1. How do retailers use reward power to influence manufactures, please give at least three examples.

 

2. (Case Analysis) - Conflicts in LSP 

LSP is a well-known toys maker in China and it dominated the market for educational toys. In the past it sold its products through traditional toy merchants who paid high wholesale prices, and these merchants then sold products to retailers such as department stores, toy stores and supermarkets. After the Toys "R" Us chain, category killer (giant discount toy specialist) entered in China, LSP began cooperation with Toys "R" Us. But Toys "R" Us bought large volume of toys directly from LSP at a low wholesale price. It caused retaliation from the traditional toy merchants and retailers. They boycotted LSP. LSP had the possibility of signing on other accounts (massive discount stores, such as Walmart, Carrefour), but was unable to do so. Because Get the Toys "R" order, LSP had granted the chain exclusivity in the mass-merchant channel. Rebuffed, Walmart and Carrefour instead took on another brand competing with LSP. 1. Please draw the channel structure of LSP according to the case. 

 

1. Please draw the channel structure of LSP according to the case.

 

2. What types of conflicts (Horizontal or Vertical conflicts) may occur in such a channel? What are the two parties involved in the conflicts?

 

3. Why do these conflicts occur?