127) hypothesized that the source having a high degree of empathy will be positively associated with effective communication. Most of the studies support this hypothesis. Thompson (142) divides empathy into two main parts: task and social. Task empathy "refers to material that is specific in terms of the problem that faces the buyer, that is, the task that the buyer is involved in, at least, as it pertains to the product the salesman is selling." Social empathy is "the kind of things the salesman says and does that either leaves the respondent feeling positive, negative, or 41 neutral in terms of his emotional or personal needs. Such as need for intellectual discussion of the subject, recognition, superiority, and so on." Task empathy is much more important than social empathy in industrial buying situations. This dual classification of empathy seems to be pertinent to the type of interpersonal communication under investigation in this study; therefore, it has been adopted here. Measurement of Empathy Regarding the measurement of empathy, a wide variety of approaches has been used. Kurtz (89) summarizes these in four categories: (1) predictive, (2) situation, (3) perceived, and (4) rating. The predictive approach involves predicting the behavior of another (83; 10). In the situation approach, empathy is measured by the response of the subject to some standardized situation, for example, video tapes and role playing sessions (78). The perceived approach measures empathy by asking the subject to rate how empathetic he perceives another to be (15; Barret-Lennard labeled this "experi- enced" or "perceived" empathy). Finally, in the rating approach, trained judges rate the subjects on empathy (30; 146). All these methods have some serious drawbacks and have been criticized by many researchers. However, Kurtz (89) reports that client perceived empathy, based on the Barret-Lennard relationship inventory, is the best predictor of all indexes of counselling outcomes. 42 Planning and Preparation In supermarket chain buying each contact of a salesman with a buyer is a unique situation because the food industry operates in a highly competitive market, and the buying firms differ in terms of their objectives, marketing policies, size, markets in which they Operate, and so forth. Therefore, the salesman should have an objective for each sales call within the framework of his firm's marketing policies.5 After establishing his sales call objective, the salesman is ready to plan his sales call. Planning is referred to as the process of deciding in the present what to do in the future, or the process of thinking ahead to what must be done and why, when, where, and how it must be done (141). This means that a salesman must do a great deal of preparation and planning prior to the actual contact with the buyer. Although a great deal of work is required of the salesman, the chain's ability to buy in bulk (hence a large reward for salesmen) more than outweighs these efforts. Obviously, poor preparation and planning may result in sales being lost. The importance of a good sales presentation has been highlighted in the Chain Store Age (150) grocery buying survey based on a sample of 48 chains and wholesalers in all sections of the country. The survey represented 4,700 supermarkets with an annual sales volume of $12.2 billion: SThompson discusses planning and preparation as sales call objective. See Joseph W. Thompson, Selling; A Managerial and Behavioral Science Analysis, 2nd ed. (New York: McGraw Hill Book Company, 1973). 43 To determine what they think about how sales reps do their jobs, buyers were asked to rate salesman as excellent, good, fair or poor in six vital categories: preparation of sales presentation, knowledge of product, knowledge of pro- motions and terms, knowledge of current market, follow through at retail level, and follow up on complaints and problems. Buyers rated sales representatives good in the first three areas and fair in the other three. Overall, they felt that salesmen were strongest in their sales presentations. While there is no specific indication of the overall degree of satisfaction with sales presentations, buyers were more prone to identify the salesman's weak points rather than his strength. Of the companies responding to the survey, 69% made negative statements concerning weak points in the sales- man's presentation, 25% felt that they were strong in some areas, and 6% offered no opinion at all. Concerning weaknesses, 38% of the companies were uninformed about their operations and lacked knowledge of their distribution system. In addition, 13% of the companies felt that salesmen showed weak unwanted items, while another 13% said they showed too many items and made their presentation too long. Still another 10% felt that salesman did not do enough follow through work [pp. 54, 56]. Another Chain Store Age (145) study, a general merchandise survey of 70 chains and wholesalers in all sections of the country, representing 4,400 supermarkets with a combined annual sales volume of $945.5 million, produced similar results. In addition, the survey pointed out that presentation of too many items and too many lines or too long presentation with films and flip charts were criticized by some companies while others noted that too many salesmen think they have to start a presentation with chit-chat. "I want them to sell and run," said one buyer [p. 67]. Today's buyers are very much concerned with salesmen's presenta- tions because they do not want their valuable time wasted. A picture in a Chain Store Age article (145) vividly reflects this mood. The caption under a drawing of an owl reads: "You have 15 minutes, use it wisely!" 44 Two techniques seem to have eliminated, or at least minimized, those salesmen who are ill prepared or have nothing to sell as far as the chain is concerned: (1) the use of a third party for scheduling salesmen, and (2) an in-depth education program on the way the chain's buying system works (113). Levitt (93, 94), using an experimental design, investigated the effect of the company's image and the quality of sales presentation in obtaining a first product hearing (low risk decision). He concluded that the higher the risk in the purchase decision, the more likely it is that a good sales presentation will trigger a purchase. From the discussion it is clear that careful planning and prep- aration lead to a good sales presentation, and a good sales presentation (as perceived by the buyer) has a positive effect on the buyer with respect to the salesman's product offering. Therefore, the planning and preparation variable is an important one in the interpersonal communica- tion of the buyer-seller dyad and hence has been included in this study. Small Group Decision Making A group, by definition, involves interaction, performance (actions and reactions), and expectations. Informal structuring and the creation of interpersonal bonds occur in all groups after a certain period of interaction (65). In interacting, group members not only develop norms which define expected behavior, but also exert strong pressure upon each other to conform to the norms. Festinger (48) indicates that the more stable and cohesive the group, the more likely it is that conforming behavior will occur. When members do not conform 45 to the group norms, they are considered deviant, and problems occur because of the conflict thus engendered. Stogdill (137) has synthesized and explained some 800 research studies on individual behavior and group achievement. His theoretical model of organizational behavior is based on nine variables grouped into three classes: input, intervening, and output variables. The three input variables are: (1) member interaction, an action-reaction sequence in which the reaction of any member in a group is a response to the reaction of another member; (2) individual performance, one ele- ment of the action or reaction that constitutes the task-oriented work of an interaction system; and (3) individual expectation. or readiness for reinforcement. The three intervening variables are: (1) group structure, that is, the differential regularities of action and reaction exhibited in the positions in a system which is composed of two sub- systems, the position and role systems; (2) member satisfaction, or the sense of personal well-being one feels when one's goals or expecta- tions are being met; and (3) task-oriented work, composed of all the actions and reactions which maintain the structure and accomplish the purpose of the group. Finally, the three output variables (describing group achievement) are: (l) productivity, or the degree of change in expectancy values created by task-oriented work; (2) group responsive- ness (drive), which is freedom from restraint in action toward a goal; and (3) group integration (cohesiveness), or the ability of the group to maintain structure and function under stress, and meet the group's need for structural stability, coordination, unity, and loyalty. 46 Cyert and March (38) have developed four concepts which describe some of the dynamics of organizational decision making: (1) uncertaintygavoidance means that organizational members are motivated by a desire to reduce uncertainty; (2) problemistic search focuses on the organizational decision process; (3) organizational learning recognizes that organizations, like individuals, adapt to goals, attention rules, and search rules over time; and (4) guasi- resolution of conflict recognizes that latent conflict exists among goals in most organizations, and a number of mechanisms are used to reduce goal conflict. Webster and Wind (148) provide evidence that all four concepts discussed above are applicable to organizational buying behavior. To better understand buying, it is essential to recognize that different roles are played by the different organizational members in the buying decision process. Webster and Wind (148) have described five distinct roles played by the different organizational members and refer to them as "buying centers": (1) g§e5§_exert influence individ- ually or collectively; (2) influencers influence buying or usage decisions directly or indirectly; (3) ppye:§_select suppliers and arrange terms of purchase; (4) deciders possess formal or informal power to determine the final selection of suppliers; and (5) ggpe: keepers control the flow of information into the group. Sheth (132) has also described the influence of multiple buyers as a central component in his model of industrial buyer behavior. 47 This study is concerned with a specific type of group decision making, the committee. In a most simplified form, a committee is a group of individuals to whom some matter is relegated. Various defi- nitions suggest that a "committee is a special type of meeting, char- acterized by a limited membership, a specific task or goal, a designated leader, and an explicit or implicit plan of action" (4). It is these characteristics of group action that separate the committee from other organizational devices. The committee under investigation in this study is the buying committee, which is charged with the responsibility of selecting new products, promotional deals, special promotional programs, store displays, and so forth, on a centralized basis for the various stores of the supermarket chain. In the remainder of this section the literature on committees is reviewed. Specifically, the functions, advantages, disadvantages, group size, leadership, and membership, including conflict and cohesiveness among group members of the committee, are discussed. Functions of Committees The managerial functions of and the degree of authority to make decisions possessed by committees vary considerably and depend on the task and responsibility delegated to the committee. Such groups are generally established to achieve economy and efficiency within the enterprise. Healey (61) points out that the committees provide service, coordination, advice, and control to formal organization units. They do not create direct salable value, nor do they supervise Operative employ— ees who do create such value. Business executives have described the 48 functions of committees as: (l) exchanging views and information; (2) recommending action; (3) generating ideas; and (4) making policy decisions (36). Buying committees in supermarket chains do perform managerial functions and decisions. They are established as a part of the orga- nization structure, with specific responsibility and authority, and in that sense they are formal committees. Advantages of Committees Koontz and O'Donnell (85) have noted several advantages of committees. 1. Group deliberation and judgment is the most important reason for the use of committees. A group of people brings to bear on a problem a wider range of experience than a single person, a greater variety of opinion, a more thorough probing of the facts, and a more diverse training in specialized aspects. Sometimes the results obtained by group judgment are superior to those obtained by individual judgment. 2. Fear of authority, or fear of delegating too much authority to a single person, can be avoided by using a committee. In supermarket buying, the decisions to buy new products are made on a chain-wide basis by a centralized buying committee. 3. Representation of interested groups is more possible under a committee system. A recent Chain Store Age (150) grocery survey showed that many companies (40 percent) are increasing the represen— tation of store and department managers in their buying committees. Some (10 percent) even are including warehouse managers. 49 4. Coordination ofgplans and policies is enhanced by committees. Individual members are given a first-hand picture of overall plans and an opportunity to make suggestions to improve the plan on the spot. 5. Transmission of information to concerned individuals, simultaneously, is another advantage of a committee. 6. Consolidation of authority for decision making is easier through committees. 7. Motivation through participation, or wider participation in decision making, is another advantage. Persons who take part in planning a program or making a decision usually feel more enthusiastic in accepting and executing it. 8. Avoidance of action, or delay, can be one use to which committees are put. Disadvantages of Committees Koontz and O'Donnell (85) also have listed several disadvantages of committees. 1. High cost in time and money is a frequently voiced objection to committees. Since time costs money, meetings are seen as expensive. Tillman (144), however, reports that executives object less to scheduled committee activity than to the time actually spent in such meetings. 2. Indecision may result. The time required for thorough deliberation and discussion of peripheral issues and difficulty in 50 reaching agreement often result in adjournment without actions being taken or in redecision. 3. A tendency to be self-destructive stems from the fact that invariably one man emerges as the leader. When an individual becomes dominant, he in fact becomes the decision maker, and the role of other group members becomes one of follower or adviser. If the committee ceases to operate as a group of equals, the politics of the situation may lead to very bad recommendations or decisions. 4. Splittinggof responsibility means that authority is dispersed throughout the group, and the individual member does not feel the same degree of responsibility as if he personally were charged with the same task. No one logically feels accountable for the action of the group or feels personally responsible for his action within it. 5. Minority tyranny results from the fact that committees generally tend to seek unanimous or near unanimous conclusions or decisions; thus, minority members have a strong position. By their insistence upon acceptance of their view, or of a compromise position, they exercise an unwarranted tyranny over the majority. Committee Size The size of a committee, as a rule, should depend on the breadth of expertness required for the task to be accomplished. At the same time, size should be limited to avoid wasting time or fostering indecision. Most classical literature suggests that the typical commit- tee is (and should be) relatively small (50), and the size referred to varies from three to twelve, with most writers recommending four to six 51 members. Berwitz (23) recommends seven members, Newman (115) suggests three to four, R. C. Davis (40) endorses three to nine members, Kriesberg (88) suggests five to six, and Keith Davis (39) recommends five. Tillman (144), in a survey of 1,658 committees, showed an average membership of eight, but when asked for their preference, the 79 percent who responded to the survey suggested an ideal committee size of 4.6 members. In meetings with a fixed time allotment, as group size increases the opportunity for each member to communicate is reduced, and the type of communication becomes different among group members (13; 136). Increasing size also seems to limit the extent to which individuals want to communicate. This is evident in a study by Gibb (51), which found that as group size increases, a steadily increasing proportion of group members report feelings of threat and less will- ingness to initiate contributions. A decrease in group size also has dysfunctional effects. Slater (134) reported that small groups of two, three, or four were complementary, but felt that the members engaged in superficial dis- cussion and avoided controversial subjects. The analysis of small groups suggests that small group members are generally too tense, passive, tactful, constrained to work together in a satisfying manner, and afraid of alienating others (50). Bales and Borgatta (12), in a study of groups of two, supported these findings. Back (11), studying two-man groups which differed in cohesiveness, 52 observed that more influence was exerted in high cohesive than in low cohesive groups. Members of the former felt that more influence was exerted in high cohesive than in low cohesive groups, and that more influence was exerted upon them. Members made more effort to agree and made more changes toward agreement in high cohesive groups. There are problems in groups larger than two also. Groups of three are plagued with the problem of an overpowerful majority, since two members can form a coalition against the unsupported third (50). Four-member groups, when split into two opposing groups of two, lead to higher rates of disagreement and antagonism than do odd-numbered groups (12). Filley (49) indicates that the ideal committee size is five, when the five members possess adequate skills and knowledge to deal with problems facing the committee. With regard to supermarket buying committees, Leed and German (92) report a membership of four to six individuals is the norm. Committee Leadership If the committee is to be successful, it is very important that there be a chairman who can direct activity and guide thinking. The importance of chairman control in committee action has been demonstrated in several studies (129; 18; 131). A great deal of the literature deals with two types of small group needs: task and social. Apparently a good leader must satisfy both these needs. Benne and Sheats (16) define the two roles of a leader as: (l) the task role, related to the direct accomplishment of group purpose, and (2) group-building and maintenance roles, which 53 involve group integration, harmonizing, compromising, and conflict reduction. Many other studies have concurred that these are the two main roles of the leader, although they use different terminology. The combination of these two leadership roles is suggested in many studies, and apparently this is the most desirable situation. For example, Filley and House (50) investigated and supported by empirical evidence concerning task-oriented groups the following proposition: "Efficient and effective committee operation requires a leader who is directive and task oriented in his behavior." Committee Membership For the committee to be effective, members should be both functionally (possessing technical knowledge) and personally (possessing analytical and social skills) qualified for the task. Members may be appointed by a superior, selected formally or informally by committee members, appointed by formal or informal election processes, predeter- mined by office or job contact, or may volunteer. The attractiveness of a committee is a function of the needs of the individual and the properties of the group (31; 96). Success depends to a great degree on the cohesiveness of the group because a cohesive group is cooperative, and a cooperative group is productive. This statement is supported by many studies which have shown that "group members who have been motivated to cooperate show positive responses to each other, are more favorable in their perceptions, are more involved in the task, and have greater satisfaction with the task” (60). Many other studies suggest that groups whose members 54 compete privately or otherwise seek to fulfill personal rather than group needs (57; 53; 153). Filley and House (50) show general, if not consistent, support for the following proposition: "Integrated, cooperative committee membership is more effective in meeting committee goals than nonintegrated, competitive membership." Therefore, the committee Operation can probably be enhanced by (l) selecting members whose personal needs are not so intense and (2) directions to the group which strengthen motivations of a cooperative nature (34). The membership of buying committees in supermarket chains varies from one chain to another. Membership may consist of any combination of buyers, merchandisers, corporate/division executives, operation executives, advertising managers, store supervisors, ware— house managers, and others. Members generally are appointed by supervisors. A Chain Store Age (150) grocery buying survey of 48 chains and wholesalers reported the following in response to this question: "What executives sit on buying committees?" Percentage Buyers 93 Merchandisers 57 Corporate/Division Executives 53 Store/Department Managers 40 Sales/Marketing Executives 30 Operations Executives 20 Advertising Managers 13 Store Supervisors 10 Warehouse Managers 10 All Others 20 From the above responses it is clear that buyers are over- whelmingly represented on buying committees. As indicated, other 55 executives significantly involved in the committees are merchandisers and corporate and division executives. The concern of many companies about how store level people view buying decisions is reflected in the use Of store and department managers in 40 percent Of the companies. CHAPTER FOUR RESEARCH QUESTIONS AND THE SCOPE OF RESEARCH As defined in Chapter One, the objective of this study is to examine the decision-making process for the acceptance or rejection Of new products by a supermarket chain which uses a buying committee. In light Of this Objective and the discussion in Chapters Two and Three, several research questions can be formulated. These are presented in the first section of this chapter. In the second section, the scope of the research is defined by narrowing down the research questions so as to make the research Operational. Overview As pointed out in Chapter One, the role Of the supermarket chain buyer is changing. He is becoming more Of a specialist. He has the responsibility of listening to presentations by the salesman on new products in his assigned area. He eliminates the "Obvious rejects” and presents all the other products to the buying committee, which generally meets once a week. The buying committee listens to the buyer's recommendations and may ask questions about various aspects of the new product and the manufacturer's planned promotions, introductory allowances, price structure, deals, test market results, and distri- bution. The final buying decision is made by the committee. 