• Journal of the Korean Operations Research and Management Science Society
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• v.19 no.1
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• pp.169-187
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• 1994

The efficiency of marketing channel of distribution between a sholesaler and a retailer with uncertain characteristics can be improved by influencing the retailer's ordering pattern. The wholesaler with large unit invetory holding cost can offer a large quantity discount tanks to the great benefit which comes from the transfer of part of his inventory to retailer. The retailer's increasing average inventory holding cost can be offset by the quantity discount and by savings of the ordering cost. Conditions under which marketing channel improvement can be possible are derived.

• Asia Marketing Journal
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• v.14 no.3
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• pp.49-68
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• 2012

When a channel is vertically separated, there can be inefficiencies, double marginalization. Channel coordination to amend this inefficiency has been an important issue in marketing and economics. Channel coordination deals with maximization of joint profit and achieving proper profit sharing among participants. In this paper, a manufacturer and heterogeneous multiple retailers with exclusive territory are assumed, and channel coordination with two-part tariff is considered. When multiple heterogeneous retailers are assumed, profit sharing can be an issue even though the tariffs based on marginal cost can maximize joint profit. In case of multiple heterogeneous retailers, the manufacturer earns the same profit (fixed fee) from each retailer. This means that a large retailer occupies all the gaps of channel profit between small and large markets. Then, the manufacturer, which generally plays the role of Stackelberg leader, will consider increasing fixed price or marginal price to earn more profit from large retailer. Those reactions can sacrifice maximization of joint profit by making small retailer withdraw or by changing the sales quantities. In this paper, to maximize joint profit and achieve proper profit sharing, two kinds of optional tariffs are considered. The first is an optional two-part tariff based on marginal cost and the second is an optional modified two-part tariff in which marginal prices are higher than the manufacturer's marginal cost. In both types of optional tariffs, maximization of joint profit in each market can be achieved. Moreover, optional tariffs alleviate the problem of profit sharing. Optional tariffs can provide a manufacturer more profit from a large retailer when profit from a small retailer is given. However, the analysis shows that the maximum share of manufacturer from a large retailer is restricted by the condition for self-selection. In case of optional two-part tariffs based on marginal cost, if the gap between demands is large, the maximum share of the manufacturer is sufficient to achieve proper profit sharing. If the gap between demands is not sufficiently large, the manufacturer cannot earn sufficient share from increased profit. An optional modified two-part tariff where marginal price is more than marginal cost of manufacturer is considered because of this scenario. The marginal price above the marginal cost may additionally control the distribution of the increased profit. However, the analysis shows that a manufacturer's maximum profit from a large retailer with given profit from a small retailer is the same as or lower than the maximum profit when optional two-part tariffs based on marginal cost are applied. Therefore, it can be concluded that the optional modified tariffs do not have additional contribution to profit sharing relative to the tariffs based on marginal cost. Although this paper does not cover all kinds of optional tariffs that are different from tariffs based on marginal cost, it shows the advantage of optional tariffs based on marginal cost and has important theoretical implications. The result of this paper also gives guide for channel coordination. Optional two-part tariff based on marginal cost can increase efficiency in channel coordination.

• International Journal of Advanced Culture Technology
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• v.9 no.2
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• pp.91-99
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• 2021

In Korea, some pharmaceutical companies and agricultural machine manufacturers associate the length of the credit period with the retailer's order size. This kind of commercial practice is based on the principle of economy of scale from the supplier's point of view and tends to make retailer's order size large enough to qualify a certain credit period break. Also, the credit period allowed by the supplier makes it possible to reduce the retail price expecting that the retailer can earn more profits by the stimulating the customer's demand. Since the retailer's order size is affected by the end customer's demand, it is reasonable to determine the retail price and the order size simultaneously. In this regard, this paper analyzes the retailer's problem who has to decide his sales price and order quantity from a supplier who offers different credit periods depending on his order size. And we show that the retailer's order size large enough to qualify a certain credit period break. Also, it is assumed that the end customer's demand rate is represented by a linear decreasing function of the retail price.

• Journal of Distribution Science
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• v.12 no.2
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• pp.73-79
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• 2014

