The purpose of this paper is to propose a virtual forward-buying model that allows for forward buying but reduces the channel cost with no major behavioral change on the part of manufacturers and retailers.
Using simulations, the authors compare the proposed virtual forward-buying model with the traditional forward-buying and everyday-low-price approaches.
The authors find that the proposed model leads to lower overall channel costs that are shared equitably between both the manufacturer and the retailer.
No primary or secondary is used, a situation that is usually very difficult to find in this area.
The paper presents a new method to improve trade promotion efficiencies that does not require a drastic change of habits for either the manufacturer or the retailer; allows the practice of forward buying to continue; and leads to channel cost reductions for both parties.
The paper presents research in an area that is under-researched due to lack of data.
Received 20 January 2010Revised 19 November 2010Accepted 5 May 2011
Poddar, A. and Donthu, N. (2013), "Improving trade promotions through virtual forward buying", Journal of Business & Industrial Marketing, Vol. 28 No. 1, pp. 16-28. https://doi.org/10.1108/08858621311285688Download as .RIS
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