56 57 More and more supermarket chains are now using buying committees. According to a Chain Store Age (150) grocery buying sample survey, 63 percent of the nation's retailers are currently using a buying com- mittee, and 93 percent Of the companies reported that buyers are involved in the buying decision. Research Questions The research questions are divided into three groups: (1) salesman's qualities and new product decisions; (2) decision making in buying committees; and (3) new product decision criteria. Each of these is discussed in turn. Salesman's Qualities and New Product Decisions The supermarket chain buyer is becoming more of a specialist because he has more education; has more information at his finger tips, thanks to data processing experts; is more up to date; and can exercise tighter control. This change in the buying situation places heavy demands on a salesman trying to sell his product. The change in the buyer's role has changed the salesman's role considerably. The salesman no longer comes directly in contact with the decision maker, in this case the buying committee, which has the responsibility of making the final decision on the new product. Contact with the committee is through the buyer, who acts as a "gatekeeper" or link between the two. The salesman, therefore, must do a good job of educating the buyer, who, in turn, educates the members of the buying committee. The 58 question is raised of possible misrepresentation Of information by the salesman and possible loss of information, due to the buyer's personal bias, before the buyer makes the presentation to the buying committee. Since the buyer is the salesman's representative in the committee (the decision-making group), the salesman must provide the right kind of information to the buyer on all aspects Of his product. In other words, his sales presentation should have a positive effect on the buyer's attitude. It is reasonable to expect that a good salesman's performance would lead to a favorable recommendation on the product by the buyer to the buying committee. The question then arises: 1. Does a good performance by the salesman result in acceptance of his product by the buying committee? The answer to this question is not known, although intuitively one might expect it to be "yes." Several factors must be considered. First, the decision is not made by the buyer, it is made by the buying committee. Second, the buyer does his own research on the product as well as on related products to evaluate his various alternatives. Third, the new product may not meet one or more important decision- making criteria of the buying committee. The first factor has already been discussed, but the second and third factors have some interesting implications. (1) If there is no correlation between the salesman's perfor- mance and the buyer's recommendation and/or the buying committee's 59 decision, then a simple "order taker" type Of salesman would be adequate for the job. This certainly seems unlikely to be true. (2) If the salesman is fully cognizant of the decision-making criteria used by the buying committee, it will help him better plan and prepare his sales presentation. (3) If the salesman knows that his product does not meet one or more important decision-making criteria of the buying committee, and also knows that his product will be rejected on that basis, he need not present his product to the buyer, thus saving both the buyer and the salesman a great deal of time and effort. (4) If the salesman's performance is good and the product is still rejected, does it mean there is no correlation between the salesman's performance and the buying decision? Or, does it mean that the reasons for the rejection of the product by the buying committee are beyond the control of the salesman? In order to be able to educate the buyer, the salesman should be well informed on all aspects Of his and his competitors' product. He needs to be an "expert." Since the buyer is responsible for hundreds of items in his area, the salesman can make the buyer's job easier by understanding the way he does his job and the evaluation criteria he uses. In other words, he should have high “task empathy." Due to the limited time allotment in which the salesman must make his presentation (normally fifteen minutes), he must plan and prepare his presentation. One of the most common complaints from buyers is that salesmen do not come prepared for their appointments. 60 As noted in Chapter Three, planning and preparation, task empathy, and expertness appear to be the most important qualities Of the salesman as perceived by the buyer. This raises another important question: 2. Is there a positive relationship between the salesman's qualities (preparation and planning, task empathy, and expertness) and the salesman's performance? If there is a high positive correlation between the salesman's qualities (preparation and planning, task empathy, expertness) and salesman's performance, and also a high positive correlation between the salesman's performance and the buyer's recommendation to buy a new product, then it may be concluded that the salesman's preparation and planning are positively related to the buyer's recommendation to buy. Salesman's performance is, therefore, a moderating variable between the salesman's qualities and the buyer's recommendation on the salesman's product to the buying committee. Decision Making in BuyinggCommittees According to Mueller and Graf (110), "in the nation's chain and independent supermarkets, two-thirds of the new items accepted at the warehouse are ordered on the individual store manager's own decision, and only one-third represent forced distribution." Recent studies indi- cate that new products are forced on the stores unless the movement in a particular store is very small or the new products are taken "on a limited store basis.“ 61 There is some question as to whether the chain buying committee is really the decisive factor regarding which new products enter the chain's assortment. According to Borden (26), the responsible buyer's inclination or recommendation is highly important to and influential in the committee decision. He points out that the buyer is the key because he controls what is communicated to the buying committee, thus exerting influence on the buying decision. The committee, in turn, exerts some important indirect effect on the buyer's evaluative criteria and decision—making process. The committee also serves as a "buffer“ between the buyer and the salesman because it offers a means of resisting sales efforts and is a good excuse for avoiding involvement and commitment with the salesman. As noted previously, the size of buying committees varies, but the two-member committee consisting of a buyer and merchandiser (generally at the executive level) is becoming more common. This type is referred to here as a “one-to-one" buying committee and is claimed to be more efficient than one with more than two members, but there is no research to support this claim. The advantages and disadvantages of buying committees in general and the buyer-merchandiser type in particular were discussed in Chapter One. In view of the above discussion, the following questions need to be answered: 3. How influential is the buyer in the selection of new products in chains using buying committees? 4. How efficient is a "one-tO-one" buying committee compared to the buying committee composed of more than two members? 62 Question number four is a very broad one and must be narrowed down in order for the research to be Operational. New Product Decision Criteria Very few studies have investigated decision-making criteria and their importance in the selection of new products for supermarket chains. The A. C. Nielson Company (110) conducted a study in which store managers were asked to rank on a three-point scale the importance of different elements in swaying their decision to accept a new item. The final ranking showed: Evidence of consumer acceptance Advertising/promotion Introductory terms and allowances Why item was developed Merchandising recommendations —‘-—'l\)l\)N WOONUl The first three items have been reported as the most important criteria in other studies also (26, 105). Graf (54) asked buyers to rate the criteria for selecting new products on a scale of zero to three. The results were as follows: Advertising/promotion program The item description Evidence of consumer acceptance Introductory terms and allowances Reasons for the item development HNNNN ~500me In a recent doctoral study, Sweitzer (139) asked seven different buyers in a medium-sized supermarket chain in the Midwest to rate the importance Of eighteen different decision-making criteria for selecting a new product. Measurement was on a nine-point scale ranging from unimportant to very important. 63 Sweitzer simply reported the data without any analysis. Although the sample size was too small to permit conclusions to be drawn, if the means of each criterion are calculated and the ranks are determined on the basis of their mean value, the following top five criteria are obtained:1 Profit potential Of the product Potential value to consumer Amount of advertising/promotion Timing of manufacturer's promotion Performance requirements associated with promotional deals. Kolter (84) points out that whatever criteria are used in deliberations, they are rarely reduced to explicit, written directives or used with formal weighting by the buyer. He suggests that the seller stands a better chance if he can support good consumer acceptance, has a well-designed and extensive introductory advertising and promotions plan, and offers deals as incentives to the retailer. The studies mentioned above are too few in number and show too great a difference in the decision-making criteria to permit any definite conclusions. Moreover, the methodology used was to ask the various entities (buyer, buying committees, store managers) to rate the importance of different criteria in selecting new products for the supermarket chain. In most Of the studies it is not clear how the researchers arrived at the different decision-making criteria, or whether the individuals rating these criteria had any option to add any Of their own which they felt to be important. lFor calculations, see Appendix D. 64 Sweitzer's (139) data were further analyzed by this researcher to find if there were any significant differences in the importance ratings Of the various criteria by different buyers. By using a Friedman Test (37), the hypothesis that there are significant differ- ences in the importance ratings of the various criteria by different buyers was accepted at a==.01. The above hypothesis was also supported by the Dual Analysis of Variance (90). Since no conclusions can be drawn on the basis of the results of the above studies with respect to the decision-making criteria, and their degree Of importance, used in the selection of new products by the supermarket chains, the following questions remain unanswered: 5. What are the major criteria used in the selection of new products? 6. Are there significant differences in the importance ratings of the new product decision-making criteria of different buyers? It is important for all concerned--the manufacturer, the salesman, and the chain--to know the decision-making criteria used by the supermarket chains in the selection of new products. It will help the manufacturer to develop new products and train salesmen to be more effective. With such knowledge, salesmen could better plan their presentation of new products and provide more accurate, vital feedback to the manufacturer. The chains could benefit directly and indirectly. Indirectly, better informed salesmen and manufacturers would be beneficial. Directly, chains might benefit by using computers to reduce the number of new items, thus reducing the waste Of management time, by screening out "no chance" products prior to the presentation by 65 the salesman. One such effort has been made by Grashof (55). He used 13 variables (product decision criteria) in three different models to Obtain "product scores" which formed the basis for assigning new product offerings to "no chance" and "consider further" categories. The vari- ables used were copied from the "Product Presentation Sheet," which salesmen must complete prior to product presentation. Grashof con- cluded that management time could be reduced considerably with his procedure but warned that a larger data base is needed to validate the results. The Scope Of Research Of the six research questions raised in the previous section, some are straightforward, and others must be narrowed down in order for the research to be Operational. Before doing so, however, it would be appropriate to discuss the uniqueness of this study. A disguised method was used for gathering most of the data; the individuals involved were not aware of the intentions Of the researcher. This was accomplished by analyzing "dialogues“ between the various entities instead of asking them direct questions. This technique is somewhat similar to the Mark- Cell Analysis described by Thompson (141). New product presentations Of salesmen to buyers were taped, and a record of the new products presented was kept. The presentations Of these new products by the buyers to the merchandiser were then taped. Both the buyer-salesman and buyer-merchandiser tapes were later transcribed by the researcher for the purpose of "dialogue analysis." Selected dialogues from the transcriptions are included in Appendices B and C. 66 The researcher selected this method because it seems to ensure unbiased answers. However, the presence of the researcher might have introduced response bias. This is the first time this approach has been used in isolating new product decision-making criteria and in studying the influence of the buyer in the selection of new products in the supermarket chain. Because of the unique methodology, it was feasible to collect data from only one supermarket chain for this study. This chain used a two-man buying committee consisting of a buyer and a merchandiser, defined as a "one-tO-One" buying committee. Salesman's Qualities and New Product Decisions The first question raised in the previous section was: "Does a good performance by the salesman result in acceptance Of his product by the buying committee?" It is more appropriately answered by split- ting it into two parts. The first deals with the relationship between the salesman's performance and the buyer's recommendation to the buying committee. The second deals with the extent of buyer influence on the buying committee in the selection Of new products, which is the same as the third question in the previous section. Therefore, the research question to be answered is: 1. Does an above average or better salesman's perfor- mance result in a favorable recommendation by the buyer to the buying committee? The answer is Obtained by cross-tabulating data on the salesman's performance and the buyer's recommendations on new products to the buying committee. Since the buyer's recommendation was involved, 67 he was asked to evaluate the salesman's performance. Also it was important that the buyer evaluate each salesman on a particular presentation; obviously, the results would not be meaningful if the buyer's evaluation took into consideration earlier presentations on other products. To overcome this difficulty each salesman's per- formance was evaluated by both the researcher and the buyer based on that particular sales presentation. These evaluations thus formed matched pairs; when they were statistically tested, a significant difference in the researcher's and buyer's evaluations of the salesman's performances would mean that the results would be invalidated. The reasons for rejecting new products presented by the salesmen rated above average or better on the performance scale are discussed in Chapter Seven. These reasons were extracted from the buyer-merchandiser interactions. The second question was: I'Is there a positive relationship between the salesman's qualities and the salesman's performance?" It has been modified because of the interrelationship between the sales- man's qualities. All three qualities, namely, planning and preparation, task empathy, and expertness, are related to a salesman's performance. Therefore, the question to be answered is: 2. Are there significant positive relationships between the salesman's planning and preparation, salesman's task empathy, salesman's expertness, and salesman's performance? The buyers were asked to evaluate the salesman's planning and Preparation, task empathy, expertness, and performance. 