A Brief Review and Assessment of the Leegin Decision: Who Wins and Who Loses When Manufacturers are Free to Set Retail Prices?
For decades, it has been a per se violation of U.S. antitrust law for manufacturers or distributors to specify retail selling prices. In the spirit of atomistic, unrestrained competition, retailers were free to set prices without undue interference from upstream channel participants. Attempts by manufacturers or other channel participants to restrict retail price setting initiatives were viewed by regulators as an unwarranted and illegal interference with the market mechanism. Restrictions on price setting initiatives would, it was argued, lessen competition and ultimately raise prices above competitive levels to the detriment of consumers. Recently, under the leadership of newly appointed Chief Justice Roberts, a more “business friendly” Supreme Court has reversed this policy; vertical price fixing is no longer a per se violation of U.S. antitrust law. By a five‐to‐four margin, the Court held in Leegin Creative Leather Products that manufacturers could, under certain circumstances, establish binding retail selling prices. Henceforth, retail price setting restrictions will be subject to a rule of reason evaluation whereby price restrictions will be assessed on a case‐by‐case basis. Proponents of the now‐legal restrictions argue that this will ensure that merchandise sold through retail outlets will receive needed support, free riding will be reduced or eliminated, and new brand introduction will be facilitated. Critics argue that the Court's decision marks a return to the days of fair trading; marginal firms will be protected, so‐called “inframarginal consumers” will be forced to pay for services they do not want or need, and prices for many branded products will rise, all to the detriment of consumer welfare.
From “Mom and Pop” to Wal-Mart: The Impact of the Consumer Goods Pricing Act of 1975 on the Retail Sector in the United States
A leisurely drive through the suburban shopping districts of virtually any American city reveals the successful inroads that large mass merchandisers have made into the retail sector in the United States. At the same time, the once-thriving downtown shopping areas of many of these same cities are now rife with boarded-up retail storefronts. Unfortunately, the rise of the corporate retail superstores has come at least in part at the expense of traditional, local, "mom-and-pop" dealers. While shoppers seem to uniformly appreciate the often lower retail prices available at the mass merchandisers, many also rue the loss of personalized customer service previously provided by friendly, local dealers. In this paper, I examine in detail these retail changes in the United States. Using time series data covering the last 40 years, I first paint an empirical picture of the retail sector, providing numerical evidence of the migration from smaller dealers to fewer, larger retail establishments. With this movement toward mass merchandising, there has indeed been a reduction in the level of point-of-sale information services offered to customers on the retail shop floor. Put simply, the empirical evidence is consistent with the casual, anecdotal story told above. But what lies behind this transformation of the retail sector in the United States? I posit that an important piece of federal legislation, the Consumer Goods Pricing Act of 1975,1 which effectively outlawed the manufacturer practice of resale price maintenance (RPM), played a key role in the demise of small, service-oriented retail
Application of the Kano Model for a Better Understanding of Customer Requirements in Higher Education—A Pilot Study
Various pieces of information and knowledge turn into “know-how” simply by their application in the market. This applies to all spheres of activities. It is therefore important to know and understand the requirements of customers already in the stage of making a product, and to confront these with the possibilities of a producer. In this article we are exploring the possibilities of a better understanding of the requirements of customers and stakeholders in the process of the creation of products in educational services. In particular, we examined seven general requirements: practice orientation, ethical orientation, research orientation, quality resources, innovation orientation, skills orientation, and quality staff. We use the Kano model on a pilot sample of respondents at an institution of higher education. Our results showed that “practice orientation” and “quality resources” are the most stable requirements, while “quality staff” is the least stable. The most linear requirement (the same effect on satisfaction and dissatisfaction) is “innovation orientation”. “Research orientation” belongs to attractive requirements and we also found that in the case of “ethical orientation” there are weak relations between positive and negative responses in our survey. The “skills orientation” proved to be too general, and our research shows that it could be indifferent. It is therefore advisable to specify the investigated skills when investigating requirements on educational services. The main contribution based on the proposed research procedures is an effective linking of customers and producers already from the beginning of constructing a value chain. Investing in sophisticated management approaches when modelling products and processes can thus become a significant source of the competitive advantage of an educational institution. At the same time, it is a contribution to better placing of its graduates in the labor market.