Purpose - The Korean government has revised the distribution industry development law to regulate large-scale retailer operations to protecting medium- and small-scale retailers and traditional markets. According to the revised law, large-scale retailers must follow regulations on operating hours and compulsory store closures two days per month. Based on the revised distribution industry development law, most local governments regulate operation hours and they have adopted compulsory closure programs for large-scale retail stores. However, it is argued that fresh food producers suffer from a decrease in sales based on the compulsory closure of stores operated by large-scale retailers. Large-scale retailers reduce their fresh food orders from agricultural and fishery producers because of the compulsory store closures. Fresh food producers also suffer from a decrease in prices because reduced orders lead to a decrease in auction prices based on the availability of excess goods in wholesale markets. This paper investigates the effects of operation regulations for large-scale retailers on agricultural producers by surveying agricultural and fishery producer organizations. Research design, data, methodology - A survey was conducted on 117 producer organizations of fruits and vegetables, cereals, fisheries, and livestock products from September 10 to October 4, 2012. Survey items are annual sales, shares of sales accounted for by large-scale retailers, reduction of orders and prices from large-scale retailers, methods to deal with the sales reduction, unfair trade practices of large-scale retailers, opinion of the large-scale retailer regulations, and so on. The average sales of the sampled producer organizations are 13.7 billion won and the average share of sales accounted for by large-scale retailers is 35.4%. Results - Survey results show that the sample producer organizations' sales decreased 10.1% because of the compulsory closures of stores operated by large-scale retailers. It is estimated that the total sales of producer organizations decreased 371.2 billion won because of the regulations on the operation of large-scale retailers. In addition to the direct effect of a sales decrease due to order reduction, agricultural and fishery producer organizations suffered from the secondary effect of price reduction in wholesale markets. When orders from large-scale retailers decreased, most agricultural and fishery producer organizations shipped redundant products to wholesale markets, decreasing auction prices. It was estimated that the price received decreased 21.9% when sold in other marketing channels. As producer organization sales decreased, it was reported that the labor force employed by producer organizations also decreased by 15.1%. Therefore, we can conclude that the regulations for large-scale retailer operations resulted in negative impacts on agricultural producers. Conclusions - Although the sales reduction due to the regulations for large-scale retailer operations are not great, the cumulative effects due to the continued compulsory closure of stores operated by large-scale retailers could be great. This paper suggests governmental programs that could help agricultural producer organizations to find new and effective marketing channels such as direct marketing, farmers' markets, exports, Internet shopping, and so on.

• The Journal of Small Business Innovation
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• v.19 no.2
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• pp.37-52
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• 2016

Making efforts to break down the barriers between the intra-company departments as well as cooperating with external partners can become the driving force to create a successful innovation in the new product development (NPD) process. This study deals with how the key factors of collaborative innovation success are working in the process of NPD collaboration. Using case analysis of the NPD process, where a large retailer and small and medium-sized suppliers cooperate, we found that the small and medium-sized suppliers achieved greater 'short-term' performances in the collaboration than the large firm, although the long-term performance is not clear. Among the six antecedents of innovation success, relationship-specific investment played a critical role in motivating the supplier's participation in the NPD process. Adopting a 'closed' network in which the two suppliers interact directly with each other and create new knowledge for the NPD process played an important role in producing a quality product in a reduced development time. Unlike previous studies about the retailer-supplier cooperation for NPD in the food industry suggesting that position differences cause communication problems which is a major obstacle to the NPD success. This study suggests that large retailer's initiative role is a critical success factor in the NPD by the cooperation between small and medium-sized suppliers and large retailers.

• The Korean Journal of Franchise Management
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• v.3 no.2
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• pp.79-102
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• 2012

The last year, the government restricted a new store open and businness hours of a large-scale stores, discount store and super super market(ssm). So, this research was examined the effect that the retailer was affected and its correspondence strategy First this research examined how the government restricted a large-scale stores in 2009 earlier and then this research analyzed how the Japan and France restricted it. Second this research examined that a new establishment and business hours change of a large-scale stores. Bacause of a small trader resistance in 2009 latter. Finally it analyzed the effect that a retail industry was affected in the future. bacause law was enforced. On the basis these things, a victim remedy was presented by retailers view. Bacause of international law and an excess regulation. Also, this research suggest that large retailer should expand a overse market and increase retailers private brand component ratio and develop overse brand. Finally this research also suggest that trader and retailer should continue to coperate and turn business direction into franchise system.

• Journal of the Economic Geographical Society of Korea
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• v.8 no.1
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• pp.131-152
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• 2005

The purpose of this paper is to find out the spatial characteristics of the relationships between urban large retailer and agro-food suppliers. For this purpose, Dong-A department store which is one of the most famous local distribution company was selected as a case study firm. The case study company has its own systematic food supply chain in the process of food procurement, selection, delivery, and marketing. It mainly does businesses in Daegu and Gyeongbuk province, but also procures and delivers products all around the country. Customers' recent concerns over the freshness and the period of circulation made the company use the local physical distribution system that it purchases products in nearby areas and perform procurement and delivery in nationwide areas. It is identified that trading types are significantly different by locations of suppliers in that more thin 40$\%$ of suppliers in Daegu are food manufacturers, whereas suppliers in Gyeongbuk mainly belong to the ones in fresh food production areas. In terms of durability of the retailer-supplier relation, the case study firm has relatively long-term relationship with suppliers, maintaining the relationship fer over 5 years in more than 70$\%$ of suppliers.

