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The Clash of the Titans: On Retailer and Manufacturer Vulnerability in Conflict Delistings
Journal Contribution - Journal Article
The days of dominant manufacturers dictating the game to obedient retailers are long gone. When parties believe they have equal bargaining power, negotiations end in deadlock more frequently and result in conflict delistings wherein the manufacturers’ brands get removed from the retailers’ assortments. This might cause major sales losses as consumers are forced to change stores or brands. The authors study both parties’ vulnerabilities by investigating their market share shifts during a highly publicized real-life conflict delisting executed by a major retailer against a major manufacturer, involving multiple brands and categories. Generally, both parties lost sales, yet the retailer was the most vulnerable party. Manufacturer-brand and retailer-assortment characteristics moderated both parties’ vulnerability: the manufacturer and retailer became respectively less and more vulnerable when a high-equity brand was delisted in a small assortment. Both parties lost more in necessity than in impulse categories. The authors additionally investigate long-term consequences that occurred after the conflict was settled: the retailer’s market share recovered to the predelisting level, whereas the manufacturer’s share underwent a long-term level rise.
Journal: Journal of Marketing
Pages: 118 - 135