68 Decision Making in Buying_Committees The third question raised previously is slightly modified and restated below: 3. How influential is the buyer in the selection of new products in chains using a buyer-merchandiser buying committee? This question is answered by finding agreement between the buyer's recommendation and the merchandiser's decision in the selection Of new products. A high degree of agreement between the two would mean that the buyer is very influential in new product selection. The buyer's recommendations and the merchandiser's decisions to buy were extracted by the researcher from the buying committee transcriptions. The fourth question was: “How efficient is a 'one-tO-one' buying committee compared to the buying committee composed of more than two members?" It was necessary to modify this question because it is too broad. The question as stated can be answered by comparing the efficiency of "one-to—one" buying committees with others composed of three, four, five, and more members. Further insight can be gained by comparing the efficiency Of committees consisting of the same number of members but differing in types of membership. In this study, the "one-tO-One" buying committee, which is claimed to be more efficient than those with more than two members, was chosen as the focus. A problem in answering this question is defining the word efficient. In this study the buying committee is considered "efficient" if the percentage of decisions deferred by it is very low. A low percentage would mean that the committee made most of its decisions either in 69 favor of or against a new product, rather than postpone the decision. Therefore, the question to be answered is: 4. What percentage of decisions is made and what percentage Of decisions is deferred in a buyer- merchandiser buying committee? The answer is obtained by simply tabulating the number of decisions on new products made and deferred by the buying committee. New Product Decision Criteria The fifth question raised previously is straightforward and is restated below: 5. What are the major criteria used in the selection of new products? The list of major criteria actually used in the decision- making process was prepared from the tape transcription of buying committee meetings. The sixth question raised in the previous section also is straightforward: 6. Are there significant differences in the importance ratings of the new product decision-making criteria Of different buyers? TO answer this question the buyers were asked separately to indicate the importance of each criterion on the list prepared from the buying committee transcripts. They then were asked to rank all the decision-making criteria, and they were given an opportunity to add any which they felt were important. (See Appendix F.) 70 Summary Of Research Questions This research attempts to discuss the following six questions: 1. Does an above average or better salesman's per- formance result in a favorable recommendation by the buyer to the buying committee? Are there significant, positive relationships between the salesman's planning and preparation, salesman's task empathy, salesman's expertness, and salesman's performance? How influential is the buyer in the selection of new products in chains using a buyer-merchandiser buying committee? What percentage of decisions is made and what percentage of decisions is deferred in a buyer- merchandiser committee? What are the major criteria used in the selection of new products? . Are there significant differences in the importance ratings Of the new product decision-making criteria Of different buyers? CHAPTER FIVE RESEARCH HYPOTHESES In the previous chapter several broad questions were raised and then were narrowed down in order to make the research Operational. In this chapter the research hypotheses to answer the questions raised in the previous chapter are proposed. Some questions raised in the previous chapter are rather direct and are answered by simply tabulating the data. However, others hypoth- esize a relationship among the variables which must be tested by using statistical techniques. The hypothesis is either accepted or rejected on the basis Of pre-established criteria, which generally involves a notion of probability. Four hypotheses are proposed in this study. These are grouped under three headings, as discussed in the previous chapter, and are shown graphically in Figure 3. Salesman's Qualities and New Product Decisions The following two hypotheses pertaining to a salesman's qualities and the buyer's recommendation to the buying committee are proposed. Hypothesis 1 There is a significant positive correlation between the salesman's (l) planning and preparation and overall performance, (2) task empathy and overall performance, and (3) expertness and overall performance. 71 72 cowmeomo m.mmgpwsso mcwxzm a .mqwcmcowpmpmc umNVmwcuoaxz .m mgamwa __‘ _ r mmuuweeou mcwxam op cowumucmseoomm m_cm»:m «sumac me» me @mawmosmm moo mmmcucmaxm mucmELoecma m.cmsmmpom xspmaEm xmm» cowumcmamca use mcwccmpa «sumac ox» me concussed we» ”mmwuw_m:c m.:msmm_mm 73 In the buyer-seller dyad, three qualities Of the salesman, namely, his credibility, his empathy, and his planning and preparation, as perceived by the buyer, are believed to be positively associated with the salesman's performance (as evaluated by the buyer). As discussed earlier, a salesman's planning and preparation, his expertness (compo- nent of source credibility), and task empathy (component of empathy) are particularly important to the industrial buyer. He pays more attention to the salesman who is rated high in these qualities. Since a well-prepared salesman is generally ranked high on expertness and task empathy, a salesman's performance could be measured by any of the three qualities. This interrelationship among the qualities (independent variables) is referred to as "auto correlation" (90). An independent variable is one which is used to predict another, or dependent, variable, which somehow varies with it. In this case a salesman's qualities are independent variables, while his performance is a dependent variable. Because auto correlation exists, the correlation coefficients between the salesman's performance and each of the salesman's qualities are determined. This process reveals which is the most important predictor Of the salesman's performance. Hypothesis 2 There is a positive relationship between the salesman's performance as perceived by the buyer and the buyer's recommendation to the buying committee to buy the new product. Research supports the contention that the respondent pays more attention to a source which is high in credibility. More attention by 74 the respondent could produce a favorable attitude toward the source and the subject (72). Task empathy and planning and preparation are believed to have similar effects. In this study the salesman's per- formance as perceived by the buyer is used as a moderating variable between the salesman's qualities and the buyer's recommendation to the buying committee on the product presented by the salesman. This hypothesis follows from hypothesis 1. A buyer's favorable attitude toward the salesman's product would be reflected in the positive recommendation (to buy) on the part of the buyer to the buying committee. The degree of persuasion by the buyer needed to convince the buying committee to accept his recommenda- tion depends on the strength and valence of the buyer's attitude, which in turn is believed to be affected by the salesman's performance. Therefore, it is reasonable to expect that a higher salesman's per- formance is related to "buy" recommendations by the buyer. Decision Making in Buying Committees It is reasonable to expect that the buyer is influential in the selection of new products. If this fact is established, and if the first two hypotheses are accepted, the salesman's qualities can be related to new product selection. Therefore, the following hypothesis is proposed: Hypothesis 3 There is a positive relationship between the bu er's recommendation to the buying committee and the uying committee's decision to buy the new product. 75 The "one-to-one" buying committee is essentially a "buyer-merchandiser" dyad. Social influence, therefore, takes place. Kelman (80, 81) suggests three distinct types of social influence: compliance, identification, and internalization. ppm; pliance occurs when one person accepts the influence Of the other because he sees this as a way of achieving a desired response from the other (he may or may not believe in the source). Identification occurs when an individual is influenced by the communication because of a role relationship with the other person that forms a part of his self-image. Internalization occurs when one person accepts the influ- ence Of the other because the induced behavior is congruent with his value system. All three influence processes are operative in the buying committee decision-making process. Some studies support the above hypothesis. Borden (26) reported that the buyer's inclination or recommendation was highly important to and influential on the committee decision. A high degree of agreement between the buyer and the merchandiser is to be expected because Of the social influence between the two. New Product Decision Criteria It is important for both the chains and the manufacturers to know whether all buyers attach equal importance to the various decision-making criteria used in the selection of new products. This information is useful to the chains because if all buyers do not attach approximately the same importance to the decision-making criteria, chains should find out why. It could be due to the differences in 76 buyer's personalities, in product categories, or simply ineffective communication. The manufacturers would find such knowledge useful because it could help them in developing and marketing new products; the salesman also would be assisted in presenting his product. In view of the above, the following hypothesis is proposed: Hypothesis 4 There are no significant differences in the importance ratings Of the new product decision-making criteria of different buyers. Only a few studies indicate that there are differences between buyers with respect to the importance of new product selection criteria (54, 110, 139). The hypothesis presented here contradicts existing research because the researcher believes that the differences in past results are due to the methodology used. Two possible reasons may explain the differences in previous studies: (1) the use Of different entities, such as buyers, store managers, and merchandisers, has failed to pinpoint who the decision maker really is, and (2) the data in most Of these studies were collected through mail questionnaires. As noted earlier, the methodology used in this study is unique. The criteria actually used by the buying committee were isolated from the actual dialogues between the members during the decision-making process. The buyers then were asked to rank and rate these criteria. If the fourth hypothesis is accepted, it would suggest that prior studies either did not use the correct entities or the correct cri- teria. If the hypothesis is rejected, it may be concluded that the differences in buyers' ratings are either due to respondents' person- ality characteristics or to the different categories of the product involved. CHAPTER SIX METHODOLOGY This chapter is divided into five major sections. The first deals with the source of data, which includes the background and organizational set—up Of the supermarket chain studied. The research instruments used in this study are detailed in the second section, and the third section deals with the definitions of new products. Section four outlines the data collection procedure, and the statistical tests used in this study are discussed in the last section. Source Of Data Research was conducted at a midwestern supermarket chain based in Detroit, Michigan. Its background and organizational set-up are discussed below. Supermarket Background The supermarket chain studied operates approximately 42 stores with annual sales totaling over $200 million.1 The chain's performance has been well above average in the past several years. The firm's 1The supermarket background data is taken from J. W. Thompson, Selling: A Managerial and Behavioral Science Analysis, 2nd ed. (New York: McGraw Hill, 1973), p. 56. Also see J. W. Thompson, CASE 1000, Graduate College Of Business, Michigan State University, 1974 (unpub- lished), included by the permission Of the author. 77 78 research department, devoted to studying consumers needs, has analyzed the market in terms of population, ethnic groups, age, family, and income. Research has specifically determined what the actual or potential customers want from the ideal supermarket. As a result, over the years this supermarket chain has changed its product mix, pricing structure, promotional activities, involvement in community affairs, and the environment (when possible and practical) in each of the supermarkets (for example, kinds of aisles and displays). The development Of a full-scale, internal public relations program has caused employees to view themselves as members Of the organization. Because of their customer orientation, the management claims that their clientele views the various stores as its own--the place at which it wants to shop. Organizational Set-Up The salesman's contact in the supermarket chain is a buyer. Each salesman must make an appointment in advance, explaining briefly the product he would like to present. If the buyer is interested, he will grant an interview which generally runs for 15 minutes, unless a longer appointment is arranged. If the salesman's new product Offerings fall under the responsibility of different buyers, he must make separate appointments with each one. The buyer listens to sales presentations only on Wednesday and Thursday between 9:15 and 11:45 a.m. The sales- man is required to fill out a "New Product Information and Buyer's Approval Form" for each of the new products prior to the sales pre- sentation. This form includes a great deal of information, such as 79 packaging, pricing, suggested retail price, percentage profit, guarantees, allowances, producer's advertising, merchandising displays and sales aids, major retailers stocking items, shipping information, and store handling. (A copy Of the "New Product Information and Approval Form" appears in Appendix G.) The buyer analyzes pertinent information on the new products from various external and internal sources. The information sheet, salesman's presentation, SAMI, and company records are the major sources. He evaluates the new product along with other alternatives and makes his presentation to the merchandiser, once a week, generally on Friday. The buyer recommends for or against the new product, and the merchandiser has the overall responsibility Of making the buying decision. The chain claims that the two-man committee, described here as the "one-to-one" or buyer-merchandiser buying committee, is much more efficient and practical than other forms. The committee meeting gener- ally lasts from 30 to 90 minutes. The committee used by this chain consists of a buyer and a merchandiser. These latter also have the title Of vice president or director of a department and are responsible for all the items in their respective areas. Each merchandiser is supported by several buyers. The chain has six merchandisers, nine buyers, and a manager of consumer affairs. Product categories are equally divided among the buyers. Three merchandisers who work on their own and have no buyer reporting to them are called buyer/merchandiser. These three are excluded from the research because they deal directly with the salesman and make their own buying decisions. 80 The merchandisers report to the vice president and director of marketing, who in turn reports to the president of the company. Research Instruments To evaluate the qualities Of the salesman as perceived by the buyer, a "Salesman's Evaluation Form" was prepared. Each buyer was requested to fill out this form immediately following the sales pres- entation and departure of the salesman. It was important that this be done while the sales presentation was fresh in the buyer's mind. Due to the buyer's tight schedule and the need to evaluate the salesman's qualities immediately following his departure, it was very important that the Salesman's Evaluation Form be simple, easily understood, and brief. Sweitzer's (139) questionnaire, used in a similar study, was helpful in the preparation of the form. Thirteen statements were prepared to measure the various qualities of the salesman as perceived by the buyer. The buyer was asked to indicate his agreement or disagreement with these statements by circling one of the numbers on the following Likert-type scale (55), l 2 3 4 5 Strongly Agree Agree Indifferent Disagree Strongly Disagree (SA) (A) (I) (0) (SD) A five-point scale was chosen because a scale with fewer choices does not allow the respondent enough flexibility to discriminate among the stimuli. Scales with seven or more points may provide too many choices; respondents have difficulty in discriminating among 81 stimuli and hence are slow to complete questionnaires. A six-point scale does not allow the respondent to make a neutral choice (152). With the exception of one quality, trustworthiness, at least two statements were selected tO measure each quality of the salesman. An average quality score was then computed for further analysis. The above scale was treated as an interval level scale and was used only for the purpose of computing average quality scores. The statements in the Salesman's Evaluation Form were pre- tested prior to finalization. Some minor adjustment in langauge was made to make the statements more explicit. One important modification was the introduction of a few negative statements; in the pretest, it was revealed that, after evaluating a couple Of salesmen, buyers were completing the evaluation form too rapidly. By introducing negative statements, respondents were forced tO read each statement carefully before answering. In the final analysis the order Of numbers for these negative statements was reversed in order to maintain a con- sistent direction, that is, l and 5 were interchanged, 2 and 4 were interchanged, while 3 remained unchanged. Another item which was introduced in the evaluation form as a result Of pretesting was "follow through" of the order by the salesman. A couple of buyers felt that it was very important and should be included in the salesman's evaluation. This item was included as the fourteenth statement in the evaluation form. This statement has no real bearing on this study because it pertains to the previous contacts of the salesmen with the buyers. 82 Salesman's Evaluation Form The statements used to evaluate the qualities of the salesman are presented below. Perceived Task Empathy 1. He fully understands the criteria that you use to make purchase decision. 2. He seems to fully understand if his product will meet your chain's (name of chain) needs. 3. He does pgt_seem to understand the way you do your job as a buyer.* Perceived Social Empathy 4. He is very courteous and considerate. 5. He listens very carefully. 6. He does ppt_allow you to ask questions and venture opinions.* Perceived Expertness 7. He seems to be very well informed on all aspects of this product. 8. He seems to be unqualified for his job.* Perceived Trustworthiness 9. He seems to be a just and fair person. Perceived Dynamism 10. He is aggressive and forceful. 11. He is active and energetic. Perceived Preparation and Planning 12. He seems to have done a great deal Of preparation for this appointment. 13. His sales presentation was very well planned. *Negative statements. 83 Followap 14. He does gpt_follow through the order.* Salesman's Performance One Of the most important variables in this study is the salesman's overall performance. This was measured by asking the buyer to rate performance on a seven-point semantic differential-type scale ranging from very poor to excellent. In fact, it is an unbalanced bipolar scale with seven (assumed) equal intervals. It is unbalanced because it does not have an equal number Of cues on either side of the indifferent cue (73). The following scale was used. 1_ 2 3 4 5 6 7 Below Above Good Average Average Excellent Very Poor Poor Average The semantic differential scale was chosen because it enabled the researcher to probe into both direction (poor or good) and intensity (how poor or how good) Of the buyer's attitude toward the salesman's performance (56).2 The following statement was used for the evaluation Of the salesman's performance: 15. How would you rate the overall performance of the salesman you have just seen? A copy of the Salesman's Evaluation Form appears in Appendix A. *Negative statement. 2For more details on semantic differential scales, see the original work of Osgood and his associates (120). 84 New Products Definition TO study the decision-making process for new products it is necessary to define innovation precisely. Over 51 different concepts of innovation appear in the literature. These vary widely and include such key phrases as "new to potential innovator"; "new because it is qualitatively different from existing forms"; "new because of signif- icant effect on economy"; "product that has recently become available in the market"; "presence of substantial technological changes"; and "new features in the annual model change“ (43, pp. 581-82). An impor- tant question here is: How "different" does the new product have to be, from the existing product, to be considered "new"? Kotler (84) considers as new those products which are "new to the firm" even though they have been in existence for some time. This definition covers a wide range and includes original products, major modifications of existing ones, duplications of competitor's products, and product line acquisition, all of which involve assimilation of something “new" into the product mix of the company (84, pp. 464-65). This definition does not include the risk element. Several other efforts have been made to classify innovations in different categories. One such system, suggested by Robertson (124), is based on the impact Of the innovation on the social structure accept- ing the innovation. He distinguishes three categories: (1) continuous jppgygtjgpr—least disruptive influence on established patterns; altera- tion of product is involved (for example, flouride toothpaste); (2) dynamically continuous innovation-~more disruptive effects than a 85 continuous innovation; still does not alter established pattern (for example, electric toothbrushes); and (3) discontinuous innovation--most disruptive; establishment of new behavior (for example, television, computers). Another threefold classification system is proposed by Howard and Sheth (72): (1) major innovation--new brand representing a new product class; (2) normal innovation--new brand in an existing product class; and (3) minor innovation--modification of an existing product (72, p. 280). This later classification is precise and clear and portrays actual market conditions. In this research the product is considered new if it is not presently carried by the chain, which is the criterion of the chain under investigation, and is relatively new to the market in which the chain Operates. The researcher concedes that this is a somewhat limited definition but feels it is adequate for this study. Special promotions and special deals from the supplier and close-out products do not constitute new products, even though they may affect the marketing mix of the chain considerably. Collection Of Data Data were collected from three major sources: (1) buyer- salesman interaction and Salesman's Evaluation Form; (2) buying committee interactions; and (3) buyers' rating of decision-making criteria. 