Academic journal article Journal of Economics & Management

Cooperation between Suppliers and Retail Chains in Developing Systemic Products

Academic journal article Journal of Economics & Management

Cooperation between Suppliers and Retail Chains in Developing Systemic Products

Article excerpt

Introduction

Detailed recognition of demands of target segments ought to result in creation of commercial offers satisfying final customers [Sirdesmukh, Singh, Sabol 2002].

The picture below presents the process of formation of a marketing instrument that influences the target market of the retail entities. Depending on marketing composition, the number of instruments that are created is different (in the earliest sources, the composition of marketing mix in trade was interpreted through the prism of the elements including product/assortment, price/assortment, services, and facilities). Maximizing the lifetime value of a customer is a fundamental goal of relationship marketing [Christopher, Payne, Ballantyne 2002].

We can see in Figure 1, that the values are included in a particular marketing offer, which is followed by a confrontation of already created utilities with observed needs, and finally, with the degree of their satisfaction. If the needs are not satisfied or are only partially satisfied we can observe the return to the beginning of the process and creation of modified utilities of the particular sphere of marketing. Consequently, adaptation of the marketing instrument and its transformation into a specific instrument of market influence takes place.

The profile of contemporary customer is definitely different from customers 'of the past' therefore also retail chains need to adapt themselves to new challenges related to the characteristics of active customers [Kucharska 2014, pp. 78-89]. Characteristics of contemporary active consumers bring observation about the necessity to gather knowledge about them by commercial chains. This knowledge is acquired for the need of construction of specific commercial offers and to determine the strategy of cooperation with suppliers who are an integral part of the value chain that contributes to the shape of the offered product. Here it should be mentioned that retail trade enterprises in practice apply measures that aim at better identification of target customers.

The offer for individual customer may become attractive if suitable sources of purchase are provided (in the case of trade, they are suppliers of ready products that offer expected value that is guaranteed for example by chain private brand products). Hence indication of suppliers as partners, who enable in practice, development of competitive market offer [Chen 2009; Mentzner, Ming, Zacharia 2000].

Growing demands of customers and competition, as well as progress in the sphere of new technologies become the reasons for changes in the approach to holistic strategies of retail chains [Gilbert, Sumner 2004]. Customers and suppliers are the key elements of this strategy and creation of relationships with them allows for achievement of competitive advantage [Wathe, Heide 2004; De Wulf, Odekeren-Schroeder, Iacobucci 2001].

1.Strategic approach of retail chains to suppliers

The policy of performing purchase and related problems concerning cooperation is the element of activity of retail chains. The subject of cooperation between the sphere of trade and suppliers is discussed mainly by such authors as P. Stannack, M. Jones, T. Wojciechowski, R. F. Reck and W. Szczepankiewicz. In the approach suggested by the aforementioned authors the attention is focused on relationships between enterprises and their suppliers. The problems stricte associated with the issues of selection of suppliers are analyzed. The evolution of the purchasing function was discussed by P. Stannack and M. Jones [1996]. In the case of commercial chains operating in Poland the stage of doing shopping focused only on products, is already left behind in these organizations. Another model was presented by R.F. Reck and B.G Long [1988] and shows four stages of purchasing function. While associating the models of evolution of purchasing function with marketing, the model of integral marketing presented by L. Zabmski must also be mentioned [1996]. …

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