The Power of Innovativeness in Manufacturer–Retailer Relationships

ABSTRACT

Purpose: Retailers often challenge manufacturers through aggressive store brand policies and severe listing constraints. This study investigates manufacturer innovativeness as a managerial lever to shift the power balance between manufacturers and retailers.

Methodology/approach: Using data from 277 senior managers of Swiss and German consumer goods manufacturers and analyzing these data with structural equation modelling, the authors test hypotheses about the impact of manufacturer innovativeness on manufacturer–retailer relationship characteristics (i.e., retailer dependency, store brand aggressiveness, and listing constraints).

Findings: The study demonstrates that manufacturer innovativeness enhances retailer dependency, which in turn positively affects overall manufacturer performance. This relationship can be explained further: By increasing retailer dependency, manufacturers suppress retailers’ store brand aggressiveness and attenuate retailers’ listing constraints. Store brand aggressiveness affects overall manufacturer performance through listing constraints.

Research implications: Identifying levers such as innovativeness that assist manufacturers in fostering their power over retailers provides a new mode for understanding how manufacturers can influence the balance of power between manufacturers and retailers. The study provides support for the approach/inhibition theory of power on the inter-organizational level. Organizations with increased power are assumed to have approach-related tendencies and act in goal-consistent manner, whereas organizations with reduced power are assumed to develop the tendency to pursue inhibition-related actions, e.g., attending to threats. Furthermore, this study identifies channel relationship characteristics such as retailer dependency as a mediating path between manufacturer innovativeness and performance.

Practical implications: Managers need to strengthen the firm’s innovative capacity to enhance the performance of their companies. By developing the capability to provide radical innovations, manufacturers are able to enhance their performance not only directly but also indirectly by strengthening the manufacturer’s position with regard to retailers. This study underscores the relevance of innovativeness for strengthening the manufacturer’s position in its relationship with retailers that avoids problems with aggressive store brands and constrained listing conditions.

Originality/value/contribution: This study proposes manufacturer innovativeness as a managerial lever to shift the power balance between manufacturers and retailers.     

零售商品牌资产形成机制及其理论模型

零售商品牌资产的形成机制反映了零售商品牌价值链与宏微观零售营销环境要素的作用关系。根据参与要素范围及内容结构的不同,零售商品牌资产的形成机制被分成宏观机制与微观机制,并表现为不同的理论模型。对理论模型中关键驱动要素的深入分析,有利于为零售商品牌资产建设提供有益建议。     

零售商品牌资产管理策略体系构建——基于多维理论视角的探讨

零售商品牌资产的管理和创建是零售企业获取持续竞争优势的关键,但关于零售商品牌资产管理策略的理论指导并不系统和丰富。因此,本文从零售商品牌营销管理、顾客情绪管理、顾客体验管理、顾客关系管理、顾客忠诚管理5个多维理论视角,对零售商品牌资产管理的策略体系进行了构建,以期为零售商品牌资产的创建过程和途径提供丰富的管理视野与思路。     

Performance implications of store format diversification for international retailers

Abstract

International retailers face formidable tasks in trying to replicate, or improve upon, their home country success abroad. Their market-seeking efforts sometimes require strategic diversifications of their store format portfolios capable of serving customers in different host countries. In this study, we examine whether the degree of store format diversification helps improve the performance of international retailers. We also assess the possible moderating effects of three factors—internationalization speed, political distance, and cultural distance—on this relationship. Utilizing 2001–2015 panel data for 19 retailers originating from several home countries and operating in multiple host countries, we employ a fixed effects model to examine the hypothesized relationships. Our results show that the performance of international retailers is influenced negatively by store format diversification. This relationship is moderated by internationalization speed and political distance, but not by cultural distance.     

A longitudinal examination of the effects of retailer–manufacturer brand alliances: The role of perceived fit

Abstract

One resource that has been identified as a valuable source of competitive advantage is the equity associated with an organisation's brands. Organisations devote considerable resources to developing strategies that allow them to build and/or maintain strong brand names. This study investigates brand alliances between retailers and manufacturers. The role of perceived fit between the partnering brands is explored. In addition, the study examines the influence that retailer–manufacturer brand alliances have on: retailer equity; manufacturer brand equity; the intention of consumers to frequent the stores of the retailer involved in the brand alliance (shopping intention); and the intention of consumers to purchase products from the manufacturer involved in the brand alliance (purchase intention).     