86 Buyer-Salesman Interactions and Salesman's Evaluation Form A convenience sample of over 50 salesmen presenting new products was selected. Presentations were taped in the presence Of the researcher. Each salesman Offered at least one new product, sometimes more. A record of these products was kept by the researcher, and buyers' comments after the departure of the salesman, if any, were recorded. In analyzing the data, the name of the firm, salesman, and brand were replaced by arbitrary symbols to protect the proprietary information involved. After each sales presentation the buyer was asked to evaluate the salesman On various qualities by filling out the Salesman's Evalu- ation Form. The form was carefully explained to each buyer in advance. The researcher also evaluated the salesman at the same time. The buyer was cautioned to rate only the sales presentation just given and disregard previous presentations. Buying Committee Interactions At the weekly buying committee meeting the researcher kept track of the new products presented by the salesmen to the buyers. The researcher then taped the buyer's presentation to the merchandiser on those new products which had been taped during the salesman's presentation. 87 Buyer's Rating of Decision-Making Criteria The last phase of the data collection process involved buyer decision-making criteria. A list of criteria actually used by the buying committee in the selection Of new products was prepared by analyzing the dialogues between the salesman and buyer and between the buyer and merchandiser. Each criterion was pasted separately on cardboard, and each card identified with a code letter on the back. Each buyer was given the pack Of cards and asked to rate the criteria on a nine-point differential scale ranging from unimportant to very important and then rank them in order Of importance. In cases where the buyer did not clearly understand a criterion, it was explained to him by the researcher. The buyer was given an opportunity to add any criteria which he felt to be important. Statistical Tests Statistical tests were used to (1) check the difference between the buyer's and the researcher's evaluation Of a salesman's performance and (2) test the research hypotheses. In a statistical test involving hypotheses, it is necessary to specify the level of alpha risk (sometimes referred to as Type I error), which is the probability Of rejecting the null hypothesis if it were, in fact, true. In testing all hypotheses an alpha value of 0.01 is used unless otherwise specified. 88 Statistical Test to Check the Difference Between Buyer's and Researcher's Evaluation Of’ Silesman's Performance The Wilcoxon Matched-Pairs Signed-Rank Test (90), a nonparametric test, is most appropriate for checking buyer- researcher evaluations because the requirements for this test are met. It is useful in testing the differences between two samples which are not independent and for which the level of measurement is at least "ordinal." In this case the evaluations of the salesman's performance by the buyer and the researcher formed matched pairs, and the level Of measurement is "ordinal." Testing Research Hypotheses The statistical tests used to test the research hypotheses proposed in Chapter Five are discussed below. Hypothesis l.--Since the level of measurement is "ordinal" or "rank," the Spearman rank order correlation coefficients (rs) are determined. In hypothesis 1 the salesman's performance is the dependent variable (the one which is predicted), and the salesman's quality (plan- ning and preparation, task empathy, expertness) is the independent variable. The t-test is used to test the significance of the relationship between the dependent and independent variables because the sample size is far greater than ten (90). Hypothesis 2.--Since the level of measurement is "nominal,“ the chi-square test (a nonparametric one) is used to test the independence 89 (or dependence) between the salesman's performance and the buyer's recommendation to the merchandiser on the new product. Hypothesis 3.--Again the level of measurement is "nominal," and the chi-square test is used to test the independence (or relation- ship) between the buyer's recommendation and the buying committee's decision on the new products. Yates' correction is needed if the expected frequencies are too small and if one does not wish to combine classes (90). Hypothesis 4.--In this case, the level of measurement is "ordinal,“ and several related samples are involved. The Friedman test (a nonparametric test), which is an extension Of matched pair or two related samples, is the most appropriate (37). The Friedman test is used to detect differences in k-different treatments (k32) in b blocks (b32). Since this test depends only on the ranks of the observations within each block, it is sometimes called the "two-way analysis of variance by ranks" (37). The parallel parametric method (which requires an "interval" level of measurement), used to test the null hypothesis of no treatment differences, is called the two-way analysis of variance or dual analysis Of variance. Therefore, if the data on the importance ratings of cri- teria are treated as "interval“ levels of measurement, the dual analysis Of variance can be used, which is a more powerful test (37, 90). CHAPTER SEVEN ANALYSIS OF DATA AND RESULTS In this chapter the data collected at the supermarket chain are analyzed. The following sections include (1) a tabulation of the data; (2) a list of decision-making criteria as extracted from the buying committee interactions; (3) a comparison Of the buyer's and researcher's evaluation of a salesman's performance; (4) a test of the research hypotheses proposed in Chapter Five; (5) a discussion Of the research questions raised in Chapter Four; and (6) a discussion of the results and conclusions. Tabulation of Data The permission to tape the salesman-buyer interactions and buying committee (in this case buyer-merchandiser) interactions was Obtained through the president Of the supermarket chain. Permission to tape the salesman's presentation was obtained individually from each salesman. Only two of the salesmen refused. Before taping, each sales- man was tOld that the researcher was investigating the decision-making process for the new products and that the name of the salesman, buyer, firm, and product would be either deleted or disguised in the final analysis. The researcher spent at least one day with each buyer listening to and taping sales presentations. NO particular difficulty 90 91 was encountered, although there were constant interruptions and noise in the surrounding areas. A total of 52 sales presentations on new products was taped, and records Of the new products, salesman's name, and the firm rep- resented were kept for later cross reference. The Salesman's Eval- uation Form was explained to each buyer by the researcher prior to the sales presentation. Each buyer was specifically requested to evaluate the salesman on that presentation only. The number of presentations to a buyer on new products varied from approximately 3 to 7 in one day, and only those which involved new products were taped. After each new product presentation both the buyer and researcher evaluated the salesman. The summary of these evaluations appears in Table A1. As explained earlier, the ratings of the negative statements (3, 6, and 8) were reversed for consistency. The buyer's evaluations of salesmen corrected for negative statements are presented in Table A2. Average scores of each salesman's qualities were then calculated and are presented in Table A3. These data are used in testing hypothesis 1. Almost 90 new products were presented to the buyers by salesmen. Of these, only 57 were presented by the buyers to the merchandiser in the meetings which took place within a week of the salesman's presentation. The difference in number is due to several reasons: (1) the buyer delayed presenting a product pending additional information from the salesman; (2) outright rejection of the product by the buyer; (3) the buyer delayed presentation pending the presentation 92 Of similar products by the competitor; and (4) the product was dropped because it was not new. A total of 83 new products was presented by the buyers to the merchandisers' meetings attended by the researcher, which included 57 new product salesman-buyer presentations attended by the researcher. The additional products were those which buyers had held over from previous presentations. All 83 new products are used to test hypoth- esis 3 because the research only required data on buyer recommendations and corresponding data on buying committee decisions. These data were synthesized from the buying committee interactions and are presented in Table A4. Perceived salesman's qualities and corresponding recommendations Of the buyers and buying committee decisions are summarized in Table A5. These data are used in the testing of hypothesis 2. Selected dialogues from some buyer-salesman interactions are reproduced and appear in Appendix 8. Selected dialogues from buying committee interactions are also reproduced and appear in Appendix C. Decision-Making Criteria The dialogues of the buying committees were analyzed to isolate the decision-making criteria actually used in the selection Of at least one new product. A total of fourteen criteria were thus isolated. These are summarized below. 1. Sales Potential of the Product: determined by the case movement of similar product, supplier's information, test market results, intuitive feeling, or by some other method. See Appendix C, Items 1, 3, 4, 5, 6, 8, 10, 14, l6, 18, 25, 28, 29, 30, 32, 36, 38, 49, 52, 58. 10. II. 12. I3. 93 Manufacturer/Supplier's Backing(amount of preselling by the manufacturer; track record): includes advertising and promo- tion (especially in the local market), evidence of consumer acceptance (such as test market results), sampling, coupons, deals to consumers, and so forth. See Appendix C, Items 4, 7, 10, 15, 16, 20, 25, 28, 29, 30, 32, 38, 42, 48, 49, 56. Introductory Terms and Allowances: includes deals, advertising and display allowances, performance requirements, cooperative advertising, extended billings, method Of payment of allowances (such as off invoice, bill back, and so forth). See Appendix C, Items 1, 4, 7, 9, 10, 39, 53. Manufacturer's Coordination of Promotion and Advertising Programs with Distribution on the product. See Appendix C, Items 4, 7, 10. Overall Potential Profit (in Dollars) of the Product: includes gross margin, price of the product after deals and/or allowances. See Appendix C, Items 1, 4, 5, 8, l4, 18, 29, 48, 49, 57. Potential Value to Consumer Compared to Similar Products after allowing for the difference in labelTTOrivate versus national brand): the customer is generally willing to pay more for the national brand, compared to a private label. See Appendix C, Items 1, 4, 5, 7, 22, 30, 37, 38, 41, 44, 45, 49. Requests for the Product by the store managers based on customers' requests. See Appendix C, Items 19, 29, 42, 51. Avoidance of Duplication of products perceived to be very similar to the one carried now. See Appendix C, Items 10, 14, 30, 35, 54. Shelf Space Requirements. See Appendix C, Items 4, 6, 21. Seasonality of Product Sale. See Appendix C, Item 25. Overall Packaging: includes packaging size, colors, copy, layout, and so forth. Also includes case size and open stock versus cut case. See Appendix C, Items 29, 32, 42, 48, 51. Uniqueness of the Product: one of a kind. See Appendix C, Items 33, 56, 58, 59. Service from the Supplier: includes follow-up of orders, deliveries, payment Of allowances, information on competitive products, information on local market, store visits, setting up of displays, product quality in terms of specification, and so forth. See Appendix C, Item 36. 94 14. Potential Competitive Move of Manufacturers SellinggSimilar Products. See Appendix C, Items 36, 38, 48. Each of these criteria was pasted on cardboard and given to each buyer for ranking. The results are tabulated in Table A7. The buyers were also asked to rate each criterion on a nine-point differ- ential scale ranging from unimportant (l), to moderately important (5), to very important (9). The results are summarized in Table A6. These results are used in testing hypothesis 4. Statistical Test to Check the Difference Between Buyer's and Researcher's Evaluations of Salesman's Performance The salesman's overall performance was evaluated by both the buyer and the researcher, thus forming matched pairs. The Wilcoxon Matched-Pairs Signed-Ranks Test is used to test the differences between the ratings of the buyers and the researcher (90). The following null and alternate hypotheses are tested: Null Hypothesis The ratings of salesmen's overall sales performance by the buyers and the researcher are the same. Alternate Hypothesis The ratings of salesmen's overall sales performance by the buyers and the researcher are not the same. The data from Table A1 were used in computations. Since the sample size is large (greater than 30), the sampling distribution Of T-statistics is approximated by the normal distribution (90). The calculations showed the critical value of Z==-.7447 corresponding to the critical value of a==.4564. Therefore, the null hypothesis is 95 accepted at a==.01 level (corresponding 2 value = :2.58). There is no statistical difference between the ratings Of the salesman's overall sales performance by the buyers and the researcher. Testing of Research Hypotheses The hypotheses proposed in Chapter Five are tested below using the statistical tests discussed in Chapter Six. Hypothesis 1 There is a significant positive correlation between the salesman's (l) planning and preparation and overall per- formance; (2) task empathy and overall performance; and (3) expertness and overall performance. The salesman's overall performance is the dependent variable and his quality (planning and preparation, task empathy, expertness) is the independent variable because the salesman‘s overall performance is being predicted from salesman quality. The Spearman rank order correlation coefficients (rs), using data in Table A3, are calculated and are given in Table 1 below. Table l. Spearman Rank Order Correlation Coefficients (n= 52) Rank Dependent Independent Correlation t- a Variable Variable Coefficient Statistics Value Perceived Perceived +0.753 8.09 <.OOl salesman's planning and performance preparation Perceived . salesman's ESEReOHegth +0-692 6.78 <,oo] performance p y Perceived . salesman's Perceived +0.635 5.93 <.OOl performance expertness 96 The coefficients are all positive and high (a value Of rs==l.O means that there is a perfect correlation, and a value Of rs==0.0 means that there is not correlation); therefore, hypothesis 1 is supported. Hypothesis 1 is further supported by using the t-statistic to test the significance of rank correlation. It is valid to use the t-statistic in this manner because the sample size (n==52) is far greater than the minimum requirement Of ten (90). The subhypotheses used to test the significance of the coefficient of rank correlation are: Null Subhypothesis There is zero correlation between the dependent and independent variable. Alternate Subhypothesis There is a significant correlation between the dependent and independent variable. The calculations support the acceptance of the alternate subhypothesis at the a==.Ol level: There is a significant correlation between the salesman's overall performance and the salesman's quality (preparation and planning, task empathy, or expertness). Hypothesis 2 There is a positive relationship between the salesman's performance as perceived by the buyer and the buyer's recommendation to the buying committee to buy the new product. Using data in Table A5, a 3)(2 matrix is Obtained. This is shown in Table 2. The salesman's performance is divided into two categories: (1) average or below and (2) above average or better. The buyer's recommendations to the buying committee to buy the new product were extracted from the buyer-merchandiser interaction tapes 97 (summarized in Table A5) and are divided into three categories: (1) Yes, (2) Indifferent or hold (includes indecision, hold it, no recommendation), and (3) NO. Table 2. Relationship Between the Salesman's Performance and Buyer's Recommendation Salesman's Performance Buyer's Average Above Average Recommendation to Buy or Below or Better Total Yes 6 14 20 Indifferent or hold 4 11 No _12_ .151 _2_6 Total 22 35 57 The chi—square test is used with the following null and alternate hypothesis: Null Hypothesis The buyer's recommendation to buy is independent of a salesman's performance. Alternate Hypothesis The buyer's recommendation to buy is dependent on the salesman's performance. The calculations support the null hypothesis at the a==.01 level, which means that statistically the buyer's recommendation to buy is independent Of the salesman's performance (as perceived by the buyer). Since the percentage of new products recommended by the buyer is low (35.1 percent), and since the percentage of salesmen with above 98 average or better performance ratings is high (61.4 percent), the above results could have been expected. Further analysis Of the resultsshows that in the case of 70 percent of the products recommended by the buyer, the salesman's performance is above average or better, and in the case of products not recommended by the buyer, 53.8 percent Of the salesmen have above average or better performance ratings. Therefore, the chance that the buyer will recommend the product is higher if the salesman has an above average or better performance rating. Several other factors may have been responsible for the above results: (1) the small sample size necessitated collapsing the cell for the chi-square test; (2) presentation of more than one product by the salesman (if he presented more than one, he was given the same score for all products); (3) the amount Of preselling; and (4) reasons of rejection beyond the control of the salesman. In view Of these limitations, hypothesis 2 is neither accepted nor rejected. These results are further discussed in the next section. Hypothesis 3 There is a positive relationship between the buyer's recommendation to the buying committee and the buying committee's decision to buy the new product. Using Table A4, a 3)<3 matrix is Obtained, shown in Table 3. The buyer's recommendation to buy has been divided into three categories: (1) Yes, (2) Indifferent (n: hold (includes indecision, hold it, no recommendation), and (3) No. The buying committee's decision to buy is also divided into three categories: (1) Yes; (2) No decision or hold; and (3) NO. 99 Table 3. Relationship Between the Buying Committee's Decision and Buyer's Recommendation Buyer's Recommendation to Buy Buying Committee's Indifferent Decision to Buy Yes or Hold NO Total Yes 23 2 3 28 NO decision or hold 3 9 3 15 No __ .2. as _49_ Total 30 13 40 83 To test this hypothesis the chi-square test is used. following null and alternate hypotheses are used: Null Hypothesis The buying committee's decision to buy a new product is independent of the buyer's recommendation. Alternate Hypothesis The buying committee's decision to buy a new product is dependent on the buyer's recommendation. The Since the frequency in several Of the cells is less than 5, Yates' correction is applied in calculating the value of chi-square; ignoring Yates' correction could lead to an excessive rejection of the null hypothesis due to an overstated value of chi-square (90). The calculations, even after applying Yates' correction, support the alternate hypothesis at the a==.Ol level. Therefore, hypothesis three is accepted. This means that the buying committee's decision is related to the buyer's recommendation. IOO Hypothesis 4 There are no significant differences in the importance ratings of the new product decision-making criteria of different buyers. TO test this hypothesis, the Friedman test (37) is used. Using the data in Table A6, the calculated value of the Friedman test statistic is T==5.54. The critical value of T (approximated by chi-square distribution which is reasonably close) is 12.59 at a==.05 and 16.81 at a==.01. Since the calculated value Of the T- statistic is lower than the critical value of'T at a==.Ol (critical value of a==.48), the above hypothesis is accepted. This hypothesis is also supported by the dual analysis Of variance when the criterion importance ratings scale is considered as an interval scale, which is a reasonable assumption in the case (90). Since this hypothesis is accepted, it means that there are no significant differences in the importance ratings of the new product decision-making criteria of different buyers. Results Before proceeding further it is important to point out that almost all the new products studied fall under the categories Of minor and normal innovations as defined by Howard and Sheth (72). Salesman's Qualities and New Product Decisions Two questions dealt with the salesman's qualities and new product decisions. These are answered below. 