Manufacturer, Retailer and Customer. A triangular relation ship, linked by Logistics

supplychain

Do you like when you are looking for a specific product in a shop and this product is out of stock? This can occurs when you go to by a car. For instance, a Ferrari never gives you directly a car. Because it is a high-end product, so it is part of the company’s strategy. But in a retailer shop it is different. Hypothetically, one day you want to buy a computer in an electronic shop such as verkkokauppa (Finnish electronic store), and they don’t have the one you wanted. As you know that they are Verkkokauppa logonormally selling it, it might be due to their supply chain.

Different kinds of logistics are available in order to avoid out of stocks. Everything depends on the retailer’s wishes. The supply chain can be a Collaborative Logistics Technologies. In other words, the manufacturer and the retailer are sharing their information in order to satisfy, as well as possible, the customer and consequently, influence positively a sustainable competitive advantage. Another logistic is a more advanced one called Collaborative Logistics Technologies & Logistics Operation, which refers to the first one but in addition provides significant supply chain cost reduction. Other supply chains are available but are not relevant there.

A retailer has to choose its brand differentiation orientation in order to keep the loyalty of its customer. Indeed, certain brands are offering a specific supply chain to their retailers due to the nature of their products. Then the retailer has the choice to sell this product or not but if it does, for long term delivery product, the customer might not be so loyal to the brand and choose another one.

Actually, the customer’s loyalty to manufacturer brands depends on the retailer’s status. According to a study made in 2012, 60% of customers are loyal to franchised shops. On the other side, 30% are loyal to corporate. From those facts we know that retailers are more inclined to have customers’ loyalty to a specific brand depending on their “nature”. Then the choice of their manufacturers (aforementioned: brand) depends on their wants of logistics and competitive advantage.

Sources:

The Retailers’s Perspective on the Link Between Logistical Resources and Perceived Customer Loyalty to Manufacturer Brands by Mert Tokman, R. Glenn Richey, George D. Deitz, and Frank G Adams edited by the Journal of Business Logistics in 2012.

http://www.cognizant.com/InsightsWhitepapers/Manufacturers-Retailers-Look-to-Adaptive-Supply-Chains-to-Increase-Revenue-Cap-Costs-Boost-Productivity.pdf

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One Response to Manufacturer, Retailer and Customer. A triangular relation ship, linked by Logistics

  1. henaheii says:

    I agree logistics are very important for companies. For other like Ferrari of course the supply delays will be more acceptable. However they still have to be efficient with their logistics to serve the customers better and being efficient also means to cut unnecessary costs. Larger logistics costs will ether increase the final price or cut the products profit margin.

    Interesting topic, but you could improve your writing! Here’s some tips:
    1. Have a clear main message in your post. Try to make it clearer for the reader.
    2. Pay attention on the writing. F.e. “This can occurs when you go to by a car” -> “This can occur when you to buy a car”.
    3. Make questions that inspire the reader to think.

    Those were just some points to think if you ever write a new blog.

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