Manufacturer's Suggested Retail Price Research Articles

Manufacturers and Retailers Influence On Market Structure and Pricing

The market structure and pricing are two business aspects that work collaboratively to determine profitability. From the manufacturer and retailer’s point of view, the goal of setting prices is to maximize profits. Manufacturers are top-most market participants that produce goods and services, hence highly influence the market structure. Whether or not two or more manufacturers operate in the same market is largely influenced by the nature of business activity. This paper, therefore, investigates the influences of manufacturing and retail practices on market structure and pricing. In essence, manufacturers determine market elements such as barrier to entry, uniqueness of products and scale economy, all of which are determinants of market structures. Using a quantitative approach, this research analyzes a host of literature to determine pricing strategies by manufacturers and retailers. Furthermore, research examines the four main market structures to determine how retailers and manufacturers affect their formation. The major finding, however, is that manufacturers determine and influence pricing in various ways, most notably by viewing price as a ‘four layer cake’, which includes four main elements: direct costs, manufacturing overheads, nonmanufacturing overheads, and profit. Apparently, both manufacturers and retailers use different pricing strategies, with the former affected by manufacturer suggested retail prices.

Abstract W P15: ADAPT Technique: A Direct Aspiration First Pass Technique for Stroke Thrombectomy

Background: The development of new revascularization devices has improved recanalization rates and time. We report our initial results with a new technique utilizing a direct aspiration first pass technique with large bore aspiration catheter as the primary method for vessel recanalization. Methods: A retrospective evaluation of a prospectively captured database of 81 patients at 6 institutions was performed on patients where the ADAPT technique was utilized. The device manufacturer suggested retail prices was tracked for all devices used during the procedure. The data represents the initial experience with this technique. Results: The ADAPT technique alone was successful in 63 of 81 (78%) cases. Eighteen cases required the additional use of a stent retriever or a Penumbra aspiration separator to achieve recanalization. The average time from groin puncture to at least TICI 2b recanalization was 34 minutes and 93% of cases were successfully revascularized. TICI 3 recanalization was achieved 53% of the time. On average, patients presented with an admitting NIHSS of 16 and improved to NIHSS of 6 by the time of hospital discharge. There were three procedural complications, none resulting in clinical sequelae. Discussion: This initial experience highlights the importance of the technique with which new stroke thrombectomy devices are used may be as crucial as the device itself. The ADAPT technique is a fast, simple and effective first approach to acute ischemic stroke thrombectomy. Utilizing the latest generation of large bore aspiration catheters in this fashion has allowed us to achieve excellent clinical and angiographic outcomes.

Do MSRPs Decrease Prices?

The nature of manufacturer's suggested retail prices (MSRPs) and whether their effect is pro- or anticompetitive is not well understood. We exploit a policy experiment in which a ban on MSRPs was imposed and then lifted a year later. Prices increased by 2.3 percent as a result of the ban and decreased by 2.6 percent when the ban was lifted. We find no indication that MSRPs lowered prices by acting as binding price ceilings and outline an alternative mechanism in which recommendations affect prices indirectly by providing information to searching consumers. We demonstrate that recommendations can increase search and reduce prices.

Factors that influence the selection of sterile glove brand: a randomized controlled trial evaluating the performance and cost of gloves

To determine whether glove use modifies tactile and psychomotor performance of health care providers when compared with no glove use and to evaluate factors that influence the selection of sterile glove brand. Forty-two anesthesia providers (nine anesthesiologists, seven nurse anesthetists, 20 residents, six student nurse anesthetists) enrolled in and completed this cross-over randomized trial from May 2010 until August 2011. Participants underwent standardized psychomotor testing while wearing five different types of protective gloves. Assessments of psychomotor performance included tactile, fine motor/dexterity, and hand-eye coordination tests. Subjective ratings of glove comfort and performance were reported at the completion of each glove trial. The manufacturer's suggested retail price was collected for each glove tested. There were statistically significant differences in touch sensitivity for all nerve distributions, with all glove types resulting in less sensitivity than a bare hand. When compared with the non-sterile glove, only the thickest glove tested (Ansell Perry Orthopaedic) was found to have less touch sensitivity. Fine motor dexterity testing revealed no statistically significant differences in time to completion amongst glove types or bare handed performance. In hand-eye coordination testing across treatment conditions, the thickest glove tested (Ansell Perry(®) Orthopaedic) was the only glove to show a statistically significant difference from a bare hand. There were statistically significant differences in glove comfort ratings across glove types, with latex-free, powder-free (Cardinal Esteem(®)), and latex powder-free (Mölnlycke-Biogel(®)) rated highest; however, there were no statistically significant differences in subjective performance ratings across glove types. Given the observed similarities in touch sensitivity and psychomotor performance associated with five different glove types, our results suggest that subjective provider preferences, such as glove comfort, should be balanced against material costs.