Temporary brand–retailer alliance model: the routes to purchase intentions for selective brands and mass retailers

We investigate a common but under-studied practice, the temporary alliance between a selective brand and a mass retailer, online or offline. Using a before-and-after methodology, we show how the attitude towards the new offer of a selective brand at a mass retailer plays a central mediating role. It is influenced by brand–retailer fit and product-category fit. It influences purchase intention towards the new offer, attitude changes towards the selective brand and mass retailer, and therefore purchase intention towards the brand and retailer. We also reveal a counterintuitive direct negative route from product-category fit to changes in purchase intention towards the retailer. To offer important managerial implications, we break out results for two selective brands and two types of mass retailers.     

Effects of sales promotion type and promotion depth on consumer perceptions: the moderating role of retailer reputation

This study uses a between-subjects experimental design to test the effect of two sales promotion formats (coupon versus markdown) with either high and low face values on consumer attitudes toward the deal, perceived product quality, and purchase intentions. The reputation of the retailer offering the deal is predicted to moderate the relationship between the promotional offer and consumer responses. Consumers perceive product quality to be higher when offered a high value coupon vs. markdown but there is no significant difference in perceived quality across promotion types when the promotion face value is low. When a deep price discount is offered by a retailer with a negative reputation, however, consumers have more favorable attitudes toward the deal and higher purchase intentions when provided with a markdown vs. coupon. Conversely, a high value coupon elicits more favorable evaluations than a markdown when the retailer has a positive reputation. When the value of the promotion is low and the retailer has a positive reputation, consumers have more positive deal attitudes and purchase intentions when offered a markdown vs. coupon. There is no significant difference in the effects of promotion type when the retailer has a negative reputation. The findings therefore establish retailer reputation as an important moderator of sales promotions effectiveness. This research is limited by the use of a single product category and a student sample. Process measures are also needed to validate the proposed theoretical conceptualization. The results provide managers insight into the type and value of the sales promotion to offer based on consumer perceptions of the retailer's reputation in the market.     

Retailer internationalization: overcoming barriers to expansion

This paper develops an understanding of the barriers to retailer foreign market expansion focusing on SME retail firms. A qualitative methodology was adopted to obtain a holistic understanding of the key barriers to international expansion experienced by retailers from both the firm and industry-level perspectives. In light of the findings from the case companies and industry organizations in this study, the paper concludes that the main barriers to foreign market expansion experienced by SME UK retailers, both at the entry and growth stages, comprise internal and external factors. This paper not only provides an understanding of the barriers encountered by SME retailers but also considers how such problems may be overcome.     

Use of tobacco retailer inspections to reduce tobacco sales to youth: do inspections increase retailer compliance?

Public health efforts to prevent tobacco use among young people have typically attempted to change individual behaviour. More recently, it has become evident that macro‐level behaviour change strategies which impact on the wider social environment are more effective in changing behaviour. In most states, retailer compliance laws restrict the sale and distribution of tobacco products to minor consumers. Indiana's Tobacco Retailer Inspection Program (TRIP), a state government programme, was established to put environmental controls in place by restricting youth access to tobacco products. TRIP involved conducting random, unannounced tobacco retailer outlet inspections, with violators being fined, and compliant retailers rewarded. This study examines the associations among retailer inspections, retailer compliance and access to tobacco by youthful consumers. Inspection data from 2001 to 2003 were analysed using chi‐square statistics and analysis of variance. Findings indicate that randomly selected retail outlet inspections are associated with increased sales restrictions to youth. The researchers conclude that strong tobacco sales regulations and enforcement will reduce illegal sales of tobacco products to minors.     

