On the Competitive and Collaborative Implications of Category Captainship

Category captainship (CC) is a retailing practice wherein a retailer collaborates with one of the manufacturers in a product category (referred to as the captain) to develop and implement a category management strategy. Although CC has been studied using both theoretical models and surveys, empirical evidence on the benefits and drawbacks of CC is scarce. The authors use a unique data set collected during a CC implementation to empirically examine the impact of CC on the retailer, the captain, and the other manufacturers in the category. The authors find that both the retailer's private label and the captain benefit from CC because of pricing and assortment changes. They also find that some competing manufacturers benefit from CC while others suffer. Specifically, the manufacturers that closely compete with the captain benefit, whereas the manufacturers that are in close competition with the private label suffer because the retailer protects its private label. The authors show that category sales would have been higher if the retailer had not protected its private label. This study sheds light on how joint consideration of assortment and pricing, the presence of a private label, and product characteristics may influence the outcomes of CC implementations.