Note: the role of returns policies in pricing and inventory decisions for catalogue goods

Article Abstract:

The effect of returns policies, relied on by manufacturers to motivate their retailers to stock and price times more aggressively, on the revenues of the manufacturer and the retailer when the retailer has to commit before the selling season to stocking quantity and selling price was analyzed. Findings showed the importance of considering the self-interested behavior of retailers when developing a manufacturer's pricing policy. Assuming the relationship between a manufacturer and a retailer to be in a single period setting with price dependent demand uncertainty, and employing a multiplicative model of demand uncertainty, it was observed that price rise with uncertainty. Moreover, it was seen that the manufacturer can increase profit by allowing the retailer to buy back excess stock from the retailer after the selling period, under certain conditions.

Research, Marketing, Inventory control

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Note: the role of returns policies in pricing and inventory decisions for catalogue goods

Article Abstract:

The impact of returns policies, used by manufacturers to motivate their retailers to stock and price times more aggressively, on the profits of the manufacturer and the retailer when the retailer has to commit before the selling season to stocking quantity and selling price was investigated. Findings showed the importance of considering the self-interested behavior of retailers when developing a manufacturer's pricing policy. Assuming the relationship between a manufacturer and a retailer to be in a single period setting with price dependent demand uncertainty, and employing a multiplicative model of demand uncertainty, it was observed that price rise with uncertainty. Moreover, it was seen that the manufacturer can increase profit by allowing the retailer to buy back excess stock from the retailer after the selling period, under certain conditions.

Retail Inventories, Management

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Price promotions and trade deals with multiproduct retailers

Article Abstract:

Retail price promotions and manufacturer trade deals in multiproduct retail markets were investigated. Specifically, the explicit role of retailers and manufacturers, retail competition, category management and consumer heterogeneity were analyzed. A framework that models a situation with competing retailers and competing manufacturers selling multiple products was proposed to characterize the equilibrium pricing strategies at both the wholesale and retail level. Empirical results showed that market structure affects whether brand promotions can be positively or negatively correlated in situations where retailers offer more than one competing brand. Furthermore, there are times when retailers offer the same discount on different product brands and times when they offer a smaller discount on a product supported by a bigger trade deal.

Sales Promotion, Models, Prices and rates, Sales promotions, Consumer goods, Discounts (Sales)

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