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Author:Ingene, C.
Parry, M.
Title:Coordination and manufacturer profit maximization: the multiple retailer channel
Journal:Journal of Retailing
1995 : SUMMER, VOL. 71:2, p. 129-152
Index terms:RETAILING
PROFIT
MANUFACTURING
Language:eng
Abstract:This paper explores wholesale pricing behavior within a two-level vertical channel consisting of a manufacturer selling through multiple independent retailers. The authors demonstrate the existence of a two-part tariff wholesale pricing policy, common to all retailers, that fully coordinates the channel. They then show that the manufacturer can generally obtain greater profits by setting a unique two-part tariff pricing policy that does not coordinate the channel. Finally, the authors show that the fixed-fee component of either two-part tariff determines channel breadth.
SCIMA record nr: 142238
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