Abstract:Resale price maintenance (RPM) is a channel pricing strategy that restricts the price below which a reseller may sell a manufacturer’s product. More than $300 billion in U.S. sales are affected annually by RPM agreements. Adopting a marketing perspective and analyzing trends in distribution arrangements and marketing channel systems, the authors offer predictions regarding the antitrust treatment of RPM following the Supreme Court’s decision in Leegin Creative Leather Products, Inc. v. PSKS, Inc. (2007). This … Show more
“…As new channels proliferate, so too are consumers engaging in cross-channel "research" shopping: gathering product information at one retailer and then purchasing the product from another retailer (Ailawadi and Farris 2020;Verhoef, Neslin, and Vroomen 2007). Following these developments, two schools of thought have emerged to guide distribution practice (Gundlach and Krotz 2020).…”
Section: Developments In Omnichannel Distribution and Cross-channel S...mentioning
confidence: 99%
“…This approach challenges the basic logic of the free riding thesis and thereby has potential to impact the competitive assessment of price maintenance. The potential impacts of omnichannel distribution have been discussed in academic research (Gundlach, Cannon, and Manning 2010;Gundlach, Frankel, and Krotz 2019;Gundlach and Krotz 2020;Gundlach, Manning, and Cannon 2011) and by legal professionals (American Antitrust Institute 2011; Wilson Sonsini 2020). However, extant research has yet to analyze the impact the legal treatment of price maintenance.…”
Section: Developments In Omnichannel Distribution and Cross-channel S...mentioning
Competition policy and law toward price maintenance (e.g., resale price maintenance, unilateral price policies, minimum advertised prices, and others) draws upon scholarly perspectives and theory developed over a half century ago. Since that time, changes to marketing practice have caused scholars to question the practical relevance of the perspectives and theory and to call for the modernization of competition policy and law toward price maintenance. Responding to these calls, the authors examine three important developments in contemporary marketing practice and assess their impact on the legal treatment of price maintenance in the three largest economies: the United States, European Union, and the People’s Republic of China. Their analysis reveals significant differences in how each jurisdiction is responding to (1) increasing market concentration and accompanying shifts in interfirm power, (2) advances in information technology and the commercial use of the Internet, and (3) developments in cross-channel shopping and the rise of omni-channel distribution. Their findings pose implications for future public policy, marketing practice, academic scholarship, and contribute to the modernization of competition policy and law.
“…As new channels proliferate, so too are consumers engaging in cross-channel "research" shopping: gathering product information at one retailer and then purchasing the product from another retailer (Ailawadi and Farris 2020;Verhoef, Neslin, and Vroomen 2007). Following these developments, two schools of thought have emerged to guide distribution practice (Gundlach and Krotz 2020).…”
Section: Developments In Omnichannel Distribution and Cross-channel S...mentioning
confidence: 99%
“…This approach challenges the basic logic of the free riding thesis and thereby has potential to impact the competitive assessment of price maintenance. The potential impacts of omnichannel distribution have been discussed in academic research (Gundlach, Cannon, and Manning 2010;Gundlach, Frankel, and Krotz 2019;Gundlach and Krotz 2020;Gundlach, Manning, and Cannon 2011) and by legal professionals (American Antitrust Institute 2011; Wilson Sonsini 2020). However, extant research has yet to analyze the impact the legal treatment of price maintenance.…”
Section: Developments In Omnichannel Distribution and Cross-channel S...mentioning
Competition policy and law toward price maintenance (e.g., resale price maintenance, unilateral price policies, minimum advertised prices, and others) draws upon scholarly perspectives and theory developed over a half century ago. Since that time, changes to marketing practice have caused scholars to question the practical relevance of the perspectives and theory and to call for the modernization of competition policy and law toward price maintenance. Responding to these calls, the authors examine three important developments in contemporary marketing practice and assess their impact on the legal treatment of price maintenance in the three largest economies: the United States, European Union, and the People’s Republic of China. Their analysis reveals significant differences in how each jurisdiction is responding to (1) increasing market concentration and accompanying shifts in interfirm power, (2) advances in information technology and the commercial use of the Internet, and (3) developments in cross-channel shopping and the rise of omni-channel distribution. Their findings pose implications for future public policy, marketing practice, academic scholarship, and contribute to the modernization of competition policy and law.
“…In addition, research that aids in the application of competition policy and law to specific sectors of the economy shows considerable promise (e.g., technology, health care, agriculture). Examples of research in JPPM that builds on the intellectual foundations of economics and industrial organization to augment competition policy and law includes work that addresses the conceptual and theoretical foundations of antitrust (Gundlach 2001a, b; 2002a, b; Gundlach and Phillips 2002), resale price maintenance (Gundlach and Krotz 2020; Gundlach, Manning, and Cannon 2017), category management and captains (Desrochers, Gundlach, and Foer 2003), slotting allowances and practices (Gundlach and Bloom 1998; Wilkie, Desrochers, and Gundlach 2002), predatory pricing and practices (Dixit et al 2006; Gundlach 1990, 1995), essential facilities (Gundlach and Bloom 1993), collaboration (Gundlach and Mohr 1992), and consumer welfare and efficiency (Gundlach 1996).…”
In this JPPM article for the 40th Anniversary of the Journal of Public Policy … Marketing, the authors first share what is meant by “policy,” “public policy,” and “marketing and public policy” for researchers in our field. The authors then offer examples of JPPM research informing policy across different stages of the policy making process: problem identification, agenda setting, policy formulation, budgeting, implementation, and evaluation. They also discuss important sources of public policy (e.g., federal, state, and international agencies; self-regulation; the courts; nonprofits; society; industry standards; company policies; personal ethics) and their role in the marketing and public policy process. The authors then offer JPPM application examples (e.g., consumer protection; anti-trust/competition; vulnerability; diversity, equity, and inclusion; nutrition labeling; addiction, cannabis, and anti-drug research; tobacco warning labeling and education; and privacy and technology) and share ideas for developing research that contributes to the marketing and public policy discipline and in making a positive difference in society and people's lives.
“…The result is that the nature of interaction in these arrangements is less compatible, if not at odds, with the development and implementation of unilaterally oriented channel pricing strategies (i.e., UPPs) and more conducive to the type of collaboration and cooperation associated with an agreement. To the extent these impacts are found in a given distribution arrangement, they are likely to have an important effect on whether a manufacturer and retailer reach an agreement to engage in RPM (Gundlach & Krotz, ). We offer the following research proposition: P 7 The more manufacturers and retailers adopt relationship‐directed approaches for managing their interfirm interactions, the more likely their arrangements to establish the minimum price below which retailers can sell their products will involve an RPM agreement. P 8 : The less manufacturers and retailers adopt relationship‐directed approaches for managing their interfirm interactions, the more likely their arrangements to establish the minimum price below which retailers can sell their products will involve a unilateral price policy (i.e., UPP).…”
Section: Developments In Supply Chain Managementmentioning
Building on research in supply chain management (SCM) that aids in the workings of society, the authors illustrate how SCM research can advance public policy and law. Using competition policy and antitrust law as an example, they consider how developments in SCM thought and practice augment economic understanding of vertical restraints involving minimum resale price maintenance (RPM). Developments affecting the organization of supply chains, firm‐level strategies for the management of retail distribution, and the interactions of supply chain participants are investigated. The findings advance knowledge of the primary procompetitive and anticompetitive theories of RPM found in competition policy and antitrust law. They also illustrate the potential of SCM to expand its reach and impact through studies that address the interplay of SCM and public policy and law.
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