What affects customer success when bargaining for a new car? Some empirical evidence

Data about 233 new car models were collected, and a measure of customer success in bargaining for a new car (alpha) was created by computing the ratio between the discount received on the manufacturer's suggested retail price (MSRP) and the negotiable range (MSRP − dealer's car cost). One hypothesis was that customers who purchase more expensive cars succeed less in bargaining because of their higher time value. A second hypothesis was that a positive correlation between the negotiable range and alpha should exist, because of either customer incentives to bargain or dealer's bargaining strategy. Both hypotheses were supported by the data.

Chrysler and J. D. Power: Pioneering Scientific Price Customization in the Automobile Industry

Pricing is a critical component in the marketing-mix plans of automobile manufacturers. Because they tend to keep their manufacturer's suggested retail prices (MSRPs) and wholesale prices fixed throughout the model year, they customize pricing to reflect supply and demand by using incentives; in the US market, they represent approximately $45 billion per year. In addition, variations in capacity utilization have immediate and substantial effects on profitability. This, together with legacy costs and inflexible labor contracts, makes the effectiveness and efficiency of price-customization decisions particularly vital for the industry. Chrysler, a pioneer in using science in its pricing decisions, engaged J. D. Power and Associates (JDPA) to implement an incentive planning model. The approach used is based on a random-effects multinomial nested logit model of product (vehicle model), acquisition (cash, finance, lease), and program-type (e.g., consumer cash rebates, reduced interest-rate financing, cash/reduced interest-rate combinations, lease-support) selection. The model uses sales transaction data that are collected daily from approximately 10,000 dealerships. It uses a hierarchical Bayes modeling structure to capture response heterogeneity at the local market level. This specification allows users to apply the model to pricing decisions at the local, regional, and national market levels. Based on implementing this model, Chrysler learned that, for any given price level, the pricing structure (e.g., a combination of retail price, interest rates, or rebates) is important. The set of the most efficient pricing structures for each price level constitutes an efficient frontier; efficient pricing structures vary across products, price levels, and markets. The system provides three alternative approaches to identify efficient (and effective) pricing programs: (a) what-if-scenario simulations, (b) a batch scenario generator that allows users to identify and examine the profit-share/volume efficient frontier, and (c) an optimizer that, given an objective and a set of constraints, allows users to search for incentive programs rapidly. The Chrysler Corporate Economics Office estimates that Chrysler's annual savings from implementing the model are approximately $500 million.

Using invoice price information to frame advertised offers

The present studies consider the presence and absence of invoice price (IP) information (i.e., the cost to the seller) and the inclusion of offer fairness (OF). In addition, the relative effectiveness of invoice vs. manufacturer's suggested retail price (MSRP) frames is considered. Briefly, the results of our studies provide supportive evidence of the positive framing effects of invoice or cost information in retail price advertising. Specifically, higher promoted invoice prices increased transaction value (TV), acquisition value (AV), and perceived OF. Counter to our predictions, perceptions of quality were not directly affected by either sale price or invoice amount. Further evidence of the positive effects of invoice information was provided by the negative relationship between sale price and OF being moderated by the provision of the higher invoice amount and by the larger effect sizes associated with invoice differential prices than comparable MSRP claim differences.

Dealers Coercing Manufacturers: A Proposal for a Unilateral Antitrust Offense

Suppose a widget manufacturer supplies two dealers in the same city. One of the dealers (the dealer) sells the widgets at the manufacturer's suggested retail price. The full-price dealer advertises extensively and hires an expert sales and service staff to help customers before and after their purchase.1 The other dealer (the discounter) attracts customers by selling widgets at a discounted price. Consequently, the discounter employs only a minimal support staff. After losing much of its business to the discounter, the full-price dealer complains to the manufacturer, claiming that the discounter has unfairly diverted business from it by taking a free ride2 on its advertis-

A model of intra-brand competition and related pricing policies for manufacturers

Casual observation suggests that retail price distributions develop for products sold by retail outlets that are not restricted in their pricing by the manufacturer. Manufacturers, however, often restrict retailers so as to promote a uniform retail price — manufacturer's suggested retail prices and minimum resale prices are examples of such policies. This paper examines retail competition under assumptions that imply, in the absence of manufacturer-imposed restrictions, the development of an equilibrium retail price distribution. It is then shown that, depending on the distribution of consumer search costs and on the dispersion of marginal retailing costs, the manufacturer may find certain vertical pricing restrictions (either uniform, minimum, or maximum prices) to be more profitable than simply choosing an optimal wholesale price schedule and allowing retailers to price as they wish.