Performance of International Retailers: Empirical Evidence of an S-Curve Relationship

The performance outcomes of retail internationalization have attracted considerable scholarly interest, but studies have offered differing perspectives and findings on this relationship. In an effort to fill this gap on the topic, we posit that the relationship between the degree of retail internationalization and performance exhibits an S-curve shape. Using a sample of 18 international retailers with operations on six continents for the period 2001–2015, we find evidence of the S-curve dynamic where international retailers tend to experience declining performance after initial expansion beyond the home market, improving performance with continued expansion, and declining performance with further international expansion. We also examine two moderating variables on this relationship—foreign market growth and store format diversification. Our findings show that foreign market growth reinforces the hypothesized S-curve relationship while store format diversification reverses it. We offer theoretical and managerial implications based on the results of our study.     

International retailer performance: Disentangling the interplay between rule of law and culture

Understanding the complexity of institutional factors in host countries and adapting strategies accordingly is crucial for international retailers, given the high failure rate of global operations. This paper investigates the impact of formal institutions (i.e., legal environments) and informal institutions (i.e., cultural values) on the performance of international retailers. We analyzed the data on 144 international retailers and 565 subsidiaries owned by these retailers, using three measures of retailer performance: sales per square meter, return on equity, and Tobin's Q. Our findings show that retailer performance is influenced by the interactions of the host country's rule of law and three cultural dimensions. Specifically, strong rule of law enhances the performance of international retailers in host countries, especially with high power distance or high uncertainty avoidance. In highly collectivistic countries, retailers can also build strong relationships to govern transactions. Results provide key insights that explain international retailers’ performance in different countries and deliver guidelines for retailer strategies.     

Creation of consumer loyalty and trust in the retailer through store brands: The moderating effect of choice of store brand name

Within the current economic context, store brands play an important role in differentiation strategies based on assortment and positioning in terms of distributor prices. To begin with, this study identifies three determining aspects of retail loyalty and trust: satisfaction with price levels, the perceived image of the assortment and loyalty to the store brands (SB). Secondly, this study proposes a theoretical relational model among the aforementioned aspects. Finally, this study analyzes the moderating role that the strategy of choosing SB name (umbrella brand label vs. brands different from the label brand) plays in the relationship between loyalty to SB and loyalty to and trust in the retailer. By including this moderating variable, we seek to contribute to current academic research and to provide insights into the importance that SB strategy (label vs. own name) has for the effect of loyalty to SB on the relative results of the retail company. Our research results show that making the umbrella SB name the same as the label brand name increases the positive effect of customer loyalty to SB on loyalty to the retailer, but not the effect of trust on this loyalty compared to chains that use SB names different from those of the label. These results have important implications for management.     

基于KANO模型的网络零售商服务质量评价

以KANO模型为基础,建立网络零售商服务质量评价体系,通过定量分析不同层次的顾客需求,找出顾客和网络零售商的接触点,识别使顾客满意的至关重要的因素,如必须质量、期望质量、魅力质量,提升网络零售商的服务质量和经营业绩。网络零售商只有保持必须质量,提升期望质量,增加魅力质量,才会在激烈的竞争不断的发展和壮大。     

Retail supply chain management practices in India: A business intelligence perspective

The study surveyed executives of a major food retailer in India and explored their perspectives on supply chain management practices, competitive advantage and firm performance; to assess the importance accorded to application of business intelligence (BI) in their operations. Nine dimensions for SCM practices and four dimensions for competitive advantage are identified which are found to strongly relate to each other. The dimensions of SCM also strongly relate to firm performance. Though information sharing with suppliers and their inclusion in strategic decision-making emerge as key dimensions of SCM, their impact on competitive advantage is perceived to be insignificant by retailers.     

退货逆向物流中零售商与4PL的动态行为量化分析模型

本文提供的模型包括客户、零售商以及第四方物流。客户直接向零售商购买商品;第四方物流(4PL)作为退货逆向物流服务的集成商;零售商通过与4PL形成退货逆向物流联盟,采取动态联动价格行为来实现最优价格决策。模型为退货逆向物流中零售商如何进行市场需求分析、市场价格行为决策以及最佳利润分析提供了理论依据。     

How retailer and competitor decisions drive the long-term effectiveness of manufacturer promotions for fast moving consumer goods

