In: Operations Management
How would you satisfy both retailers and consumers when using revenue management tactics, since the same two customers might actually pay different prices for the same product/service as discussed.
In a vivid manner of perspective, both the retailers and
consumers are buyers. Consumer satisfaction is the main objective.
But sometimes, the manufacturers can't host outlets, thus they
could provide the products directly to consumers. Hence, they
supply their products through retailers.
Consumers are always the end buyers. It is upon their existence,
where retailers, as well as the producers, are surviving. But as a
manufacturer, different prices should be imposed on the same
products to two different buyers.
Retailers purchase bulk products from manufacturers. It is not
practically possible for a manufacturer to distribute its products
to those who need it. Thus, retailers ease this job for them. Hence
the products should be provided with less value than the MRP rate.
Thus, when they sell a large amount of these products, they would
generate a fair amount of remuneration.
Every time, it is the consumer who should pay a higher price than
the retailer for a single piece of product. And I have explained
how it is beneficial for the retailers. Now we could discuss, how
it would satisfy the consumers even if the price is higher when
compared to the retailers. As the large section of the consumers
doesn't share the same geographic location as of the manufacturer.
Hence, retailers are much closer to them. Also, they provide as
much as the product as per the consumer's convenience. They act as
a miniature warehouse facility. Also, it would be much expensive to
travel and procure the goods from the manufacturing hub. Thus, more
price to consumers is reasonable as well as more worth the value.
Therefore, from the perspective of the manufacturer, the entity
satisfies both the retailer and the consumer.