101 1. Does an above average or better salesman's performance result in a favorable recommendation by the buyer to the buying committee? Hypothesis 2 deals directly with this question. NO conclusion was drawn on this hypothesis for several reasons discussed briefly earlier in this chapter. These are discussed below in more detail. First, the small sample size necessitated collapsing the cells for the chi-square test. One of the reasons for the small size was the withholding of presentations by the buyer to the buying committee (due to a lack of information, need for a group presentation, and so forth). Second, 39 salesmen presented 57 new products, which means that few salesmen presented more than one new product. One salesman accounted for 4 new products. In cases where a salesman presented more than one product, the same performance rating was assigned to all products because it was very difficult to separate the performance ratings of salesmen for different products. Third, a great deal Of preselling takes place in the industry. In most cases the salesman has at least one contact (personal or by telephone) with the buyer prior to the formal sales presentation. Sometimes a new product is presented a second or third time because the company allows the salesman to present it again after a lapse of 90 days. (A product may be presented before 90 days have elapsed if there is a significant change in the overall marketing mix of the manufacturer.) Due to preselling of the product, it is possible that the salesman's product may be bought even though his sales performance is poor. 102 Fourth, the percentage of salesmen with above average or better performance ratings was higher in the products recommended by the buyer than in products not recommended by the buyer (70 percent versus 53.8 percent). These data are shown graphically in Table 2. In the case Of indifferent or hold recommendations by the buyer, 70 percent Of the products were presented by the salesmen with above average or better performance ratings. Furthermore, if the buying committee's decision is used in place Of the buyer's recommendation, the results indicate that 76.5 percent of the products actually purchased were presented by salesmen with above average or better performance; in the case of products rejected by the buying committee, 57.1 percent were presented by salesmen with above average or better sales performance. These data are shown in Table 4. Table 4. Relationship Between Salesman's Performance and Buying Committee's Decision Salesman's Performance Buying Committee's Average Above Average Decision to Buy or Below or Better Total Yes 4 l3 l7 Indifferent or hold 6 12 NO 12 16 28 I Total 22 35 57 103 Fifth, each salesman fills out and presents a new product sheet along with his sales presentation. This sheet contains a great deal of information on the new product, including new product characteristics, advertising, allowances, pricing, guarantees, ship- ping, and store handling. The buyer uses this information in eval- uating alternatives and in making his recommendation to the buying committee at a later date. The main point is that the salesman's performance evaluation and the buyer's recommendation are not simultaneous; there is a time lag. Finally, in reviewing the buying committee interactions (see Appendix C), one or more Of the following reasons were found for the rejection of the product presented by a salesman with above average or better performance: Number of Products Expensive--no value ........ . . . . 7 NO immediate need ............. 1 No backing by the manufacturer 2 Seasonal product ..... 1 Low anticipated movement (weak product). 3 DO not want duplication ......... . 2 Lack Of shelf space . .‘ .......... 2 Do not want to be first in the market . . 1 These reasons clearly indicate that rejection was beyond the control Of the salesman. Conclusion It can be concluded that the chances of a buyer recommending the salesman's product are higher if the salesman's performance is above average or better as Opposed to average or below. Furthermore, if the 104 product Of the salesman with above average or better performance is not recommended by the buyer, it is due to reasons beyond the sales- man's control. In other words, a good performance (above average or better) is very important from both the manufacturer's and the sales- man's pOint Of view because, more often than not, it leads to a positive recommendation by the buyer; when it does not, the reason for rejection is beyond the control of the salesman. Discussion of Results In 10 cases the buyer either did not make a recommendation, or the buying committee deferred the decision. The main reasons were lack of information, no samples supplied by the salesman, need to negotiate a deal, need to compare with other similar products, and so forth. In these cases the salesmen could have contributed to a decision through better planning and careful preparation. In 6 cases the buyers also recommended products which were presented by the salesmen with average or below average performance (performance evaluated by the buyer). The main reason was that these products Offered a better value. This indicates that the buyers care- fully evaluate each new product before presenting it to the buying committee. 2. Are there significant positive relationships between the salesman's preparation and planning. salesman's task empathy, salesman's expertness, and salesman's performance? Hypothesis 1 answered this question affirmatively, showing the highest correlation (rS==.753) between the salesman's performance and 105 his planning and preparation (see Table l). The value of the coefficients between the salesman's performance and the other two qualities (task empathy and expertness) were also very high. However, the value Of the coefficients between the salesman's performance and other qualities (such as social empathy, trustworthiness, and dynamism) were considerably lower. Further analysis Of the data was carried out by calculating the partial correlation coefficients. The results are discussed below. Partial Correlation Coefficients Partial correlation is the association between a dependent variable and a single independent series with other factors remaining constant (90). The correlation coefficients calculated in this chapter are called the "raw correlations" or "zero order correlations." For example, a correlation between variable 3 (planning and preparation) and variable 4 (performance) is a zero order correlation (see Table 5 below) and is designated by r34. When one variable is partialed or held constant, the correlations are referred to as "first-order partial correlations": for example, a correlation between variable 3 and variable 4 with variable 1 held constant (denoted by r34.]). When two variables are partialed or held constant, the correlations are called "second-order partial correlations": for example, a correlation between variable 3 and variable 4 with variable 1 and variable 2 held 1 constant (denoted by r34.]2). 1For further explanation and calculation procedures, see Jum C. Nunnally, Psychometric Theory (New York: McGraw Hill Book Company, 1967). pp. 151-160. 106 Table 5. Correlation Matrix (n= 52) Planning and Expertness Task Empathy Preparation Performance (Variable 1) (Variable 2) (Variable 3) (Variable 4) Expertness 1.000 0.575 0.672 0.635 (variable 1) Task empathy 0.575 1.000 0.592 0.692 (variable 2) Planning and 0.672 0.592 1.000 0.753 preparation (variable 3) Performance 0.635 0.692 0.753 1.000 (variable 4) The zero-order correlation coefficients between various variables were calculated and are summarized in Table 5 above. First- Order and second-order partial correlations were then calculated from the zero-order correlation coefficients and are summarized in Table 6 below. From Table 6 it is clear that (1) partial correlation between performance and planning and preparation, when expertness and task empathy are held constant, is significant and is not too far below the zero-order correlation; and (2) partial correlation between per- formance and task empathy, when expertness and planning and preparation are held constant, is also significant and is also not too far below the zero-order correlation. 107 Table 6. Partial Correlation Coefficients (n = 52)a (torit = 2.682 at 01 = .01) Zero—Order First—Order Second-Order r14 - 0.635 rm.2 = 0.401; rI4°3 = 0.265 r14.23 = 0.150 (teal — 5.812) (teal = 3.095) (teal = 1 943) (teal = 1.073) r24 - 0 692 r24.] - 0.517, r24 3 = O 464 r24.13 = 0.419 (teal - 6 778) (teal = 4 270) (teal = 3 704) (teal = 3.263) r34 = 0.753 r34.] = 0.570, r34.2 = 0.590 r34.]2 = 0.490 (teal = 8 092) (teal - 4 905) (t al = 5 167) (teal = 3.975) aVariable l = expertness; variable 2 = task empathy; varia- ble 3 = planning and preparation; and variable 4 = performance. The calculated and critical values of t-statistics (teal and terit) to test the significance levels Of correlation coefficients are given above in Table 6. Conclusion The above discussion suggests that the three qualities of a salesman, namely, planning and preparation, task empathy, and expertness, are important determinants of the salesman's performance because Of high zero-order correlation coefficients. However, the first two are partic- ularly important because of the high value of their second-order correlation coefficients. 108 Decision Making in Buying Committees Two research questions dealt with decision making in buying committees. These are answered below. 3. How influential is the buyer in the selection of new products in chains using a buyer-merchandiser buying committee? Based on the data in Table 3 the calculations show that: 1. For 66 of 83 new products the decision of the merchandiser was the same as the recommendation of the buyer. This means 79.5 percent of the time the buyer's recommendation was accepted by the merchandiser and 20.5 percent of the time it was not. 2. Of 83 new products presented to the buying committee, 28 were bought (33.7 percent), 40 were rejected (48.2 percent), and no decision was made on 15 (18.1 percent). 3. A total of 30 new products were recommended by the buyers, equivalent to 36.1 percent. Of these 30, 23 were bought by the buying committee (76.7 percent Of the products recommended by the buyers). 4. For 7 products Of the 83, equivalent to 8.4 percent, the recommendation of the buyer was reversed by the buying committee, that is, changed from yes to no (4 times) and from no to yes (3 times). From items 1 and 3 above, it is evident that there is a high degree of agreement between the buyer and the buying committee. 109 Conclusion It can be concluded that the buyer is very influential in the selection Of new products. This is also supported by hypothesis 3, tested earlier in this chapter. Discussion of Results The above results are to be expected because each buyer works closely with the merchandiser and is aware of the way he makes decisions. The researcher noted that there was much more discussion between the buyer and the merchandiser when the buyer was relatively new to the company. In a buyer-merchandiser buying committee, all three types Of social influence take place (compliance, identification, and inter- nalization). This was apparent in cases when there was disagreement between the buyer and merchandiser: The recommendation Of the mer- chandiser prevailed. (Note that the merchandiser has the authority to make the final decision, therefore, compliance does take place.) However, further analysis revealed that in cases where the buyer's recommendation was reversed, most of the time the buyer failed to consider one or more of the following important criteria: Number of Products Sales potential of the product ....... 3 Very little backing from the manufacturer 2 Seasonality Of the product ......... 1 Customer's request ........... . . 2 No value .................. 2 One of a kind . . . ............ l 110 Rate of New Product Adoption The calculations presented in item 2 above indicate that approximately one out of every three (33.7 percent) new products presented to the buying committee were purchased. This rate is considerably higher than the industry average, since most supermarkets report adopting 22 percent of the new products presented to them (150). Therefore, the industry rate Of adoption may be slightly higher than the 22 percent based on the new products presented to the buying committees (the difference is due to the outright rejection by the buyer of some products). During casual conversation with the researcher one of the merchandisers in the chain under study indicated that the rate of adoption Of new products at the chain was rather high. Several factors may contribute to the high rate. 1. The initial screening system weeds out weak products on the telephone. 2. A great deal of preselling occurs. Salesmen make one or more contacts before the actual presentation of the product to the buyer. Also, the salesman may present his product again after 90 days from the previous presentation, or even before 90 days has elapsed if there is considerable change in the supplier's marketing mix. 3. Outright rejection of some products by the buyer, Of Obvious rejects, means that stronger products filter through. 4. Purchase Of new products on a "one-time" basis due to excep- tional values and/or high promotions by the manufacturers allows the chain to make more profit. III 5. The chain has a policy Of discontinuing new products if movement and profit do not justify the shelf space investment during the first 90 days. Informal discussions with the buyers revealed that the number of new products not surviving the 90-day trial period (an "acid test") has increased in the last year or so. In the Opinion of the researcher the industry rate of new products purchase and the rate of new products not surviving the 90-day trial may be increasing (150). Both the manufacturer and the chain would like to reduce the rate Of products not surviving the trial period because Of the initial costs, especially to a manufacturer, who spends large amounts in promotion, advertising, allowances, selling, product development, and so forth. 4. What percentage of decisions is made and what percentage of decisions is deferred in buyer- merchandiser buying committees? The data in Table 3 show that decisions on 68 new products out of 83 were made in favor of or against the product, equivalent to approx- imately 82 percent; 15 out Of 83, or 18 percent were deferred. However, Of the 15 decisions deferred, the buyer was indifferent in the case Of 9 products mainly due to one or more of the following reasons: Number of Products Lack Of information .................. 4 NO interest at that time--will present again ...... 3 Need to negotiate terms ................ 2 Need to listen to the competitor's presentation . . . . 2 Wait and see if someone else picks up the product . . . 1 112 In other words, in the Opinion of the researcher 6 decisions (7.2 percent) were deferred for insufficient reasons. Conclusion A very high percentage Of decisions is made and a very low percentage is. deferred in the buyer-merchandiser type Of buying committee studied here. Due to the highly competitive nature of the food industry, it is necessary that the chain move quickly on new products. Since the buyer-merchandiser buying committee deferred very few decisions, it may be considered an efficient buying committee. New Product Decision Criteria The two research questions raised in connection with the new product decision criteria are answered below. 5. What are the major criteria used in the selection of new products? As discussed earlier in this chapter, a list Of 14 decision— making criteria was prepared using mainly the buying committee inter— actions. Each criterion was found tO be most important in the decision making concerning at least one new product. During the process of ranking these criteria, the buyers were asked to add any which they felt to be important. Two buyers made suggestions, but these already had been included in the criteria list. Conclusion In view of the methodology used to isolate the new product decision-making criteria, the researcher feels that the list presented earlier in this chapter is a very comprehensive one Of those criteria 113 actually used by the buying committee in the selection of new products, and the list should be used in future research. Discussion Of Results The five most important criteria in order of importance as determined by ranking the average buyer's purchasing criteria rank scores are: Sales potential of the new product Overall potential profit Of the product Manufacturer/supplier's backing (advertising/promotion) Introductory terms and allowances Potential value to consumer compared tO similar products These results differ from those reported in other studies (see Chapter Four). It is interesting to note that these results also differ from those Obtained by analyzing the data reported by Sweitzer (139) in the same supermarket chain about two years ago, using a different ques- tionnaire (see Appendix 0). One Of the main differences was that the Sweitzer data did not show the high importance of sales potential of the new product (ranked sixth on the basis Of mean buyer's purchasing criteria importance score). That same criterion was ranked first in the present researcher's analysis. A major difference in the method- ology used in these two studies is the difference in the preparation Of the questionnaire. The questionnaire used in this study was pre- pared from the actual buyer-merchandiser interaction transcriptions and was explained to the buyers prior to answering, whereas the ques- tionnaire used by Sweitzer was not prepared in that fashion. He probably used published data and/or informal investigation to arrive at his list Of criteria. 114 Results similar to that Of the researcher were Obtained by analyzing the buyer's purchasing criterion importance scores collected at a large eastern supermarket chain using Sweitzer's questionnaire (see Appendix E). 6. Are there significant differences in the importance ratings Of the new product decision-making criteria of different buyers? Conclusion According to hypothesis 4, tested earlier in this chapter, there are no significant differences in the importance ratings of the new product decision-making criteria of different buyers. Discussion of Results Even though there were not many differences in the results of this study and the study by Sweitzer (139) and that of the eastern supermarket chain with respect to ranking of criteria, the results are contrary in that in this study buyers' ratings did not differ. In the Opinion Of the researcher the differences are mainly due to the use Of different criteria. The criteria isolated from the actual decision- making process were used in this study, whereas the-other study does not reveal how the list Of criteria was prepared. In this study each criterion was explained to each buyer prior to ranking by the buyers. For these reasons the methodology used in this study is probably superior to the other study, but since the data base used in this study is very small, a larger sample size is needed to draw a definite conclusion. CHAPTER EIGHT CONCLUSIONS, LIMITATIONS, AND FUTURE RESEARCH This chapter is divided into three main sections. The first section summarizes the study's conclusions, the second deals with the limitations of the research, and the third summarizes some suggestions for future research. study. Conclusions Several conclusions can be drawn for the sample used in this Source credibility, empathy, and preparation and planning are the three most important salesman's qualities in selling to supermarket chains. A salesman's planning and preparation, task empathy (a component of empathy), and expertness (a component Of source credibility) are the three important determinants of a salesman's overall performance as perceived by the buyer. However, the first two are particularly important. A salesman's planning and preparation, task empathy, and expert- ness are positively related to his overall performance (as perceived by the buyer). 115 10. 116 The chances of the buyer recommending the salesman's product are higher if the salesman's performance is above average or better as opposed to average or below. In the event the product presented by the salesman with an above average or better performance rating is not recommended by the buyer, it is due to reasons beyond the control of the salesman. Almost all the new products studied fall under the categories of minor or normal innovations. In the buyer-merchandiser buying committee, a very high per— centage Of decisions is made and a very low percentage Of decisions is deferred. In that sense, a buyer-merchandiser buying committee is considered an efficient form. The buyer is very influential in the selection Of new products. The list Of fourteen criteria extracted from buying committee interactions, presented in Chapter Seven, is a comprehensive list Of the criteria actually used in the selection of new products in supermarket chains. The five most important criteria, in order of importance, used in the decision making concerning new products in the supermar- ket chains are: (i) sales potential of the new product; (ii) overall potential profit Of the product; (iii) manufacturer's/ supplier's backing; (iv) introductory terms and allowances; and (v) potential value to consumer compared to similar products. The other criteria are uniqueness of the product; manufacturer's 11. 