The Negative Consequences of Product Removal : A Dual-Perspective from Manufacturer and Retailer

When a product disappears from the store, one usually assumes the manufacturer has decided to cease production, which is commonly referred to as product elimination. With the increasing power retailers have on product line-ups, however, product removal decision could be entirely driven by retailers’ category management. A product may be delisted by one retailer but still carried by other retailers. While the bulk of current research in marketing has focused on product development, and its positive impacts on market performance, research on product removal and its cascading harm on brands has been scarce. In this research, the authors propose a dual-perspective from manufacturers’ and retailers’ points of view and use both aggregate and individual level analysis to empirically quantify the differential impacts of product elimination and product delisting on brand performance. Overall, product elimination shows an insignificant effect; while product delisting has a negative and significant effect. The results also exhibit that the negative effect is stronger for heavy users of the removed products. These results contribute to the literature by highlighting the detrimental consequences product delisting has on brands. Manufacturers should be alert of retailers’ delisting requests and prepare mitigation solutions to overcome the negative influence on their brands