Seminario Ingeniería Industrial / Skander Esseghaier, U. de Manouba, Túnez, y U. Politécnica Mohammed VI, Marruecos
Abstract
Retailers may collaborate with a leading supplier (called captain) to manage some specified categories. This can happen by either delegating the task of category resources deployment to the captain in a delegation arrangement or seeking his advice in an advisory arrangement. We analyze these arrangements and show that they have an information effect: non-price decisions/actions by the category captain can reveal information that allows the retailer to improve profit through better pricing decisions. We also show how this information effect mediates the category management relationship a retailer would seek with her supplier: (i) whether or not a retailer would engage a captain; and if she does, (ii) the nature of the captainship arrangement that she would choose. We find that: 1. delegation can reveal information in situations where advisory cannot, in which case the retailer strictly prefers it over the other arrangements; 2. advisory can reveal information in situations where delegation cannot reveal information, in which case the retailer strictly prefers it over the other arrangements; and 3. both advisory and delegation can reveal information and the retailer prefers either of these captainship arrangements over managing the category herself. We also show that category captainship arrangements have the greatest potential to make the retailer better off in categories where the retailer is highly uncertain about the impact of category resources on brands’ demand. Moreover, the more substitutable the brands in the category, the more valuable captainship arrangements are to the retailer.
Nuevo Boletín E&G
Ingeniería Industrial, Facultad de Ciencias Físicas y Matemáticas, Universidad de Chile
Beauchef 851, Santiago
+56229784827