Consumer response to the preferred brand out-of-stock situation
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The consumer-products industry has introduced a growing number of brand extensions in the last few years. At the same time, retailers who set out to cut slower-selling brands allowed more shelf space to their private-label brands is this freedom of choice that enhances retailer power. The purpose of this study was to design an experiment which simulated O'Reilly's acid test of brand loyalty mentioned in the opening quote to this paper. By organizing a true out-of-stock experiment (OOS) of the consumers preferred brand, the article determines whether consumers were willing to "walk out of the store to buy [their preferred brand] elsewhere or switch to an alternative product". Insights into these behaviors might provide arguments that retailers use during negotiations with the manufacturer about shelf allocations. The data from this study showed that almost 45 percent of the consumers were not willing to switch brands when their preferred brand was OOS: they either switched stores or postponed the purchase. These OOS responses differed substantially per brand.