Internal organization and management of fresh produce marketing in retail supermarket chains: implications for marketing specialty produce

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Virginia Tech

The purpose of this research is to describe the management of the fresh produce marketing system in retail supermarket chains and to assess the marketing opportunities for specialty produce therein. Results provide new growers with knowledge of the retail industry necessary to establish good relationships with retailers.

A selective sample of 17 retail supermarket chains in the Virginia area were identified for inclusion in the study. Face-to-face interviews were conducted with the person most responsible for produce merchandising within each chain. Interviewees were asked to discuss management positions and operations and produce procurement and merchandising practices.

Results of the interviews provided for a generalization of management structures within supermarket chains. Distribution of strategic responsibilities within the different structures are described. Product movement is found to be the primary criterion used to measure the success of a produce item. Firm image is found to be important in explaining a firm's space allocation and other merchandising decisions. Full service supermarket chains carry the greatest variety of produce, but may be less likely to work with small growers. A core of 40 specialty items are carried by two-thirds of the chains in the study. Items that can be grown in Virginia are identified.

Results suggest that marketing niches exist for innovative growers who are willing to place special emphasis on high quality and service to retailers. Most direct relationships between growers and retailers are initiated by growers. An algorithm for produce market identification is presented.