117 coordination of promotion and advertising programs with distribution; service from the supplier; seasonality of the product sale; requests for the product; shelf space requirements; overall packaging; avoidance of duplication; and potential competitive move Of manufacturers selling similar products. There are no significant differences in the importance ratings Of the new product decision-making criteria of different buyers using the questionnaire developed in this study (Appendix F). Limitations of the Research This study has several limitations. Many have been discussed in the main body of the text, and some major limitations are summarized below: 1. Data were collected at only one supermarket chain, hence the conclusions are merely suggestive, and a larger data base is needed. The sample size of buyers is too small to make any conclusion with respect to ranking Of the criteria. A larger sample from different chains is needed. The presence Of the researcher in the buyer-salesman and buying committee interactions may have introduced some response bias. To compare what type of buying committee is most "efficient," the following are needed: (1) a precise definition of effj; \ cient, (ii) several variables, (iii) better measurement conduct 1. 118 techniques, and (iv) data from chains using different types Of buying committees (different numbers and membership). The dialogue analysis was carried out by the researcher due to the very simple nature Of the analysis requirement of this study. However, it is conceivable that the analysis could have been carried out better by a professional content analyst. Future Research There are several areas in which it would be fruitful to future research. Comparison of the buyer's and seller's evaluation of a salesman's performance would answer the question: Is the salesman as effective in the field as the manufacturer thinks he is? Comparison Of the different sizes of buying committees to determine the Optimum size would answer the question: What size of committee is most efficient? The results of this research could be confirmed using a larger sample from different chains, especially the new product decision-making criteria. Comparison of new product decision-making criteria by product categories, for example, general merchandise or health and beauty aids, would answer the question: Are different criteria used for different categories? 119 Comparison Of new product decision-making criteria used by those supermarket chains, department stores, and drug whole- salers which use buying committees would answer the question: 00 different types Of resellers who use buying committees use the same decision-making criteria? APPENDIX A SALESMAN'S EVALUATION FORM APPENDIX A SALESMAN'S EVALUATION FORM MICHIGAN STATE UNIVERSITY BUYER - SELLER RESEARCH (Following to be completed by the buyer after discussion with the salesman, broker, or manufacturer's representative.) Listed on the next page are some characteristics or qualities Of the salesman you have just seen. Please indicate your feelings, as candidly as possible, as regards to your agreement or disagreement with each statement by circling one Of the five points on the following differential scale. 1 2 3 4 5 Stron ly Agree Agree Indifferent Disagree Strongl Disagree SA) (A) (I) (D) SD) Your responses will be kept completely confidential and will not be revealed to anyone. Your responses will be analyzed with hundreds of others. Your cooperation and appreciation in this study is greatly appreciated. Thank you! 120 121 1. He fully understands the criteria that you use 1 2 3 4 5 to make purchase decision. 2. He seems to fully understand if his product will 1 2 3 4 5 meet [your company's] needs. 3. He does not seem to understand the way you do 1 2 3 4 5 your job as a buyer. 4. He is very courteous and considerate. l 2 3 4 5 5. He listens very carefully. 1 2 3 4 5 6. He does not allow you to ask questions and 1 2 3 4 5 venture Opinions. 7. He seems to be very well informed on all 1 2 3 4 5 aspects of this product. 8. He seems to be unqualified for his job. 1 2 3 4 5 9. He seems to be a just and fair person. 1 2 3 4 5 10. He is aggressive and forceful. 1 2 3 4 5 11. He is active and energetic. l 2 3 4 5 12. He seems to have done a great deal of l 2 3 4 5 preparation for this appointment. 13. His sales presentation was very well planned. 1 2 3 4 5 14. He does not follow through the order. 1 2 3 4 5 15. How would you rate the overall performance of the salesman you have just seen? .1. 2 3} fl. .5. £5. .7. Be ow Above Very Poor Poor Average Average Average Good Excellent 15 4 14 NAc 6 NA 11 12 13 3 8b 10 Statementsa 5b 122 Summary of Salesmen's Evaluations T' l Table A1. 2 2 2 2 Evaluation by Buyer Researcher Buyer Researcher Number Salesman's A r34 55556425555445M5M4N4M55455ST4T5T63M5M3M43342211236533 4 N 224 N 4 N a 3, 4 2’ 2 2 2 2 3 2 NA 1’ NA 2 NA 2* 1.1 342211 3232123233213N3N NA NA 1.232T34233T14N3M3N23235555T~41244 22T112224421T£2127N2N3N2 AAA 72 To an .A” an mm 22T2122234 233j22N2N3NT~ 3243214222I2jN2N3N4343431143 32 A A M A A A A 22121212337221 22N2N2 2N553122§222T22N4N3N22222323222223 an an an 22T22112435445444N3N4N4N3445:43544T4ANWN4N444544T¢2442444 9.9211o21111119215139.929.929.92ocmmaauncommoEunsca-fiqauaJOEOEOEduoavaaai.unnwnuoLuuocoaacacocoEcanwacocacocococ 9.921.1104«2111113131nocj29292921.NHQ.uni."no;“"1111f1111u929c7aoa9.1.9211unaumuoauuoa9.9.9.9.9.:uoaoaeuva929EQ. 34112211725445434N4N4N4 A A A A A A A 341122fil11232321432N2N3NTJN32W£2233212232N2N4"23314251511143 A A A A A A A 34111231133221.2432N2NTN2N224I124211332N2N4N34324251521|242 r r. r r r r r. r r r. r. r r r. r r. r r r r r r r. r r. r r r e e e e e e e e e e e e e e e e e e e e e e e e e e e e h h .n h .n h h h .n h h h h h h h h h h h h h h h g h h h C C C C C C C C C C C C C C C C C C C C C C C C C C C C r r r r r r r. r r r r. r r r r. r. r r r. r r r r r r. r r r rararararararararararararararararararararararararararara wanenanmnanununanwnanwnawanunananmnsnwnanmnwnununananuna HeueueueueueueueueuEUQueueueueueueueueueueueueueueueueue 3 4 5 6 1: 8 9 0 1| 2 3 4 5 6 7 8 9 0 .l. 2 3 4 5 6 7 8 9 O I I I I .l. ..l I 1| 1. 11 2 2 2 2 2 2 2 2 2 2 3 10 11 12 13 14 15 Statementsa 8b 123 Table Al--Continued 5b 2 2 2 4 by Researcher Researcher Buyer Buyer Buyer Number 32 Salesman's Evaluation 54 24 54 32 34 54 .12 112 33 33 Researcher 33 442,0.Owlroilfo A A A fiuuufiunnfiuuufu 1112212 111122.12 112322] 112322] 32112112 555454 1.1111] :Onwfunwtaca 22121:] 221111] 554454 21132111.. 111122112 r r r e e e h h h C C C r r r r a r- a r- a r Wmnmfimw U 9 U 8 U P. U BRBRBRB 4 5 6 3 3 3 Researcher Buyer 37 32 32 ‘13 42 43 33 1] 54 1102 1 2 Researcher Buyer 23 42 22 55 21l- 54 2] 44 22 1 2 39 I 2 Researcher Researcher Buyer Researcher Buyer Buyer 40 41 76 21' Wand 2] #15 I] 55 22 45 25 l Researcher 2 Buyer 42 I3 113 1'2 54 54 12 44 22 2 1 l 1 43 Researcher Buyer 1] 72 22 Ceca 9.11 Tara 9.02 “(at 45 Researcher ’Buyer 44 66 9.9. flan 9.9. 22 Rad. filo; nune 22 22 IFT 2 1'2 Researcher Bfiyer % 1'2 22 22 2] 55 55 1] 25 22 2 2 Researcher Buyer 46 2 2 1 I Researcher Researcher Buyer Buyer 22 2.1 44 22 44 2] 21.! 44 '23 2 2 3 4 Researcher Buyer 23 .Aqu 43 22 44 33 44 22 22 32 43 Researcher Buyer 50 33 ion: 33 22 44 22 44 22 22 43 22 22 Researcher Buyer Researcher bAfter salesman #6, statements 3, 6, and 8 were made negative and statement 14 was added 3Refer to salesman's evaluation form. thus making statement 14 as statement 15. cNA = not available. 52 124 Summary of Buyer's Evaluations of Salesmena Table A2. Statementsb Salesman's 11 12 13 14 15 10 1 Number 6757 NAd NA NA NA 3131 3131 1121 2121 3121 2121 1131 ‘12] 212.1 3121 1231 2131 2231 1234 6645 NA NA 2232 2232 1242 1233 1132 2131 2143 2121 1132 2131 2141 2122 2132 5678 5455 4444 1221 1321 2422 4322 2322 2321 2321 2212 2223 2212 2222 2422 .1422 12 11 4454 4454 2233 4243 3224 3434 2253 2212 3312 2232 3224 2211 2223 3332 3224 13 14 15 16 6377 4243 1332 1431 1521 2421 2321 5455 14]] 2323 3232 3221 2423 2312 4534 4434 3332 4332 4233 4234 2432 4432 3342 2422 1422 1322 2332 2242 2243 21 22 23 24 3212 "332 3554 2554 4414 4414 2222 3455 4455 2212 2252 2252 4412 3455 3455 6353 434" 1424 1424 2334 2334 2222 1322 2222 4222 2222 2222 2322 1422 4677 4555 5121 5.121 2132 5132 13]] 3111 3111 11]] 1211 1211 3121 3231 33 34 35 36 4576 3354 4312 4311 1122 3144 1422 52.14 1321 1122 112] 1121 3122 5776 2555 3211 3211 2212 2212 2111 1511 2112 2112 2112 2212 2222 2222 6746 4521 2141 1241 2231 2341 1222 ‘12] 1.141 2132 2122 2121 5425 2221 4334 3M34 2333 2334 3434 3434 2223 2223 2322 2221 2223 2222 2321 2423 49 50 51 52 cNegative statements. aCorrected for negative statements. dNA = not available. bNegative statements 125 Average Scores of Salesmen's Qualities Table A3. Performance Preparation F0110w Sa1esman's p U 0.. n .1- n n a 1 D. & m S 4| n a n y D S S .e tn 5.1 Uh rt Tr 0 W . 9.. r5 es 0.9. 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Perceived Salesmen's Qualities and New Products Decisions Buying Salesman's Buyer's Committee's Seria1 Item Sa1esman‘s Overall Recommendation Decision Number Number Number Performance to Buy to Buy 1 2 3 5 Yes Yes 2 4 2 7 Yes Yes 3 5 4 7 Yes Yes 4 6 3 5 Yes Yes 5 7 7 4 No No 6 10 9 5 Yes Yes 7 12 7 4 No No 8 13 7 4 No No 9 14 8 5 No No 10 16 10 4 Yes No 11 18 14 4 No No decision 12 22 52 4 Yes Ho1d it 13 25 19 7 Yes No 14 27 16 4 No No 15 28 19 7 Indifferent No 16 29 17 6 Indifferent No decision 17’ 3O 17” 6 N67 N0 18 31 17 6 No No 19 33 30 3 Not sure Yes 20 34 28 2 Indifferent No decision 21 35 32 3 Yes Yes 22 36 31 5 Indifferent No decision 23 37 29 6 No No 24 38 26 2 Undecided No decision 25 39 27 1 Yes No 26 45 24 4 No No 27 46 32 3 No recommendation No decision 28 48 4O 6 Yes No decision 29’ 49 42 7 No ’Yes 30 53 39 7 Yes Yes 31 56 40 6 Indifferent Ho1d it 32 58 41 5 Undecided Yes 33 59 43 7 No No 34 60 33 4 No No 35 61 34 6 No No 36 62 34 6 No No 37’ 63 34 6 Yes Yes 38 64 35 6 No No 39 65 35 6 No No 40 66 36 7 No No 41” 67 37 4 No No 42 68 38 5 Ho1d it Hold it 43 69 38 5 No No 44 70 47 4 No No 45' 71 48 6’ Yes Yes 46 72 49 4 No No 47 73 50 3 No No 48 74 51 3 Yes Yes 49 75 1 6 Ho1d it No 50 76 3 5 Yes Yes 51 77 3 5 Yes Yes 52 78 5 6 Yes No decision 53 79 28 2 No No decision 54 80 28 2 Yes Yes 55 81 29 6 Yes Yes 56 82 42 7 No No 57 83 45 6 No No 133 Tab1e A6. Summary of Buyer's Decision-Making Criteria Importance Scoresa . . b Buyers Criterion Number A B C D E F G 1 9 9 6 7 9 9 8 2 9 6 9 9 9 5 9 3 9 9 6 5 9 9 9 4 6 4 9 9 8 5 7 5 8 9 7 7 9 6 9 6 6 8 9 7 6 5 8 7 8 5 9 3 7 6 6 8 7 8 7 7 5 5 5 9 6 6 9 7 7 6 1 10 8 9 9 8 7 9 9 11 7 5 5 7 p 8 7 9 12 9 9 6 5 8 7 6 13 4 7 7 5 8 9 7 14 7 8 8 4 7 7 8 aImportance ratings on 1-9 sca1e ranging from unimportant to very important. Data co11ected by the researcher at a miswestern supermarket chain, Ju1y 1975. bSee questionnaire on New Product Decision Criteria, Appendix F. Data co11ected by the researcher at a midwestern supermarket chain, Ju1y 1975. 134 a Tab1e A7. Summary of Buyer's Ranks of Criteria Buyers Criterion Number A B C D E F G 1 3 1 5 1 1 2 1 2 1 4 4 4 4 6 6 3 8 2 9 6 3 3 2 4 14 13 1 5 5 13 7 5 2 3 8 3 2 5 4 6 7 5 7 2 11 12 3 7 4 14 2 12 10 11 11 8 6 10 11 8 9 14 13 9 12 9 1O 7 7 8 14 10 9 7 12 10 14 1 9 11 11 12 13 11 6 9 5 12 5 6 3 13 13 7 10 13 13 6 9 8 4 12 14 10 11 14 14 12 10 8 aSee questionnaire on New Product Decision Criteria, Appendix F. Data co11ected by the researcher at a midwestern supermarket chain, Ju1y 1975. APPENDIX B SELECTED DIALOGUES FROM BUYER-SALESMAN INTERVIEWS APPENDIX B SELECTED DIALOGUES FROM BUYER-SALESMAN INTERVIEWS (In the following abstractions, B represents buyer, S represents salesman, Brand X is substituted fbr the brand name of'the products, and Brand Y represents competitor's brand.) Item #4: Sinus re1iever-50's (we11-known brand, Brand X) S: WWW I have got another one here (showing a samp1e of the product). One of your competitors has taken up 50's. They wi11 carry both 50's and 24's. B1ess them. (S1ight pause) Who is my competitor? One of my sma11er accounts. Why 50's? Because Brand X is the number one se11er, 50's are outse11ing the 24's, and we have the 1owest cost per tab1et in the industry. With the advertising on one of those size you co11ect a11 the promotion. It is no good to ta1k suggested retai1 price. It is 1.7 cents per tab1et for 24's against 1.6 cents per tab1et for 50's. Norma11y when you buy a 1arger size, you can make more money, but I can't. Because I te11 you I a1ready estab1ished a price for 24's, my price on 50's has got to be a savings to my consumer over 24's. Now I am saving on1y one-tenth of a cent. What wou1d you run the 50's at? Let us 100k at this. You have to show savings. We are getting 79 cents for the 24's. (Buyer performs ca1cu1ation.) So I have to se11 the 50's at $1.29 or $1.39 at the most. Maybe at even $1.49. At 79 cents I am making 40 percent on 24's. At $1.49 and a cost of 82 cents (ca1cu1ating), I wi11 be making 43.4 percent about the same gross. It is a good margin. I think we wi11 take 50's. Fi11 out a new item sheet. D.k. 135 136 Have you been to any of our stores? Oh yeah. Many of them. You have a good-1ooking store. You know that store at Big Beaver, we shop there. And I was in your Southfie1d store. They are good-1ooking stores. That is part of my job. Buyer's comments (to the researcher) after the departure of the salesman. He (salesman) has been to our family store. He is more familiar with our stores. That is what happens when you have a salesman instead of a buyer. 1.6 cents against 1.7 cents, I can cut my gross 3 percent. Instead of 46 percent, I will have 43 percent but still it is well above the average of 40 percent for the department. Item #6: Hair spray, super strong_h01d jwe11-known brand) 5: You're current1y carrying "Hard to Ho1d" and here is "Super Strong HoId" hair spray. What is the difference between the "Hard to H01d" and "Super Ho1d" hair spray? I sti11 think that someone put on the bigger nozz1e or made it wider to spray more, to spit more. No. We have changed the formu1a. By government ru1e we have to have formu1a change. It has to have certain properties and has to be different. Suppose there is a market, what is it taking away from? We must be trading do11ars a1ong the 1ine. No. You wi11 be picking up. Picking up from the area of women over 35 and that want to spend $15 for a hair-do. They want to keep 1ooking 1ike $15 for 3 to 4 days. Why pick up another fragrance? Am I trading do11ars or increasing it? If I am trading do11ars I've got to drop some item and if I am increasing business, it is time to 100k at it. I rea11y fee1 I am trading do11ars here. What are they buying now? We are going after a different age group. She must be buying something now? Whatever is avai1ab1e. B: S: 137 See. That is what I am saying. No. This wi11 make her happy. We are giving her what she needs. Item #7: Househo1d c1eaner (we11-known brand) The salesman explained to the buyer the test market results, time spent in the development of the product (5 years), reason for product development, coupon in advertisement, ingredients in the product compared to other leading brand, and complete deal. This product was in liquid form instead of'aerosol (leading brand). Regarding te1evision, it starts 11/4, first week we'11 have 8 f1ights. TV wi11 be one year. Go back and te11 them either to start the te1evision quicker or extend the dea1. D.k. How are we going to se11 it? It is going to sit there right by the product when the dea1 is avai1ab1e. It is going to sit there and it wi11 be discontinued before it gets off the she1f. Yeah. A1right, a1right. I wi11 see what can be done about it. It does not move unti1 you guys turn on the tube. On top of that. I am buying product right away straight, if it does start to move. I wi11 check how f1exib1e they are. I am not saying that I am going to take it. D.k. Item #14: Cat 1itter (we11-known brand, Brand X) B: Let me ask you this, the other accounts that did not drop it, how much have they increased? The other accounts that have not dropped Brand X? Yeah. Most of the accounts have put in 10 pounds. Put in two sizes. 138 How much have they increased since June? Since June. (Pausing) It does not increase in summer. It is somewhat seasonaI. So it is sti11 the same. Then why did they put in another brand? We11, they put in the other size in spring, on the merit of the sa1e of size. Rea1istica11y, we did not have it in your stores any 1ength of time, but you guys operate so. You get it in, you take a 100k at it, and if it is not se11ing, you get rid of it. (Interrupting) Immediate1y . . . it has been in 4 to 5 months. It is a new type of product. It takes time for peop1e to switch. Based on what we've got here, we don't want to switch. Show me what changes have taken p1ace. I can't show it to him (merchan— diser). Get something more on it, then I wi11 take a 100k at it. Item #16: Baby formu1a (iron fortified) (1itt1e-known brand) S: This is the third baby formu1a. We are trying to make it popu1ar because it is popu1ar in the rest of the country. Here is a new item sheet. I am not fami1iar with it. (Eprains the advantages of his product over the others.) I wi11 present it to him (merchandiser). See what he thinks. How 1ong does it take for de1ivery, under norma1 conditions? A week. Now we need the UPC code. (Sa1esman did not know the UPC code, so the buyer had to exp1ain it.) Here it is. (Gave a number, which was a drug code. He promised to get UPC code.) Is the product pe11etized? Yeah. (Gave the figure.) APPENDIX C SELECTED DIALOGUES FROM BUYING COMMITTEE INTERACTIONS APPENDIX C SELECTED DIALOGUES FROM BUYING COMMITTEE INTERACTIONS (M represents merchandiser in the following abstractions. B represents the buyer. Brand X is substituted‘fior the brand name of‘the products, and Brand Y represents competitor's brand.) Item #1: Hair spray (a we11-known brand) WZWZWZWZ Buyer recommended to switch to a bigger size can (9 oz.) because of the unavailability of’7 ounce cans. He explained the margin (40 percent) and discussed the movement of 7 ounce. Do you have a samp1e? Samp1e is not avai1ab1e. Probab1y we wi11 get a samp1e in one or two weeks. It is a good consumer va1ue. Va1ue is what the consumer perceives it to be--13 ounce versus 9 ounce versus 7 ounce. There are two things: number one, when you add two or three inches to the height of the can and it is on the she1f, she (consumer) observes that when it is with everything e1se. Number two, it is right on the can. Is the advertising bi11 back? Yes. Is the distribution a11owance bi11 back? It is off invoice. Is the ad spend a11? One ad co11ects. Seven ounce no 1onger avai1ab1e? Right. 139 140 Is there any more merchandise in 7 ounce avai1ab1e? No. I checked it. There were on1y 4,000 dozen avai1ab1e and one diverter bought it out. It is a11 gone. Make sure there are no merchandise avai1ab1e. (S1ight pause.) 0.k., go ahead. Item #2: Men's hair spray (a we11-known brand) M: B: What is the number one men's hair spray? Brand Y. You want to disp1ay this item? Yes. What is the price? Ninety-seven cents for 9 ounce. (Pause.) Twenty-nine percent gross. If you want to break in the market, you shou1d be the first in the market. Take 8 cases for each store and in 40 stores it comes to 320 cases, and you said 250 cases. Item #3: E1ectric dry 1ather (a we11-known brand) WZW You are ta1king about Brand X e1ectric dry 1ather? Right. This is again from Sausan (distributor)? Yes. (Pause.) This I can buy at four ounce 1ess 50 cents. Bring it at 29 cents. Out of shave market, how many men use e1ectric shave? How many men use e1ectric shavers? What percentage of men use e1ectric razor? Thirty percent. Out of 30 percent that use e1ectric shaver, how many do you think use dry 1ather before they put it on? ZWZW ZWZW 141 Two percent. (Pause.) Three percent. You just answered your own question. Yeah, but at 49 cents. I don't know. At 49 cents you are sti11 going to appea1 to 2 percent or 1ess than a 2 percent market. We11, assuming my assumption is right. I don't know how many peop1e use e1ectric shavers. I wou1d say 2 percent of dry. . . . (Interrupting.) Out of 30 percent using e1ectric shavers, how many can you switch? Not very much. The point I am trying to make is that there is no market for yourse1f, by price. You are trying to make a market on the basis of price. If there is no market, price is not going to do it. There has got to be a market to do it. (SIight pause.) The price can change the market to a degree, if it is an item in demand by the customer. Don't try to make a market. Go where the market is, o.k.? 0.k. There is a reason why it is 49 cents. Yeah. It is a c1oseout. Yes. It is a c1oseout. It is no good. Item #4: Sinus-reIiever, 50's (we11-known brand) B: We have a market here in Brand X (showing samp1e). We are doing good (emphasizing). We are carrying Brand X (24's). Look at this sheet (showing new item sheet fi11ed out by the sa1esman). One free with 11 on open stock. 0.k. Up to 18 percent performance a11owance. (S1ight pause.) Here is what I propose to do. Current1y we buy 24's at 42.2 cents. Last time and this dea1, it is going to cost 43.3 cents. We are retai1ing for 79 cents which is 42 percent (pausing and correcting himse1f), no 45.5 percent gross. Moving on average 24 to 28 dozen per week. Competition carries 100's at $1.69. Who is competition? Great Scott. They carry 50's. Does Kroger carry? 