Strategic Manufacturer Response to a Dominant Retailer

Geylani, Tansev; Dukes, Anthony J.; Srinivasan, Kannan

doi:10.1287/mksc.1060.0239

Cited by 175 publications

(93 citation statements)

References 28 publications

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“…A major result is that large manufacturers were found to be the "sustainability performance champions". This presents a key contribution to the current marketing literature considering that most marketing researchers have noted the powerful role of retailers in most supply chains (see Kumar 1996;Kadiyali, et al 2000;Geylani, et al 2007). Hence, it may have been expected that retailers will command a key role in the Greek dairy chain too by being the "champions" in relation to sustainability implementation; instead, we noted that large manufacturers lead most sustainability initiatives (e.g.…”

Section: Conclusion Managerial Implications and Future Researchmentioning

confidence: 90%

Examining sustainability performance in the supply chain: The case of the Greek dairy sector

Bourlakis

Maglaras

Gallear

et al. 2014

Industrial Marketing Management

107

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Section: Conclusion Managerial Implications and Future Researchmentioning

confidence: 90%

Examining sustainability performance in the supply chain: The case of the Greek dairy sector

Bourlakis

Maglaras

Gallear

et al. 2014

Industrial Marketing Management

107

View full text Add to dashboard Cite

“…Examples can be found in Iyer and Villas-Boas [35], Inderst and Wey [36], etc. To model the situation of a power retailer, there are some papers that consider retailer Stackelberg games, such as Dukes et al [37], Geylani et al [38], Raju and Zhang [39], and Wang et al [40].…”

Section: Introductionmentioning

confidence: 99%

Economic and Environmental Performance of Fashion Supply Chain: The Joint Effect of Power Structure and Sustainable Investment

2017

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Fashion supply chain members now search for trade-offs between sustainable investment and the related incentives, such as savings on environmental taxes and gains in incremental demands. To evaluate the economic and environmental performance of sustainable investment from a power perspective, we develop an analytical model to study a two-echelon sustainable supply chain consisting of one retailer and one manufacturer with three different power structures. We derive the optimal solutions for various cases associated with different supply chain power structures and sustainable investors. Though it is beneficial for both the manufacturer and retailer to make sustainable investment, they often utilize high power to gain economic benefit with less sustainable investment. Interestingly, the follower with less supply chain power has more incentive to make a sustainable effort to achieve a higher profit. The optimal amount of sustainable investment in the apparel manufacturer investment case is greater than that in the retailer investment case in most scenarios.

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“…In a bargaining model, Dukes, Gal-Or, and Srinivasan (2006) show that manufacturers may bene¯t from the increase in retailer dominance since channel e±ciency can improve with dominant retailers gaining cost advantages. Geylani, Dukes, and Srinivasan (2005) show that a manufacturer has an incentive to engage in joint promotions and advertising with weaker retailers since the manufacturer gets a higher margin with weaker retailers than with dominant retailers, who has the power to dictate the wholesale price.…”

Section: The Modelmentioning

confidence: 99%

A Price Discrimination Model of Trade Promotions

2008

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Critics have long faulted the wide-spread practice of trade promotions as wasteful. It has been estimated that this practice adds up to $100 billion worth of inventory to the distribution system. Yet, the practice continues. In this paper, we propose a price discrimination model of trade promotions. We show that in a distribution channel characterized by a dominant retailer, a manufacturer has incentives to price discriminate between the dominant retailer and smaller independents. While offering all retailers the same pricing policy, price discrimination can be implemented through trade promotions because they induce different inventoryordering behaviors on the part of retailers.Differences in inventory holding costs have been shown to be an important determinant of consumer promotions. Our analysis suggests that differences in holding costs are also potentially an important driver for the use of trade promotions. The implications from our model explain a number of anecdotal and/or empirically observed puzzles about how trade promotions are practiced. For example, our analysis explains why chain stores welcome trade promotions but independents do not. Our analysis outlines implications for managing trade promotions. A Price Discrimination Model of Trade Promotions AbstractCritics have long faulted the wide-spread practice of trade promotions as wasteful. It has been estimated that this practice adds up to $100 billion worth of inventory to the distribution system. Yet the practice continues. In this paper, we propose a price-discrimination model of trade promotions. We show that in a distribution channel characterized by a dominant retailer, a manufacturer has incentives to price-discriminate between the dominant retailer and smaller independents. While o®ering all retailers the same pricing policy, price-discrimination can be implemented through trade promotions as trade promotions induce di®erent inventory-ordering behaviors on the part of retailers.Di®erences in inventory holding costs have been shown to be an important determinant of consumer promotions. Our analysis suggests that di®erences in holding costs are also potentially an important driver for the use of trade promotions. The implications from our model explain a number of anecdotal and/or empirically observed puzzles about how trade promotions are practiced. For example, our analysis explains why chain stores welcome trade promotions but independents do not. Our analysis outlines implications for managing trade promotions.

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Strategic Manufacturer Response to a Dominant Retailer

Cited by 175 publications

References 28 publications

Examining sustainability performance in the supply chain: The case of the Greek dairy sector

Examining sustainability performance in the supply chain: The case of the Greek dairy sector

Economic and Environmental Performance of Fashion Supply Chain: The Joint Effect of Power Structure and Sustainable Investment

A Price Discrimination Model of Trade Promotions

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