Retailer-Supplier Relationship in the UK Fruit and Vegetable Market

1. Retailer-Supplier Relationship in the UK Fruit and Vegetable Market Presentation at Ministere de L’Enseignement Superior et de la Recherche, Paris, France, 1999. Blankson and Manoocheri (1999) Charles Blankson, Ph.D., Department of Marketing & Logistics, UNT

2. A major EU sponsored project on fruits & Vegetables: The UK project focused on three sectors • Fresh Fruits • Poultry • Fresh Milk Products • Note: Research conducted for the European Union under the auspices of Department of Marketing, Kingston University Business School, London, England (www.kingston.ac.uk) 1997-1999.

3. Areas under investigation • Relations with existing suppliers • Introduction of new products • Terms and conditions of contracts • Strategic and operational/tactical objectives • Assessment of new product success/failure

4. Methodology/Respondents • Initially we reviewed secondary data • Telephone conversation with identified respondents seeking collaboration/help with our research • Finally, face-to-face interviews embarked upon with: • 20 Management/senior buyers of retail companies • 10 Management/senior sales staff of supplier companies.

5. Relations with existing suppliers • Overall, supplier/retailer relations are sound. • The main features of a good relationship are: • Length of service • Good communications • Easy access to personnel • Rapid response to requests • Effective delivery.

6. Factors affecting relations are: • High quality of products • Continuity in means of supply • Maintenance of high standard of service.

7. Introduction of new products: What is a New Product? • A new variety of an existing product • New generation of product, never seen before • A genuine alternative to fill in the market (gap in the market) • New presentation of existing product.

8. How to choose a New Supplier • Previous experience of/relations with the supplier (mktg. mix issues) • Reputation of supplier in the market place (branding, positioning issues) • Persuasiveness of supplier (mktg. mix issues) • Quality of product (positioning issues).

9. Where do New Products come from? • Most suppliers in the UK are importers • New products are likely to come from South America, South Africa, Asia and the Orient.

10. Terms & Conditions of contracts All suppliers comply to the same schedule of conditions • Suppliers are given the same Terms & Conditions • Schedules are standardized for all products • Variations exist only where essential • Suppliers’ performance is monitored daily.

11. Where suppliers do not honor contracts… • Sanctions and penalties are implemented • There are no centrally formulated sanctions • Warnings are usually sufficient to redress problems • Penalties depend upon the type of product affected • Penalties depend upon the severity of the breach.

12. Strategic and operational objectives of Retailers Strategic objectives of Retailers • Innovation in raising product awareness • Accessibility of product price to the consumer • Reduction of wastage, and product discounting • Encouragement of supplier involvement in product promotion

13. Operational objectives of Retailers • Right volume delivery • Increase delivery time efficiency • Computerization of all data flow • Standardization of supply process • Utilization of all means of communication with supplier.

14. Assessment of New Product Success/failure Factors affecting success: • Does the product “eat well”? • Has it realized its sale potential? • Minimal wastage, minimal product discounting • Continuity of supply for the future. • Factors underpinning failure: • Product too expensive • Product too big • Difficult to standardize • Bad presentation • Inappropriate packaging.