142 No. They carry 100's. They carry 24's at 79 cents. But they indicated they wi11 continue 24's and they are going to put in 50's. Dristan is number one, Contac aISo up there. After the number one, rest four or five vying the rest. There is Sine Off. You have four companies vying for the rest of the market. Sinus is big business with po11ution and everything. Dristan $1.07, 79 cents for Sinutab. Look at the movement (showing the computer records). To give you a comparison, we move approximate1y 85 cases of Dristan, Sine-Aid 54 cases, Sinerest 26 cases. A11erest is a seasona1 item. What is the performance based on? I sti11 don't understand. It says, the way it is worded, that one free with e1even off invoice distribution a11owance p1us 18.4 percent. It seems there is some qua1ification to that. I want to know what they are? Somewhere it has to say. You've got to read in fine print. Some type of performance is required. When they say “up to," there is a1ways some qua1ification. It must spe11 it out. I don't know what it is. I wi11 find out. I agree with you, it shou1d spe11 it out. On 100's you are 1osing eight cents. I am not recommending you buy 100's. I am making a point here. "Up to" sure came into p1ay yesterday when you ta1ked to the sa1esman. It says here heavy network TV advertising. $650 mi11ion, from Ju1y to September. 00 you know? What did the sa1esman te11 you? The sa1esman indicated we are doing a nice job with Brand X. It is a price item. He (sa1esman) indicated that we are doing a nice job in advertising. It wi11 carry you through the first frost which is towards the end of October, November. I mean ti11 the sinus season. We11, my origina1 question was about advertising. Did the sa1esman te11 you? When does it start? When does it stop? What did the sa1esman te11 you? Did he te11 you if it (not comp1eting the sentence). Did he give you any advertising schedu1e? NO. \ Did he te11 you it is prime time or not? How many gross rating points? 143 B: No. M: Did you ask him those questions? B: No. . M: Number two, he says nationa1 samp1ing. What did he te11 you about nationa1 samp1ing? B: Direct mai1 samp1ing in 12's. M: When is it going to break? It ended. M: When? B: It ended in Ju1y. M: It does not make sense to me. 8: It broke ear1y in the market. M: Now, I am going to make two points. Number one, the time to review the 50's is at the beginning of the dea1. That is the time to take up the 50's. When we buy at the beginning of the dea1, because we do, and if they pick up for you, you want the abi1ity to rebuy. B: Good point. M: Now, if you buy at the end of the dea1 and they take off on you, then you wi11 have to buy at the regu1ar price. B: Right. But you can buy on another dea1. M: What if the next dea1 is not unti1 October, November, wou1d you drop the item? B: I see what you are saying. M: Number two, when you Iook at something, don't just 100k at what you are carrying at the present time, that we wi11 make a dea1 and take the rest as new items. What prompted you to take on 50's? Did the sa1esman present the 50's? Did he say to 100k at the 50's? You decided to 100k at it? 0.k. Now, I wi11 say this to you that you shou1d have 1ooked at the 50's when they came out. '1. ZWZW 144 First time? Yes. First time. 0.k. The sa1esman had to prompt it. The dea1 came the wrong way. You shou1d have prompted the sa1esman. You are recommending to pick up 50's? Yeah. Se11ing at $1.49. 0.k. Your profit is 1ess, margin percent is 1ess, your d011ar profit is more. Are you going to extend categories? I know, I am going to trade do11ars. You are going to see a decrease in sa1e of 24's. I am not kidding myse1f. I am not saying that I wi11 pick up new saIes. Why not? Why? You just added doub1e the exposure. You extended the she1f. If I can't expand the category, I don't want it. I agree with you that you shou1d pick up the 50's but for different reasons: (1) You are getting into the season for this item; (2) the category itse1f is growing. Is there not more peop1e with sinus prob1ems? (Buyer nods in agreement.) Consequent1y, Mrs. Consumer just 1ike she buys 250 counts of aspirin wi11 100k for a 1arger size here. Just 1ike mouthwash and the rest of it. (3) It gives you a better or equa1 d011ar profit as 24's and a1so same margin profit. (4) There is on1y one other guy carrying it and you are 20 cents be1ow. You don't have to worry about other guys. You are going to pick up an additiona1 20 to 25 percent new users, maybe 35 to 40 percent. If you think it won't increase your sa1es, then you better drop some item to pick up this item. I don't want to add one more item. You wi11 get two buys? Yes. If the movement goes, fine. Otherwise, adjust the second buy. 145 Item #5: Antacid, 100's, Brand X (we11-known brand) B: Here is another new item. I wou1d 1ike to put 100's of Brand X. This is a good one. We get 87 cents for the 30's. You are saying that you are moving the same amount of 1iquid as you're tab1ets? I am saying, nationa11y, sa1es are picking up towards 50 percent of 1iquid sa1e. I see from here (Iooking at computer records of item movement) that tab1ets are moving at 38 cases compared to 1iquid at 17 cases. You are se11ing 30's at 87 cents, your cost is 55.7 cents, your margin there is 35 percent. Yes. On this new item the cost is $1.07. Competitions are $1.67, $1.67, and $1.59. You can come out at $1.59 with same 35 percent gross. 0.k. I think there is a market for this, 100's. You can trade up and going back expand the category. I am so1d on it. You are se11ing 30 count at 87 cents and to se11 100's at $1.59, the same margin, better margin, 3 percent better margin. Are you getting an opening buy from this guy? Yes. 0bvious1y, it is an advantage for your customer to buy 100's for $1.59. I think the price is too good. Item #6: Hair spray, super strong ho1d (we11-known brand) B: It says new fragrance. It is the super hard to ho1d, which we don't carry in anybody's 1ine. They (the supp1ier) think we are missing the boat. You carry it in Breck's 1ine, don't you? No. They don't make it in a super super hard to ho1d. They make hard to ho1d and super hard to ho1d. Breck has and they a1ways have, and if I am correct then you got it in stock. 146 B: This is stronger than Brecks. M: On this item, I wi11 base on movement of Protein-21. You wi11 trade do11ars, but if you drop an item to pick up, you drop your s1owest se11er and add this to it. B: Is that what you suggest? M: Yes. We take this on and drop the sIowest mover in this category. Item #7: Househon c1eaner (we11-known brand) B: (Showing samp1e.) This is not the greatest item in the wor1d. We have four now. We just bought Fantastik and we have some Pine-S01 at a cheap price. I am saying "no" at this time. I think our intention was to rep1ace Pine-$01 after the dea1 and if so, then 100k at this. It is more expensive than anything we had. At this time we say "no." M: You are saying their dea1 was ending before the advertising and they had to change that? Was not far enough? 00 they have test market resu1ts? - Not to my know1edge. I don't remember. What are the markets they are in? They did have the information. ZCDZCD Right. Now, I hear you say that you don't have the interest because there is no va1ue? (D That is right. M: And we have four now and we need it now 1ike a ho1e in the head. This Pine-$01, how 1ong is it going to 1ast? B: We bought 500 cases. It is the end of the 1ine. We bought it on a dea1. Without a dea1 coming, it wi11 doub1e in price. We on1y bought because of the dea1. M: Now they are going to doub1e in price? B: And it is sti11 the most expensive in the bunch. M: You are saying pass. Just because of no va1ue and it does not have any track record? _; B: M: 147 Yes. 0.k. Item #8: Liquid c1eaner, 27 ounce (brand not we11 known) B: M B: M This is 27 ounce (Brand X). We have 46 ounce size now. There is no margin in it based on the price on the street. That is why I am saying "forget it." 0.k. There is no margin, there is no movement. Item #9: Oven c1eaner, 7 ounce (we11-known brand) B: M: B: M: Brand X oven c1eaner, 7 ounce. We picked up 7 ounce because of the dea1. I to1d him (sa1esman) he did not have a prayer. Based on previous va1ue, it is border1ine anyway. We don't need it. 0.k. Item #10: Cheese dog food dinner (we11-known brand) B: W WZWZ This one is another dog treat (showing samp1e) cheese thing. This one I am saying "yes" to according to figures they (sa1esman) showed me. It increased their sa1e by 10 percent on their tota1 sa1es and did not touch the other two, and cheese has been a good mover in dog food. We have 50 to 90 cases and it wi11 be somewhere in between, and I am saying "yes" to it. How 1ong is the a110wance? To November 15th on first order on1y. Wi11 be in around 12/2. We get extended bi11ing on1y on the first order. Their a110wance starts? October 21$t through November 15th. It is ending before their ad program. Yes, but Frenchi is on a11 the time. WZWZ 3 148 What e1se have they got going for them? The cheese, as far as I am concerned. It is not dup1ication? We11, it is not a dup1ication. The cheese has been the main factor, and it is a growing factor in dog food. 50 you recommend this? I am saying "yes." 0.k. Item #14: Cat 1itter (we11-known brand) B: B: M: we had this cat 1itter for four months, and we are se11ing on an average 50 to 55 cases a week, and then we rep1aced it with Corky (1esser known brand), which is se11ing we11 and we are making more money. So I am saying "no." You don't need two? Yes. 0.k. Item #15: CompJete 1ine of househo1d c1eaner (private 1abe1) B: This is a comp1ete 1ine of househo1d c1eaner, waxes, and a thing with no advertising behind it with a Stewart brand, the name, I never heard of. They are doing nothing to se11 it. Nothing? No. And the pricing is not that great. I am saying "no." They are crazy. Item #16: Baby formu1a, iron fortified (1itt1e-known brand) B: This here is a new type of baby formu1a (showing samp1e). It is new to this market. This is the picture (showing picture). It is in some of the drug stores. I went and asked Dennis how it 149 so1d for him. He said he used to se11 equa1 to 30 ounce. Enfami1 with iron, that is, we have about 50 to 55 a week. Those other two we took on, Isomi1 and Prosobbi, this is the one a1ong the 1ine, for peop1e who cannot use mi1k. This is a 1itt1e bit different formu1a. I am saying "yes" to take this in 32 ounce. ’ Why? What are they doing to back it? This is the same way. Samp1es in the doctor's office and in the hospita1. How 1ong has it been in existence? That I don't know. Dennis has experience with it. He has been here over a year. He never had a sing1e customer request on it. No. It is true. A11 I am basing it on is the other two we took on, what happened to those. They were not the rea1 formu1a (Isomi1 and Prosobbi). I think you are wrong, but if you want to, it is 0.k. I think you are wrong. It is 1ike we need a ho1e in the head. Take it if you want to. I am not that strong on it, but just based on what happened to the other two. Very 1imited advertising? Right. A11 they are doing is the samp1ing through doctors. They have been doing that for a number of years. Have you ever seen one request? No, I have not. If you want to take it that wi11 fu1fi11 the same need. If you want to, take it. (Interrupting.) No. It is not that great. 150 Item #18: Line of dog foods (brand not we11 known) B: They have this in a11 varieties, avai1ab1e in any way you want, Dog-Burger, Ken-L-Ration. They have in a11 varieties 1ike Genera1 Foods does. They are comparab1e to private 1abe1 pricing, 1ike we have in Corky--$8.73. What is the advantage of this product? There is no advantage that I can see, and the peop1e who are buying this kind of product are not buying cheaper stuff. I can't understand. We11, on Corky Burger that we have at this price, we are se11ing 40 cases a week. Whereas on any of the other ones, Ken-L-Ration, a General Foods product, that is we11 over 100 [cases per week]. Let us take a package of Corky Burger and 100k at it in comparison to this. What we are saying, that the prob1em with Corky Burger is the co1or. Take a 100k at Corky Burger and 100k at other nationa1 brands, there is a difference in coIor, and watch for it. I wi11 get one and 100k at it. (Interrupting.) No one is doing a good job with it. Co1or is the prob1em. 0.k. The prob1em is not the product, it is co1oring. You're saying this is the same price as the private 1abe1. Then what is the advantage of making a change? 00 you? No. Un1ess they can't correct the co1oring prob1em, this then does not have the same prob1em. You don't see any reason to change, do you? No. I got a11 kinds of them. I wi11 ho1d this unti1 we make a decision on that order, then change. It is an open dea1, anytime you buy. Is it a permanent thing? Yeah. 151 Item #19: Oven c1eaner (we11-known brand) B: ZWZW This one here is Brand X oven c1eaner. Church and Dwight, the one we have, they cou1d not supp1y. They sti11 can't supp1y that size. I am saying "no" because they are saying buy the sma11er size, and we have got that. The sma11er size does not se11 as we11, and I am saying "no.“ 0.k., but I disagree with you. You do? Yeah. I don't disagree with you about the fact that a 1arger size may se11 better, but this item is doing a rea1 good job, and we have some requests. So, if we can't get a bigger size, we se11 the sma11er size, so that we don't at 1east chase the customers away. When the bigger size becomes avai1ab1e, then we wi11 trade, and I wi11 take this. So you want me to rep1ace it? Rep1ace what? (Interrupting.) Or add? Add. You don't rep1ace anything. Item #20: Tub and ti1e c1eaner (fami1iar brand) B M B M: B M This is one tub and ti1e c1eaner. Price is same as Lyso1. They have not fina1ized their ad program. No. Open dea1 is good for 60 days? Yeah. It is open dea1. It is good any time. 0.k. Take a 100k at it Tater. 152 Item #21: Eggif1avored dog food (we11-known brand) 0030:1300sz What other decisions are pending? This Brand X burger (dog food), whether to take on the egg or not. What do you recommend? I am saying "yes." Is that brand ho1ding its own? Yes. Fine. The dog foods are just . . . I don't know . . . room is not there, but everything says they are se11ing more a11 the time. Fine. Item #22: Orange drink (concentrated) (fair1y we11-known brand) B: It is a better va1ue than private 1abe1. It seems a good product for the price. It tastes pretty good. With dea1 34 cents a can. What is the freight rate per cwt from Wisconsin p1ant? I don't know. Find out. You said De1monte has higher juice content. Even if De1monte has same juice content, do you sti11 think you need it, even if you have to pay penny and a ha1f more for De1monte? It is not necessari1y the same items because De1monte is pineapp1e orange. You are right. Do you have a price on De1monte orange drink? I have never seen one. There is one. Find out. It probab1y or shou1d be on the same bu11etin. Find out. Because if for a moment, if De1monte orange drink is the same price as pineapp1e orange, then this is no va1ue. Don't assume. Ask them. If De1monte has it for a penny or penny and a ha1f more, we wou1d rather have that. If De1monte does not have it, then it is a different story. I wi11 check on it and get back to you today. 153 Item #25: G1aze (unknown brand) B: This is a product which was presented before. Like to see it merchandised as fruit comp1ement. What is it? It is a g1aze. What is a gIaze? Simi1ar to pudding, a1so used in pie fi11ing. Some kind of pudding. Can combine it with any fresh fruit. Cou1d be used as ice cream topping, on toast, who1e gamut, mi1k shake and so on. Do we have interest in it? Yeah. I think it cou1d be a good item. What does it do? It is a dog (emphasizing). Every g1aze item has been a dog. When I asked you the question "what it is used for," you are trying to exp1ain it to me, then how does the customer know? Have they test-marketed this? No. What are they doing to se11 this? Nothing (answering himse1f). What have they got going for them? Let me say that I ta1ked to Joe (1oca1 distributor), which is why I fe1t it to be a good item during the spring season. He said they had a 1ot of demand in spring season. How much is a 1ot? And you are ta1king certain time of the year, and how much is a 1ot? He (Joe) is ta1king about 50 to 60 cases a week. He can have it. You have nothing going for you and nothing to prese11 the item. Every gIaze item in the past has been a dog, and if you 100k at it the customer does not even know what it is and what they do with it. It exp1ains it on the back. They [customer] are not going to pick it up to 100k at the back. What are they doing to educate the customer? Big dea1. My gut fee1ing is this item might at best se11 5 cases a week. That is, WZWZW 154 if it is hot. I am ta1king 52 weeks a year. Have they got the test market resu1ts? No. Let someone e1se be the guinea pig. That is a dog of dogs. 0.k. Every one of their items is a dog. I thought the peop1e cou1d use it with some kind of canned fruit or fresh fruit. It wou1d be a natura1 tie-in. That is a11. You may be right. But in the 1ast 500 years there has not been such a product, and no one asked for it. Why do they make it then? They are crazy. They may be right, we have been wrong before, but I rather have somebody e1se be the guinea pig. The other thing you are te11ing me, it is a seasona1, and if it ties in with possib1y fresh fruit and when fresh fruit is not around, what are you going to use it for? You are te11ing me, it has very 1imited use, so seasona1ity is an important factor. If it is that high1y seasona1, why carry it 52 weeks a year? Item #28: Mixed veggtab1es (cut potatoes and beans) (brand re1ative1y B: M: unknown) Here is cut beans and potatoes from (Company X). What do you think? As I started to say, the more I thought about it, it might not be that bad an idea. Peop1e do have potatoes and beans with one mea1 even though they are not norma11y mixed. At 28 cents, we can put it at same price as De1monte's green beans or De1monte's potatoes. What about potato sa1es? Did you ask him? He has Other items and the thing to do is this. You don't have experience with it do you? No, I don't. 0.k. I don't have experience with it. How in the he11 are you going to find out what to expect from the sa1e? 30030on 155 No. You have to ask him. He does not rea11y have that much experience with this either in our marketp1ace. When you ask the guy, you ask him how this item se11s in comparison to some other item you carry from them, and norma11y you get the right answer. 0.k. Now, you have something e1se here, which te11$ you something: who does it appea1 to? We11, someone on the ethnic side, I wou1d think. Which one? The coIored trade or southern trade. Is it [our firm's] type item? No. Right. Now, 1et me say this, that our stores don't have the c1iente1e for that. We have a coup1e of stores which may have a c1iente1e that might warrant this. Ninety-five percent of our stores do not want that type of item. We have few stores that might se11 this item. How much is he se11ing? Not much. Does he have a track record? No. 0.k. (emphasizing). Then 1et someone e1se be the guinea pig. Every item we have of this type is a very poor se11ing item. Why get excited about this product? I am not excited about this. I was going on the premise, it is mixed item. There may be an item of this type, which may be good for a 1imited number of stores. We might authorize such an item for a 1imited number of stores. They have no test market resu1ts. They have no track record. Why shou1d you be the guinea pig? And your gut te11s you, or shou1d te11 you, that it does not have a lot of sa1es potentia1. It wi11 be one of the worse se11ing items. If your gut te11$ you it wi11 se11, we11 then it is a different thing, and if your gut te11$ you to be carefu1 then be carefu1 (excited). I wi11 watch for it. 156 When I say gut, it is more than gut. Part of this is experience with simi1ar items. You are not carrying any item simi1ar to that that's doing we11. ' 0.k. Why shou1d this one be different? Particu1ar1y the guy is not doing anything to prese11 this product. You've got everything against you. A1right. Item #29: Cooking oi1, 16 ounce (weI1-known brand) B: Next item is 16 ounce cooking oi1 (Brand X). There is one advantage I see, that is, per ounce basis, it comes out rea1 c1ose to other items, Crisco. In 24 ounce package it is 4 cents per ounce. You can't 100k at this item on a per ounce basis. Why? Now we are getting $1.18 and $1.15, respective1y, from 24 ounce of Crisco and Wesson with a gross margin of 13 percent and 8.5 percent, respective1y. Their saggested retai1 price on this item (16 ounce Brand X) of 89 cents comes out at higher profit. Who does it appea1 to? Appea1s to o1der peop1e, young coup1es, sma11 fami1y. Lot of peop1e are switching to sma11er size because of economy. We have not seen that. Now this one has comp1ete1y different need. I say this has very 1imited appea1. One of the things you to1d me, it se11s ha1f as we11. It may se11 equa11y as we11 because of packaging. Who is the customer? Who is the c1iente1e? I don't know. It might be a good item for sing1e, or in co1ored area. What is his track record? Let it sit on the back burner for the moment and put it side by side with 24 ounce, and see how much is the difference made by size. It is a third 1ess. 157 M: Sometimes it is packaging. It is a third 1ess, but sometimes the packaging makes the difference. The other might 1ook twice as big. Let us 1ook at packaging of both side by side. B: 0.k. M: Get some facts about 24 ounce Mazo1a, because I keep getting demand for 24 ounce Mazo1a or 24 ounce Kraft oi1. They might 100k a1ike to me, but it might not 100k a1ike side by side. B: 0.k. Item #30: Tomato sauce, 29 ounce (we11-known brand) 8: Price is simi1ar to the item we are carrying. We don't need dup1ication. It is a s1eeper item. I am saying "no" to this. M: 0.k. Item #31: Tomato paste, 18 ounce (we11-known brand) B: I don't think we need another paste item. N: You have a number of questions. How does 18 ounce paste se11? Nobody has this item. How do you get information? You don't know how it se11s. Here again is the gut fee1ing. I don't 1ike the brand. I don't 1ike the price. There is a Cadi11ac in this ine. B: That wou1d be the Contadina. M: That is right. Now, this wi11 se11 if there is enough price differentia1. You have to worry about price differentia1. At these prices you are not giving the customer a va1ue, and then you have brand against you. I think they have a good idea but not enough promotion to try to get into this market. Item #32: Barbecue chicken and ribs (we11-known brand) M: What do you recommend? Shou1d pick them up with the advertising they have. 3 Pick up what? on Large chicken and sma11 rib. 3 ZWZWZW 158 I say, why wou1d you take the 1arge chicken versus sma11 chicken? Because of how they Took on the she1f. That has nothing to do with it. Now, you can break the coTor by where you p1ace it. You have 1arge and sma11 Shake 'n' Bake. How do they se11? The sma11 one outse115 the 1arge one. 0.k. Have you taken into consideration the pack? Yeah. Even with pack, sma11er one outseTTS the 1arger. So, why go to the poorer item? The on1y reason I wou1d, because of the break in size. So what. Now, you can break your coTors by p1acement on the she1f. I don't understand. Why take a poor se11ing rather than better se11ing item because of the coTor? I don't disagree with you taking it, but I disagree with you taking this (pointing to 1arger size) over this (sma11er size).' 