• Journal of Distribution Science
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• v.9 no.3
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• pp.25-36
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• 2011

Owing to the rapid growth of hypermarket/discount store formats since 1996, Korean retailing has suddenly attracted the significant attention from researchers. Before the emergence of large scale retailers such as E-Mart, Lotte Mart and Tesco Korea, there were the two retail formats who led the Korean retailing in the modern retailing history: department store and supermarket formats. Nevertheless, there has been little literature concerned about the two retail formats as a case study, while some authors have paid their attention to hypermarket/discount store formats. In addition, when mentioning the development process of retailing history, it is less likely that authors have made an effort to illustrate supermarket retailing history. In order to regard supermarket retailing as part of the Korean retailing, it is interesting to look at a representative supermarket retailer, Haitai, who was one of the subsidiaries of Haitai chaebol. Based on supermarket retailing, the company which was established as a joint venture in 1974 led a supermarket retailing in the Korean modernised retailing history. Before analysing whether Haitai failed or not, the definition of failure should be illustrated. With regard to the term, failure, in the academic world, authors have interchangeably used the following terms: failure, divestment, closure, organisational restructuring, and exit. To collect research data as a case study, the author adopted an in-depth interview method. The research is based on research interviews with 13 ex-staff who left after Haitai went bankruptcy, from store management department to merchandise department. By investigating Haitai's experiences through field interviews, the research found that Haitai restructured organisational decision-making process at the early stage when companies started to modernise organisational charts, benchmarking sophisticated retailing knowledge through the strategic alliance with a Japanese retailer. In respect of buying system, the company established firmly buying functions by adopting central buying system, and further, outstandingly allocated considerable marketing resources to the development of retailer brands with the dedicated team of retailer brand development. In the grocery retailing, abandoning a 'no-frill' packaging concept, the introduction of retailer brand packaging equal to, or better than national brand packaging design, encouraged other retailers to change their retailer brand development strategies. In product sourcing ways, Haitai organised for the first time the overseas sourcing team with the aim of improving the profit margins of foreign products and providing exotic products for customers, followed by other retailers. Regarding distribution system, the company introduced the innovative idea which delivered products ordered by stores directly to each store withboth its own vehicles and its own warehouse in which could deal with dry foods, chilly foods, frozen food, and non-foods, and even, process produce. In addition, Haitai developed many promotional methods to attract more customers like 'the guarantee of the lowest price', and expanded its own business to US in 1996, although withdrew, because of bankruptcy in 1997. Together with POS introduction in 1994, Haitai made a significant contribution to the development of the Korean retailing, influencing other retailers in many aspects. As a case study, the study has provided a number of lessons from Haitai's experiences for academicians and practitioners, suggesting that its history should be involved in the Korean modernised retailing.

• Journal of applied mathematics & informatics
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• v.42 no.2
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• pp.379-390
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• 2024

This study proposes a fuzzy inventory model for managing large-scale production, incorporating cost considerations. The model accounts for two types of expenditure scenarios-parametric and exponential. Uncertainty surrounds holding costs, setup costs, and demand rates. The approach considers a supply chain system with a complex manufacturing process, factoring in transportation costs based on the quantity of goods and distance between the supplier and retailer. The initial crisp model is then transformed into a fuzzy simulation, incorporating specific fuzzy variables affecting inventory costs. The proposed method significantly reduces overall inventory costs for the entire supply chain. Retailer demand is linked to inventory levels, and vendor/distributor storage deteriorates over time. The fuzzy condition assumes hexagonal variables for all associated factors. The study employs the signed distance method for defuzzification to determine the optimal order quantity with hexagonal fuzzy numbers. Mathematical examples are provided to illustrate the practicality of the proposed approach.

• Journal of Distribution Science
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• v.13 no.7
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• pp.33-40
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• 2015

Purpose - This study aims to find out what impacts large retailers' behaviors appearing when they promote the strengthening of their market dominating power in the trade relations with small and medium suppliers or in the market can have on consumers. Research design, data, methodology - This study analyzed negative information (news) on large retailers (Lotte Mart, E-Mart and Homeplus) based on the monthly data over the past five years from 2008 to 2012 and also analyzed the correlation between dependent variables that are likely to affect sales through large retailer economic index, Results - This study conducted a correlation analysis on the time lag of the factors that have an impact on the negative information and sales of large retailers in order to analyze how consumers respond to the choice of large retailers' store (store sales) when they perceived negative information about the un- ethical behaviors of large retailers. Conclusions - Unfair and negative information on large retailers appeared significant for the hypothesis that sales will be affected by the image of large retailers and change of consumer attitudes.