Question

8) Food/CPG manufacturers and retailers have not always enjoyed collaborative relationships. In fact, the history of supplier-retailer relations in the industry has been more contentious, with strategies and tactics of both parties that have undermined trust and collaborative efforts on both sides of the relationship. Explain the basis for the underlying “eternal conflict” between manufacturers and retailers.

Answer 1

Explain the basis for the underlying “eternal conflict” between manufacturers and retailers.

Consumer packaged goods(CPG)/Foods these are the foods that will have very short span based on their demand and availability. These products are low cost and needs to be sold with immediate effect. These products are made available for customers in a package which needs to be consumed with in the limited due date. These products are intended to be used quickly.

In these products the profit margin will be very less compared with other products but they are sold in a large quantity they will have high returns. Most of the manufacturers interested to work on these products because they don’t need much storage and can be quickly delivered in the market as big lots to gain high profits.

These products should be hygienic and attractive in package in order to promote the product and fast move in the market. These products especially have high pressure to bring new product and promotion development to being innovative products in the market and quickly attract the markets.

Eternal conflict: An eternal conflict is something that plays an equal role and combat system in the market. In simple terms it is defined as the manufacturer and retailer plays an equal role in bringing these products in a competitive mode.

In this competitive world retailer and manufacturer relation plays an important role especially these CPG products which needs to be bring to the market. It’s not only make them good in the market but also they can mutually grow in bringing these innovative and huge product supply in the market. The eternal conflicts between the manufacture and retailer are:

1. Internal and external competition: in the market these conflicts arises when there is a new brand in the market. that usually will have to create a demand in the market and from retailer needs to promote these products to consumers as a result of increase consumer demand in the market. If retailer and consumer relations are not good than these products will not create a demand in the market.
2. Operational conflicts between manufacturer and retailer: when the products and its services are not up to the mark than retailer may choose different brand products. Than there will be an operational conflict between manufacture a retailer. These usually happens when there is a pressure from the manufacture about increase of sales for their products.
3. Dependency conflict between manufacturer and retailer: these usually happens when there is complete dependency between both of them. These will have anyways but these dependencies should convert growth oriented not a conflicts. The retailers or manufactures completely depends on each other with complete trust.
4. Change conflict between manufacturer and retailer: if there are any change in the products manufacture and supply than there will be conflicts.
5. Strategic differences conflict between manufacturer and retailer: if there are strategies differences that applied in the market that fails may result with these conflicts. The clear understanding and coordination is required while applying any new strategies and plans.