The New Euro-Markets: Sales Promotions, Market Structure and Policy in vertically-related Distribution Channels

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Project objective

Research objectives and contentThe coming European Monetary Union will bring out a relatively more effective internationalisation of European markets. The considerable reduction of transaction costs that the monetary integration will cause, will probably encourage firms currently selling their products to end users directly in their home countries to extend their market actions by either contracting distributors operating in distinct European regions or by establishing new points-of-sales themselves.The purpose of this research is three-fold:First, finding out the optimal sales strategies (and their profitability) regarding manufacturers and retailers selling to customers in markets differing in their intrinsic characteristics.Second, understanding the forces driving manufacturers entry as well as distributors entry and the sources of their dependence on (local and global) market regulation.Finally, evaluating the effects of alternative policy measures concerning the availability of particular sales promotion tools such as price discriminatory devices, targeted and/or discriminatory advertising, etc. on social welfare.Training content (objective, benefit and expected impact)Dynamic models featuring manufacturers and retailers decisions out entry and exit as well as optimal sales promotion strategies will be studied and developed. We will identify anti-competitive behaviour from part of manufacturers or retailers, and the market configurations supporting such collusive actions. The development of appropriate policy measures towards vertically related markets, both at the national and at the European level, will actually increase social welfare and improve the dynamism and the transparency of the European economy.Links with industry / industrial relevance (22)

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Participants

• Tinbergen Institute · ROTTERDAMCoordinatorNetherlands

Links

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