ساختار بازار خرده فروشی و تهدید توسط تولید کننده برای فروش کالا به طور مستقیم به مصرف کننده

When a manufacturer and its retailers and consumers are spatially separated, the retailers’ market size may be limited by the manufacturer who provides consumers with an option to purchase goods directly from them. The manufacturer uses this tactic to increase profit when a few retailers dominate the market. The mill price of a manufacturer, that is, the price of the good at delivery from a manufacturer’s factory, is critical under these circumstances. If the manufacturer charges a franchise fee, thus absorbing the retailer’s profit, this fee is a function of the mill price. Mill price policy can be used to maximize profit on the sale of goods and collection of the franchise fee. The resulting retail market structure becomes preferable for the manufacturer and consumers since the manufacturer’s profit is larger, as is the quantity purchased, compared with a competitive equilibrium in which every firm entering the market area is assumed to move its location instantly without cost.

It is normally assumed in spatial equilibrium analysis that production and selling are integrated within a firm. Under this assumption, the firm’s market area and the price of its good are derived and compared among spatial (monopoly, oligopoly and free-entry) retail markets. However, production and selling are generally managed independently in firms. What interests us in this separation of production and selling is how a manufacturer of the good relates itself to the retail market for that good, including the nature of their economic relationship. There exist various interesting spatial economic relationships between the manufacturer and its retailers. It is well known that manufacturers use various restrictions and conditions as a means of expanding profits and market share. In the 1980s, research began on manufacturers’ restrictive measures towards retailers. This work considered the geographical distance between a manufacturer and its retailers and consumers, e.g. [1], [2], [3] and [4]. Other studies have concentrated on such restrictive means as resale price maintenance, upper- and lower-price ceilings, limitation of sales, and territory.1 The current paper proposes another means—limiting retailers’ market size by providing consumers with an option to purchase goods directly from the manufacturer. This paper consists of seven sections. Section 2 explains the basic ingredients of the model. Section 3 analyzes the manufacturer’s profit and the composition of a retail market in the case where the former does not intervene in the latter other than setting the profit-maximizing mill price. Section 4 assumes that the state of the market is dominated by a few retailers and shows retailers’ prices and profits as well as the manufacturer’s profit. Section 5 proposes a method for a manufacturer to intervene in an oligopolistic retail market. We then show the retail market conditions needed for a manufacturer to pursue such an intervention. Section 6 introduces the franchise fee system to the measure described in Section 5. In addition, using earlier results, this section shows the effectiveness of the proposed restrictive means. Section 7 summarizes the findings of the paper.

This paper proposed a simple, but effective means of intervention by the manufacturer in an oligopolistic retail market. This measure, in which the manufacturer informs consumers of (1) the price of goods, and (2) its intention to sell directly, is inexpensive in cost. Our economic analysis of this mode of intervention revealed that whether the manufacturer should intervene in the retail market or not will depend on (i) the mill price that is determined by negotiation between the manufacturer and retailer, and (ii) the actual price level that induces the manufacturer to finally intervene in the market. Another outcome of this paper is related to the franchise system. When the proposed restrictive measure is used with a franchise fee, we derived the manufacturer’s profit and the level of sales. We then compared these measures with those values obtained if the retail market is competitive. Our results showed that the manufacturer’s profit and sales levels are both greater in the intervention case than under a spatial free-entry equilibrium. This suggests that the proposed restrictive measure by the manufacturer (i.e., price information, direct sale, and franchise fee) bestows economic benefits to consumers as a whole as well as to the manufacturer. In this sense, the proposed measure would improve conditions in the marketplace. An interesting feature of this proposed restrictive measure is the manufacturer’s capability of restricting the retailer’s market area size without complicated procedures and systems. Furthermore, this measure is simple and inexpensive. We argue that the paper proposes a new measure for a manufacturer contemplating “a territory system”, as well as a pricing policy for a manufacturer and its retailers. Further investigation is required into changes in the spatial economy, e.g., when a “linear” market is generalized to a “plane” market. Future research should thus consider: (i) empirical applications of the proposed restrictive measure, (ii) investigation of changes in the shape and size of each retailer’s market, and (iii) derivation of the resulting manufacturer’s and retailer’s profits and sales.