This hold by the suppliers on the market decreases negotiating powers. The supplier comes with pre-determined margins, which leaves a very small percentage for negotiation. Also direct support for the brands by way of display rentals is limited with only the large brands having a small budget to spare since (country) market is considered “negligible” by most brand owners. In the absence of competition, the Suppliers tend to add direct brand support to their profits rather than spend it.
Retail Selling prices for approximately 50% of products are established in the market and customers are not willing to pay more, especially in the presence of such a large number of corner shops open till midnight.
3.c Categories and product availability
(Country) is an emerging market. The business groups in (country) started as late as in the 80's with large scale professional management. There is a severe lack of good primary research data.
As mentioned earlier, most of the products available through suppliers are imported and they are appointed Sole suppliers to (country). With the exception of the top 10, plus out of 170 suppliers, the suppliers in themselves are not professionally managed companies, and are being exposed to latest logistics and technology situations since only recently. Most suppliers bring in a container of products to test the viability and give up after the first container of products is sold or gets expired.
Despite all the issues highlighted, (Store name) has the core offer at all stores, as well as optional categories in the major stores. Special emphasis has been given to building supplier relations and ensuring that logistics issues are settled and products are available even in the far flung stores in the interior areas of (country).
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