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ABSTRACT
Objectives. This study compared the incentive payments for premium shelf space and discounts on volume purchases paid to retailers by 5 types of companies.
Methods. Merchants were interviewed at 108 randomly selected small retail outlets that sel tobacco in Snata Clara County, California.
Results. significantly more retailers reported receiving slotting/display allowances for tobacco (62.4%) than for any other product type. An average store participating in a retailer incentive program received aproximately $3157 annually from all sampled product types, of which approximately $2462 (78%) came from tobacco companies.
Conclusions. Future research should assess the impact of tobacco store marketing and sales practices of retailers. (Am J Public Health. 1999;89:1564-1566)
The tobacco industry has shifted away from traditional forms of advertising toward focused retailer incentive programs. In 1996, traditional venues such as magazines, newspapers, and outdoor advertisements consumed only 11% of the tobacco industry's $5.1 billion advertising budget, while 47% of the budget ($2.4 billion) went into retailer incentive programs that included promotional allowances and point-of-sale marketing programs.1
Many industries, including tobacco companies, use dual strategies to maximize total sales by pulling or encouraging consumers to buy a product while using retailer stategies to push or sell a product through a distribution channel.2 Consumer-based pull strategies include advertising, coupons, 2-for-1 sales, and gifts with purchase. Retailer-based push strategies include payments for prime shelf space, volume discounts, and in-store displays that are designed to motivate retailers to create in-store merchandising environments that maximize sales.2
Few systematic data are available on retailer incentive programs.3 Two studies of tobacco advertising in stores revealed that about 50% to 60% received monetary incentives from tobacco companies to display advertisements, but neither the types nor the amounts of monetary incentives were identified.45 We found no other studies that examined this issue. Given the magnitude of tobacco marketing expenditures in retail outlets, this study was designed to ascertain the types and amounts of incentives received by local tobacco retailers compared with those received for other commonly sold products.
Methods Design
A cross-sectional survey was designed to investigate the types of retailer incentive programs offered in 5 product categories to small retail outlets in 1 urban county in California. Categories other than tobacco were included to provide comparative data, as well as...