DEVELOPMENT OF A THEORY OF RETAILER RESPONSE TO MANUFACTURERS EVERYDAY LOW-COST PROGRAMS

Manufacturers' everyday low cost (EDLC) programs have been prescribed as a means of eliminating inefficiencies associated with trade deals. However, the long-term success of EDLC programs is largely dependent u pon favorable responses from retailers. In an effort to investigate re tailer response to manufacturers' EDLC programs, in-depth interviews w ere conducted with executives of retail and manufacturing firms. Data analysis was guided by Glaser and Strauss' grounded theory approach. T hese efforts resulted in theory detailing antecedents and consequences of the focal construct, ''retailer attitude toward the EDLC program.' ' Research findings indicate that retailers' attitudes toward EDLC pro grams are based on an assessment of the compatibility between the prog ram and their marketing environment. Several factors including retaile r characteristics (e.g., perceived weakness in buying power, commitmen t to forward buying) and program characteristics (e.g., whether progra m is optional, product storage costs) were found to influence retailer s' assessments of program/environment compatibility and in turn their attitudes reward EDLC programs. Whether retailers' attitudes toward ED LC programs led to supportive, nonsupportive, or adaptive behaviors wa s found to be contingent upon the relative dependence existing within the channel relationship. The implications of these findings on the de velopment and diffusion of pricing/promotion initiatives are discussed .