While both retailer and competitor decisions contribute to long-term promotional effectiveness, their separate impact has yet to be evaluated. For 75 brands in 25 categories, the author finds that the long-term retailer pass-through of promotions is 65 percent, yielding a long-run wholesale promotional elasticity of 1.78 before competitive response. However, competitors partially match the wholesale price reduction by 15 percent, which decreases promotional elasticity by 10 percent. The range of retailer and competitor response across the analyzed cases is very wide, and is affected by category and brand characteristics. As to the former, large categories yield stronger retailer response, while concentrated categories yield stronger competitor response. As to the latter, smaller brands face a fourfold disadvantage compared to leading brands: they obtain lower retail pass-through, lower retail support, and lower benefits from competing brand's promotions, while their promotions generate higher benefits to competitors. Interestingly, the mid-1990s move from off-invoice allowances towards scan-back deals only partially improves their promotional effectiveness compared to that of leading brands.     

The Effects of Retail Banner Standardization on the Performance of Global Retailers

Global retailers often face an important decision about the extent to which they should standardize or adapt their retail banners, a choice that the authors refer to as retail banner standardization (RBS). Drawing on the international marketing and retailing literatures, this study investigates how RBS affects the performance of global retailers in a longitudinal sample of 69 global retailers from multiple countries and sectors, across ten years. Findings indicate that the role of banner standardization in the successful performance of global retailers depends on retailer and market-level characteristics. Specifically, the results demonstrate that RBS improves retailer profitability as retailers increase their global penetration and emphasize status-based differentiation. Findings also suggest that banner standardization has stronger effects on profitability as retailers increase their focus on emerging markets and e-commerce. However, the authors also find that while RBS increases profits at low levels of global diversity, this effect becomes non-significant as retailers expand to highly diverse foreign markets. As such, the study provides important implications for global retailers while also filling the gap in banner/brand standardization/adaptation research that lies at the intersection of retailing and international marketing.     

Conceptualizing and measuring consumer perceptions of retailer innovativeness in Taiwan

This study aims to develop a reliable and valid measure of perceived retailer innovativeness (PRI) in Taiwan. Both qualitative and quantitative analyses were employed. A qualitative content analysis from six focus group interviews concludes a specific form of PRI. The quantitative study, which contains 486 7-Eleven and 489 Carrefour consumers, provides an exploratory and confirmatory factor analysis in examining the validity of PRI scale. Consumer perceptions of retailer innovativeness can be conceptualized as emotions, cognitions, and behavior responses evoked by store-related stimuli that are part of the offerings, services, design, and activities of a store. Four dimensions have been identified, namely, perceived product-related, service-related, promotion-related, and experience-related innovation capabilities. The PRI scale might be valued by academic scholars for its application for future studies, particularly in an era of intense competition in which innovation is considered as a critical strategic tool for differentiation.     

Decision-making mechanism of online retailer based on additional online comments of consumers

With improving capability of providing online comments, more and more e-business firms have been developing their online platforms that enable consumers to offer their comments and user experiences. However, there might be conflicting information contained in initial and additional consumer comments, and that information have different value perceptions for potential consumers. Therefore, it is of great significance for online retailers to investigate subsequent rounds of comments and their relationship with potential consumers' purchasing decisions. Enriching the relevant literature, we develop an analytical model to analyze the impact of online retailers' after-sales service on their profits, leading to discussions of the decision-making mechanism of online retailers. The results show that product pricing is influenced by consumers’ perceived utility through after-sales service, and product-demand mismatch and after-sales service quality play important roles in the performance of the online retailer and the after-sales service expand the amount of positive additional comments, and earn the retailer more profits.     

Factors Influencing Web Customers’ Willingness to Engage in Online Shopping with an Internet Retailer

This study is an effort to identify and analyze the factors that could potentially influence web customers’ willingness to engage in online shopping with an Internet retailer. Using the primary data collected from a large sample of a web-based consumer survey, researchers developed a structural Equation model that embodied those factors that potentially influenced web customers’ willingness to engage in online shopping with an Internet retailer. Seven constructs were considered to study the effects of those factors on the web customers’ willingness to engage in online shopping with an Internet retailer, including quality of service, inertia to change, economic value, stress reduction, enjoyment in doing business, comfort level with website, and aesthetic appeal. The proposed model is largely supported and validated by several statistical measures and tests.