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HW 2 ques. 8-9

HW 2 ques. 8-9 - Chapter 2 questions Group 8 February 3...

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Chapter 2 questions Group 8 February 3, 2010 8) The average size of retail units has been increasing. What are some of the implications of this trend for channel management in producing and manufacturing firms? The increase in size of retail units can be attributed to growth as well as mergers, acquisitions, and buyouts. A direct response of the merging retailers is that a smaller number of retail firms control a larger percentage of sales. As the retail units continue to increase, their buying power becomes greater allowing them to influence other channel members. This increase in sales can be as high as hundreds of billions of dollars like in the case of Wal-Mart. At this size, the retails have become many times the size of the manufactures and more sophisticated and demanding channel members. When the retailers get so much larger and wealthier than their manufactures, there is a shift in power. The small manufactures become reliant on the business of the large retailers. This means that if the retailers want something, the
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