Growing clout of Retailers

Naveen's comments on my post on Sales Promotion raises an important issue that pertains to 'the growing clout' of organised retailers. It has indeed become difficult for manufacturers to get away from offering trade discounts and consumer oriented promotions, as these are demanded by organised retailers who know that their bulk orders make up a significant part of the the manufacturer's turnover.

The case of Frito Lays and its exit from Big Bazaar and Food Bazaar due to it not toeing the retailer's line demonstrates the dilemma faced by FMCG companies. Discounted selling does erode Brand Equity and this is not something manufacturers would want.

This battle between manufacturers and retailers is only going to get sharper in the coming future. The one to benefit is the consumer.

More power to the consumer!


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