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Money Quote by Greg Thain

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““These fundamental differences in financial structure affect the way retailers think and operate, which is a source of friction between them and manufacturers. The most important consequences are that retailer profits are much more sensitive to volume, pricing decisions and finely controlling costs than is the case for manufacturers.””

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More by Greg Thain

“Marketing aims/image: A retailer that has positioning aims (e.g. trying to improve its image with respect to healthy food or trying to upstage wholesaler…

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“Every dominant brand (such as those listed in Table 5.1) has had to reinvest in mindspace every year to keep its position. However, things…

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“consolidation, coupled with a desire among the survivors to restore normal profit levels, helps to usher in an era of orderly competition based on…

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“If the manufacturer can convince the retailer that delisting will hurt consumer satisfaction and possibly lead to store switching, then that will be second…

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“As retailers have become competitors of manufacturers in many product categories, they reserve more shelfspace for their private label brands and dominate advertising spending…

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“High fixed costs mean that high volumes are an ever-essential objective. One”

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“Importance of price: Price is imperative for FMCG retailers, much more so than for manufacturers. Retailers must constantly keep their real prices competitive and put…

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“Hoping to create a little prestige, some retailers develop and advertise premium clothes sub-brands. In 2006, Myer, one of Australia’s largest retailers, launched a…

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“The shift of power to retailers is not an inevitable phenomenon: technological changes and associated innovative ideas have been instrumental in moving power and…

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“Because retail brands are barely differentiated, they are relatively fragile when compared to the largest manufacturer brands, despite having, in general, much higher awareness…

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“There are some FMCG categories where retailers are destined to control mindspace. These are the low-technology, low-image, low-novelty areas. Retailers are likely to be…

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“In markets where consumers are sensitive to quality differences (e.g. washing powder, instant coffee, sanitary protection) the share for generics and copycats usually plateaus…

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