0.k. Item #33: Roast hash (brand not we11 known) B: M: W3 Here is Brand X roast hash. Again? Yes, we carried this item before. What do you recommend? I don't think we need the item. The on1y thing is that I have to go back on what you have ton me, "to Took at something different in the category," and this is one of a kind. Then pick it up. If you think you can get a case a week per store, pick it up. 0.k. We used to carry it, but the price went sky high; that is basicaTTy why we discontinued it. Everything has gone up. 159 Item #35: Pudding (two new f1avors) (very we11-known brand) 8: Here are two new f1avors of pudding, chocoTate and strawberry. Nut chocoTate is a dog. We don't need dup1ication. But strawberry is the new of everything in the market. I think we shou1d pick it up. Why in addition, why not in Tieu of something? What is the poor item? I am not worried about the dup1ication. Item #36: Line of saTad dressings (brand not very we11 known) 300300300300 WZWZWZ Here is a comp1ete 1ine of saTad dressings. Who is your source of supp1y? Bi11. We carried it once before? Yes. Then why did we discontinue? Poor movement. And de1ivery and service. They never de1ivered. Why now is it going to be different? This is now owned by GSP. They bought them out. 0.k. You had a service prob1em. Are you going to have service prob1ems again? I don't think we wi11 have a service prob1em per se. GSP is pretty reTiabTe. I get from them every two weeks, other products. Who is GSP? KBC (we11-known company). 00 they have TocaT stock? KCB is TocaT. Yes they do. This is comparab1e to Good Seasons? Correct. Good Seasons has taken a price increase. Good Seasons wi11 cost us 21 cents per unit next season. 3 160 What f1avors don't you have? Kraft wi11 be out with theirs. They wi11 make a big push on theirs again too. By the way, this is one with two deaTS. When wi11 Kraft be presenting theirs? This week, probab1y tomorrow. Wait ti11 you hear from Kraft. So we wi11 Took at this next week. Item #37: PickTes (two varieties)(better-known brand) B: (DEW: Sweet cucumber sTices. It is a good buy. Good buy on a dea1? Yes. What about after the dea1? On kosher di11 pickTes, price is too high. Neither one has good va1ue. Yes. They are robbers. Item #38: Instant breakfastg(we11-known brand, Brand X) M: Refresh my memory. How do we price them? What are we getting for them? (Checking.) Brand X 66 cents and Brand Y (aTSo a leading brand) 66 cents. How are they se11ing against each other? Brand X is definiteTy doubTing them [Brand Y]. Seventy-nine cases versus 30. What do you recommend? I say, it is a hard decision to make. I am sure company Y wi11 be back with something. But first decision you have is at the same price. (Interrupting) Brand Y don't mean ***** (anything). W W ZWZWK B: ZWZW 161 Right. That is the first thing you know. 0.k. And the on1y time Brand Y son was when they had a materiaT advantage. So, if Brand Y matches them, they are no good. You are te11ing me that at the same price they don't se11 [Brand Y]. So kiss the Brand Y goodbye. 0.k. Put that in your book so you don't forget. Kiss it goodbye. 0.k. So, picking up the Brand X. We did not say that. I said that just kiss the other (Brand Y) goodbye. Now when are we going to run out of the other (Brand Y)? At that rate of sa1es? Uh huh. Six to eight weeks. Rea11y, rea11y, taking a Tong time. Lowest wi11 be six weeks. Now what are we talking about? He [sa1esman from company X] presented coffee, vani11a, and strawberry fudge. How Tong is the dea1? When does it start. Ask them to extend the date. 50 we are interested in vani11a and chocoTate. It is a rep1acement item, if they extend the date. Get this in writing. D.k. Item #39: White tuna in water (brand not we11 known) B: M: B: We got some good dea1. They are higher than Breast O'Chicken. No bi11 back. Why do we need this? Some stores have done a good job. 162 How many? Two. No. Three. What is the competition doing? You are saying this has meaning on1y on very 1imited store basis. I don't see, why take it on a company basis? Or, why on 1imited store basis? 0.k. Item #41: Barbecue sauce (we11-known brand) B: M: Company X is making a big push. I am saying “no" because there is no va1ue. 0.k. Item #42: Egg noodTe tuna casseroTe (not we11 known brand) ZWZCDZWXWZW Why wou1d the customer buy this? They have advertising. He [sa1esman] says A&P is carrying it. Good for A&P. So the prob1em is that their program ends before they do the prese11. So you have nothing but dog sitting on the she1f there. You don't have a track record to make any decision. (Interrupting) I don't think that 1abe1 is much of an improvement. A11 of them Took 1ike that (pointing to the 1abe1 on the package)? Uh huh. Do you 1ike that package? No. It is horrib1e. What is wrong with this? There is no differentiaT between the packages. What are they se11ing? Brand X, instead of what they are. What is Brand X? 163 8: Right. That is exactTy it. I said the same thing. M: You have to Took at the fine print to see what you are going to buy. You have to Took at the fine print to see what product you are buying. Brand X is not what you are buying. B: We11, that is what you think you are buying but surprises you when you get home. M: You are buying the surprise (Taughter). They are crazy. These are the things which he1ps ki11 them. 8: The on1y successfuT company is the Hamburger HeTper, who p1ays up the name. They are the ones who are successfuT. I can't see why everybody eTSe can't see what they are doing. They p1ay up the name what it is for, that is big 1etters--Hamburger stew. M: Right. They a150 have something eTse going? B: The name Hamburger HeTper. M: First of a11, we know what it impTies, what it is. This is a surprise (emphasizing). (Laughter.) I don't know what we are se11ing, the surprise packages or the product? B: Let it ride for a whiTe? M: OnTy if we get customer's demand. They got everything against them. B: I agree. Item #44: Shrimp B: No va1ue, higher than market, he [sa1esman] knows it. I say "no." M: 0.k. Item #45: DeviTed ham and bacon spreads (foreign brand, re1ative1y TittTe known) B: Denmark items. Both items are at the same price. M: Stay with Brand Y (Teading brand) even though it is sTightTy expensive. 164 Item #48: Soda pop (new brand) B: 3 WZWZW Brand X pop. You are a1ready famiTiar with it, we saw the presentation. They have a number of deaTs, don't they? They have a number of deaTs as far as diet, the sugar, the 28. Now they have come up with a firm advertising schedu1e. What you think of their program? I 1ike it. Tota1 program? Tota1 program, I 1ike it. What do you 1ike about it? They are going to spend a Tot of advertising on it, and their price is right. It is cheaper a11 the way down the 1ine. How much differentiaT between this and Faygo? How much are they going to maintain it? Not what they have but what are they going to maintain? At the presentation they said they are going to maintain what they have--60 percent. What are they going to commit themseTves to? They did not give themseTves a commitment. We do not know whether they are going to have a price advantage. We don't know. They have tentativeTy a good-Tooking advertising campaign. Right. We have no insurance that they wi11 be competitive to Faygo. Now, what do you think Faygo is going to do? Faygo is not going to sit back. They are going to fight 1ike he11. They wi11 bring the price back to Brand X and wi11 have a big advertising campaign. Now, if you are a customer which one wou1d you buy at the same price? 3 W3 CDZWZW 165 Faygo, because you are a1ready estab1ished and you know what the product tastes 1ike. So that is one strike against them. What eTse do you 1ike about that program? What eTse is good about this program? Other than price and advertising, I don't see anything. What do you mean about advertising? You are ta1king about the personaTity. They got AT KaTine that. . . If they have personaTity that might give them some impetus. Right. How do you 1ike their packaging? Their packaging is fairTy we11. I consider it good. As good as Faygo? I wi11 say Faygo is better. What eTse is good? Nothing that I can see. What eTse is bad about the program? Bad part is that they are coming into a new territory and that is going to hurt. Now, what wou1d interest us? What was one of the objections I raised? One of the objections was that the advertising was going to start after the intro. 0.k. One thing is improved, instead of a tentative schedu1e, they put it in concrete. So that has improved. We don't 1ike deaTs that end before the preseTTing. They have to be running simuTtaneousTy. Now you say that they have a nice advertising campaign. 0.k. We don't know what Faygo is going to counteract with and primariTy the aspect of personaTity that might give them some impetus. True. CD WZWZ 166 And they have got a coupon campaign p1anned, which might be a 1itt1e bit of b1ackmai1. So we might not have much choice. We sti11 can work out the best conditions, and we don't have the best conditions. True. I wi11 work on it. What wou1d you take? Sugar cans. Why? What wou1d you price them at? 17 cents. Why? What do they cost? Why price at 17 cents? Because, we sti11 have a markup, markup I beTieve is in the vicinity of 21 to 22 percent. What wou1d it do to your own 1abe1? Ah, I see what you are getting to. Because our own 1abe1, I beTieve, it is higher than that. What wou1d you do to your own 1abe1? Shoot it right in the ass. So, why wou1d you want to do that? ' Cou1d not. It had to be priced at 21 cents and at 21 cents it won't se11. Item #49: Dry cocktaiT mixes (better-known brand, Brand X) 8: Here is an item more expensive than Brand Y (a Teading brand) that we are carrying at the present time. Brand Y is a ten-pack box, and Brand X is an eight-pack box. Now, right off the bat, you are ta1king about an item that is not as 1arge and is more expensive than the one we are carrying now. We have the advantage because the Brand Y we carry, no one carries that. What kind of an advantage is that? Peop1e buy this product because of price? No. Peop1e buy it on "do they like it or do they not." 167 M: Right. Now you are price oriented. StrictTy rice oriented. Peop1e who are buying are not buying because 0 price. B: True. They want a product, period. M: They want a product, and they want an acceptabTe product, something they are happy with. Are you happy with Brand Y? Are you happy with the movement? 8: No. The movement is very, very weak. There is no advertising. Ah, there is no advertising that I can see forthcoming, whereas in Brand X, there is advertising on newspaper and TV. M: What do you recommend? B: To switch over f1avor by f1avor graduaTTy to Brand X. We can retai1 for 99 cents. We get markup of 36 percent. Competition wi11 1et us do it, because Kroger is carrying Brand X and getting $1.15, A&P is getting 93 cents. How? 1'11 never know. I think they [A&P] can get a Tot more. M: What we got to Toose? B: Not very much? M: We got nothing to Toose and everything to gain, if we switch to Brand X. B: What I am recommending is to phase out Brand Y. Item #51: Candy (watermeTons, cherry, Temon drops, we11-known brand) B: We had requests for watermeTons. Packaging is poor. M: Don't 1ike the odds but pick it up. Item #52: Candy (chicken bones and meTTow mints, better-known brand) B: We had this. Was a very sTow mover. I am saying "no." M: 0.k. Item #53: Lemonade mix (new brand from a very we11-known company) B: Poor introductory offer. TriaT size 25 cents. Cost 13 cents. 168 M: TriaT size costs more than the economy size. Twenty-five cents for triaT size versus about $2.00 for economy, which is ten times the tria1 size. That is the first time I have seen the triaT size more than the economy size. Not proper tria1 size. They are out of their minds. Pick up the economy size. Item #54: Candies (yery_we11-known brand) B: Don't want dup1ication. M: 0.k. Item #56: Canned pretzeT (new brand from a very we11-known company) B: It is unique item. It is an item 1ike PringTes. They fee1 that this item wi11 se11 about one-third what we are se11ing in PringTe. I personaTTy don't see why peop1e buy this. M: I think they have a he11 of an idea. B: The advertising is getting on after the intro. I wi11 try to get the intro. dea1 extended. I wi11 hon it off. M: As a matter of principTe we shou1d hon it. Item #57: Peanut butter and cheese cracker, six packs (we11-known brand) B: The price is high. I am saying "no." M: 0.k. Item #58: Smoked f1avored aTmonds (not we11-known brand) B: It is nice item. Don't expect much movement. This is one of a kind. RetaiT is 97 cents. M: Even though the movement is very 1itt1e, but it is one of a kind. Take it. 169 Item #59: Soup, new f1avor (we11-known brand) 8: Unique item. Different. We have no interest. M: What is track item? B: Very poor, which means it is weak item. 0n1y Kroger carried it. They are discontinuing it. M: 0.k. Pass it. 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Buyer Purchasing Criteria Importance Scores (An Eastern Supermarket Chain)a Buyers Criterion Numberb A B c D E F G H I J K L 1 9 8 9 9 8 9 7 9 9 9 7 2 8 4 8 8 6 4 4 9 3 7 3 3 9 7 6 9 7 NA 7 5 NA 5 9 8 4 7 4 6 9 8 8 3 8 5 5 6 5 5 9 7 7 9 9 8 8 7 9 7 8 7 6 5 5 6 8 7 5 NA 3 5 5 6 5 7 9 8 8 9 7 7 9 4 9 5 9 5 8 6 4 5 5 4 6 9 1 9 9 8 4 9 9 7 9 9 7 8 8 9 9 9 4 1o 6 7 9 9 5 8 9 6 9 5 7 4 11 9 7 6 9 8 5 NA 8 9 6 8 2 12 9 7 7 5 8 8 7 8 9 9 8 8 13 9 7 9 8 8 8 9 8 9 7 9 5 14 6 7 8 8 8 8 8 6 5 5 8 5 15 6 5 7 9 7 8 3 7 9 1 5 5 16 5 6 5 9 7 6 9 5 9 7 8 6 17 5 7 8 9 7 4 6 5 5 9 8 6 18 5 6 6 8 6 NA 3 7 5 5 7 7 aImportance ratings on 1-9 sca1e ranging from unimportant to very important. The criteria are from Robert W. Sweitzer, "The BehavioraT Factors Affecting the F10w of Information in the Buyer-SeTTer Dyad" (Ph.D. dissertation, Michigan State University, 1974). bSee TabTe 01. 172 173 TabTe E2. Ranks of Buyer's Purchasing Criteria Based on Mean Importance Scores (An Eastern Supermarket Chain)a Mean (Eastern Criterion Supermarket Standard Numberb RangeC Chain) Deviation Variance 1 7-9 8.50 0.76 0.58 2 3-9 5.83 2.08 4.31 3 5-9 7.20 1.47 2.16 4 3-9 6.17 1.77 3.14 5 7-9 7.92 0.86 0.74 6 3-8 5.45 1.23 1.52 7 4—9 7.42 1.75 3.08 8 1-9 5.83 2.41 5.81 9 4-9 8.00 1.41 2.00 10 4-9 7.00 1.73 3.00 11 2-9 7.00 2.04 4.18 12 5-9 7.75 0.99 0.98 13 5-9 8.00 1.15 1.33 14 5-8 6.83 1.26 1.59 15 1-9 6.00 2.27 5.17 16 5-9 6.83 1.52 2.31 17 4-9 6.58 1.61 2.58 18 3-8 5.91 1.31 1.72 aAnaTysis by the researcher of data coTTected by Joseph W. Thompson, Professor of Marketing, Department of Marketing and Trans- portation Administration, Michigan State University, June 1975. bThe criteria are from Robert W. Sweitzer, "The BehavioraT Factors Affecting the F10w of Information in the Buyer-Se11er Dyad" (Ph.D. dissertation, Michigan State University, 1974). CImportance ratings on 1-9 sca1e ranging from unimportant to very important. APPENDIX F QUESTIONNAIRE ON NEW PRODUCT DECISION CRITERIA APPENDIX F QUESTIONNAIRE ON NEW PRODUCT DECISION CRITERIA MICHIGAN STATE UNIVERSITY RESEARCH ON NEW PRODUCT DECISION-MAKING CRITERIA Listed be10w are fourteen different criteria which are most often used in making buying decisions for new products. PTease circ1e the number on the foTTowing nine-point sca1e that best indicates, in your opinion, the 1eve1 of importance of each criterion in se1ecting new products in your area. In case you feeT that the Tist be10w Teft out an important criteria, which you think shou1d be inc1uded, pTease add at the end in the space provided (see criterion 15). ****** 1. SaTes potentiaT of the item: determined by the case movement of simi1ar item, suppTier's information, test market resu1ts, or by some other method. 1 2 3 4 5 6 7 8 9 :— l J L J] _L J L :1. unimportant moderateTy very important important 2. Manufacturer/suppTier's backing (amount of preseTTing by the manu- facturer): inc1udes advertising and promotion (especiaTTy in the TocaT market), evidence of consumer acceptance (such as test market resu1ts), samp1ing, coupons, deaTs to consumers, etc. 174 175 Introductory terms and a110wances: inc1udes deaTs, advertising and disp1ay a110wances, performance requirements, c00perative advertis- ing, extended bi11ings, method of payment of a110wances (such as off invoice, bi11 back, etc.) T 2 3 4 5 6 7 8 9 I J J J J L J l J ' 1 1 t‘ unimportant moderateTy very important important Manufacturer's coordination of promotion and advertising programs with diEtribution on the product. OveraTT potentiaT profit (in doTTars) of the product: inc1udes gross margin, price of the product after deaTs and/or a110wances. 1 2 3 4 5 6 7 8 9 1 I 1 JJ_ J J_ JJ J OJ PotentiaT va1ue to consumer compared to simiTar items after a110wing for the difference in 1abe1 (private versus nationa1 brand): the customer is generaTTy wiTTing to pay more for the nationa1 brand, compared to private Tabe1. 1 2 3 4 5 6 7 8 9 l l J. I L I J J 1 Requests for the product by the store managers based on customer's requests. 1 2 3 4 5 6 7 8 9 l__ J, I L 1 l J AL Avoidance of dngication of products perceived to be very simiTar to the one carried now. 1 2 3 4 5 6 7 8 9 l J_ J I_ 1 L JJ 1 1 10. 11. 12. 13. 14. 15. 176 SheTf space requirements. 1 2 3 4 5 6 7 8 9 I I l l— L J L J r r I unimportant moderateTy very important important SeasonaTity of product sa1e. E- 1 2 3 4 5 6 7 8 9 E l 1 1 L. J__ J_ J J. J 1 OveraTTgpackagjng: inc1udes package size, coTors, copy, 1ayout, etc. TATso inc1udes case size and open stock versus cut case. F1 1 2 3 4 5 6 7 8 9 l J_ J J. J 1 J I Uniqueness of the product: one of a kind. 1 2 3 4 5 6 7 8 9 1 J, I 1 1 1 J 1_ 1 Service from the suppTier: inc1udes foTTow up of orders, de1iveries, payment of a110wances, information on competitive products, informa- tion on TocaT market, store visits, setting up of disp1ays, product quaTity in terms of specification, etc. LL 1 l 1 4L JL .J__ 1 J fi PotentiaT move of manufacturer se11ing simiTar item (competitive move). 1 2 3 4 5 6 7 8 9 l l l J L I I I J 1 2 3 4 5 6 7 8 9 I 1 IIIII 11.!‘1'i1 APPENDIX G NEW PRODUCT INFORMATION AND BUYER'S APPROVAL FORM OF THE SUPERMARKET CHAIN STUDIED APPENDIX G NEW OF THE SUPERMARKET CHAIN STUDIED '00: PRODUCT INFORMATION AND BUYER'S APPROVAL FORM Irma - uni or "I no In. ‘Th I "II In. in an cu. an at 1 BED. I "new Lulonmr - fl C0.‘ muucnul n‘nuo Cl" a Gun Juno fin-cm. Mun: unuume In J mum 0111 A "In hon “mu an: In: nun-u l on Mun-n an mm: an: en: fin lions am an . u an: GUARANTEES [gram 1 Dean m." u tannin] I noun Mom or unm" l we“ 4 Or an! rv hues! hum Unuuw lacuna 0': Item Tum-u In 1h“! Mum» Hum Tum; 0am to cum" 0'32.”- “'53.. .. Dunn “Louie! Mm Lntu Mm" Inn-n IIIII' “III ILLMICI PIMO1DIIt I On“ lino-veto" Ono moan-1m: V“ m ”Mfl's WIN“ DATES “EMUUII' 015M" “I.” A103 run: afoul Dene-nu M may tnuuu Diem Inna i.v. a Innv [7310" Sun Hung-n _, tn mum“ anon m D 0"“ m0 Dunn Don-Inn"! Acumen he. 111.1011 mums no.1 3mm not: H" ""':. n t ' ' Snow ne- lug. Pac. SHI PPINC INFORMATION now Sumo Pom M 0m" Hum/mI/umout noun 0. cum" tune or um!" I! Wanna" no in an to nu 0 ms nun-canon: um MS a o I. I A on 1 1011.th mu: Cut A STORE HANDELINC In. an" en“ 3901 you aunt Pam m [7 lo [7ch filo [ an “on Tue-mun II .ccunl an cunt": VENDOR PLEASE NOTE: 0111qu um m Pic-nu. Hen-noun "I :3": I Gnu amuse flan [T’nfllov An. n1. Pnnuun. nuuum no Oren luau-cc no Iucnu 1.!" 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