The Competitive Consequences of Using a Category Captain Sanjay K. Dhar Jagmohan S. Raju Upender Subramanian Yusong Wang1 [Under Review at Management Science] 1 Sanjay K. Dhar is James H. Lorie Professor of Marketing, Graduate School of Business, University of Chicago, Chicago, IL 60637 (Phone: (773) 702-3005, Fax: (773) 702-0458, Email:
[email protected]). Jagmohan S. Raju is Joseph J. Aresty Professor of Marketing, The Wharton School, University of Pennsylvania, Philadelphia, PA 19104 (Phone: (215) 898-1114, Fax: (215) 898-2534, E-mail:
[email protected]). Upender Subramanian is a doctoral candidate in Marketing, The Wharton School, University of Pennsylvania, Philadelphia, PA 19104 (Phone: (215) 898-5252, Fax: (215) 898-2534, E-mail:
[email protected]). Yusong Wang is Assistant Professor of Marketing, School of Management, Fudan University, P.R. China. (Email:
[email protected]). Correspondence about the paper should be addresed to
[email protected]. The Competitive Consequences of Using a Category Captain Abstract Many retailers these days designate a national brand manufacturer as a "category captain" to help them manage the entire category. The category captain is involved in decisions that a¤ect not only its own brands, but also those of its rivals. We analyze a setting where two manufacturers supply to a single retailer, and examine the competitive consequences when the category captain is engaged in one of the following three activities: (1) provision of demand enhancing services (2) sharing of superior demand information, and (3) collaborating in pricing decisions. Contrary to concerns raised in previous literature, we …nd that a category captain’s involve- ment in pricing decisions or providing demand enhancing services does not necessarily lead to undesirable outcomes: consumers bene…t from pricing collaboration and, under some conditions, the rival manufacturer bene…ts from demand enhancing services even when these services favor the category captain’s brand at the expense of the rival’s.