did the company do the right thing by extending the in-store brand to the wholesale channnel?what should it do now?
take Bobcat india limited, revolutionized footwear selling in india . company reached customers through retail stores
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If I understand your scenario...you have a retailer that has developed an in-store brand of merchandise. It appears to be shoes selling in India. This store has taken their in-store brand and merchandised it through its wholesale channel. The problems I see with this are several but I must start with some questions as I do not feel there is enough information given.
If the in-store brand (brand) carries the store label through the wholesale channel then it in one way is weakening its value. Why? Well, let's say that the store name has high recognition and value so that a shoe with that name commands a greater demand. This is good for the store's bottom line. However, should this brand now go through the wholesale channel, it will be available in many more outlets. This is good for exposure and maybe sales but the perception is now weakened and this may drive down demand as the value of the line may be viewed as cheapened. What I'm saying is there is a certain interest to a product that is somewhat exclusive. Take away that exclusivity, make it available at every street corner, and its value is diminished greatly. The product is viewed as cheap or too easily attainable and the price it can draw is diminished. Add to that fact that retailers will charge different prices for this line. At some point will they underbid oneanother to get the sale? Will the underbidding be so much that the price point is less than the wholesale cost? If so, and it probably will get there sooner than later, you will soon see retailers trying to dump the line just to recoup some of their investment. The early dumpers will get the most for their dollar. But through all of this you wipe out a line that could have done relatively well had its exclusivity remained tied to one retailer.
So do I think the company did the right thing? It truly depends on what their goals were with the line as you can see by my answer.
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