Guggenheim Museum Publications System †MyAssignmenthelp.com

Question: Discuss about the Guggenheim Museum Publications System. Answer: Introduction: Resale price maintenance refers to an agreement between manufacturer and retailer on the minimum price the retailer should not charge below. This means the prices for products are determined by the manufacturer, and the retailers do not have permission to sell manufacturers product below the set price (Brinson, 2012). Minimum advertised price is the lowest price which the retailer can advertise manufacturers product. Retailers who enter an agreement on the minimum advertised and selling price with the manufacturer should be able to maintain the agreement throughout their business operations. Hugo boss has the right to specify the price below which the retailers should not sell the clothes. The agreement between Hugo boss and the retailers when entered becomes binding .the retailers will have to follow the agreement strictly because they would face the consequences if they fail (Brinson, 2012). Since Hugo boss has the market power, he can decide on minimum advertised and resale prices while giving the retailers incentive in order to maintain the agreement as well as prevent new entrants from the market. The manufacturer and the retailers can come to an agreement on resale price (Dailey, Franzen and Schaefer, 2002). This will prevent stiff competition from the producers and distributors and minimize price wars among retailers. When the retailers do sale the clothes below the resale prices set by the manufacturer, it can lead to termination of contracts. Therefore, the manufacturer may end up not supplying the retailers with the suits. The agreement on prices reduces problems that can arise between manufacturers and retailers. Conflict of interest that may lead to retailers reducing the prices for the suits in the event of increasing sales and attracting more customers is avoided. This can be in the form of reducing prices for the suits in order to counteract other retailers prices and take customers from the retailers with higher prices for the suits. The brand image of the suits is maintained when retailers do not sell them cheaper. The cost incurred on display of the products in the shops should be a burden of the retailer and not the manufacturer or the buyer. Also, the cost of advertising should not be below the agreed cost with the manufacturer. The customers should get to know that the particular brand of suits cannot be acquired at any lower prices (The Hugo Boss Prize 2000, 2000). All the retailers should maintain the advertisements at an agreed range of prices. In this case, to survive as well as thrive i n the industry, Hugo boss needs to ensure that the retailers are respecting the agreement by constantly monitoring the retailers performance. This eventually reduces brand and price competition among competing manufacturers. There will be few competing products with the suits since minimum price required will make the product expensive and of a high quality. The specific retailers will have exclusive right to sell the suits. The price agreement is beneficial to the manufacturer since it leads to better contracts and expands territory to carry out their businesses. More retailers will want to work with the manufacturer as there will be an increased demand for the product. The agreement can be protective of the brand of the manufacturer and provides the retailers with exceptional promotion strategies such as advertising (The Hugo Boss Prize 2006, 2006). The agreement will enable the distributor to recover the cost incurred in promotional activities. The promotional costs are recovered from the sales, meaning the customer bears the cost of advertising. By setting the minimum prices for advertising, Hugo boss will protect the value of the suits as well as protect retailers from fierce competition amongst themselves. Retailers will not lower or raise the prices as they wish in case they want to increase sales of the suits. Retailers can compete well at the same time increasing sales of the suits. If the retailers enter the agreement with Hugo manufacturer, they should abide by the rules. The agreement can be written or verbal hence binding. It can be a form of policy by the manufacturer. All the retailers have the responsibility to agree or disagree on the manufacturers demand. In the event that the retailers violate the conditions, the manufacturer can stop working with the retailers or take legal action on the retailers. Whereas retailers need to make more profits, they should find ways that they can attract more customers without going against the agreement. The retailers can provide shipping services to the customers as a way of creating customer loyalty so that they do not affect the prices of the products. Online retailers should display the suits with prices in line with the minimum required prices by the manufacturer. This will allow customers to compare prices for different retailers and same products before making purchase (The Hugo Boss Prize 2006, 2006) s. This gives businesses that are small and new to the market fair competition with those that are big and established. Hugo manufacturers should be able to deal with retailers who will not follow the agreement on minimum price and advertising prices. This is because when retailers do not follow the minimum requirements, they end up damaging the value of the product. Those who will sell and advertise below the minimum required price will portray the suits as cheaper and of low quality. Reduced sales of suits will be as result of retailers selling below the minimum price. This is because customers will not buy the suits from those retailers who are conforming to the set minimum price since they can get the same suits in the unauthorized retailers with less money. Those retailers who will not follow the minimum requirement for prices may sale the suits below the prices set and attract customers than other retailers. Sales will be reduced in the end. Hence the retailers who adhere to the agreement get low profits. The minimum price agreement is beneficial to the retailers. It leads to more profits for the retailers. This is because it reduces price wars between retailers (The Hugo Boss Prize 2006, 2006). Those retailers who buy in small quantity are supported from being crushed by big retailers that order in large quantity. It leads to a good relationship between manufacturers and retailers. Retailers who advertise manufacturers products and also those who have good customer relations product get rewarded (The Hugo Boss Prize 2008, 2008). The agreement saves on customers time in that they will not move around comparing prices since they are aware that it is the same everywhere for the same products. References Brinson, K. (2012).The Hugo Boss Prize, 2012. New York: Guggenheim Museum Publ. Brinson, K. (2012).The Hugo Boss Prize, 2012. New York: Guggenheim Museum Publ. Dailey, M., Franzen, E., and Schaefer, C. (2002).The Hugo Boss prize 2002 : Francis Aly?s, Olafur Eliasson, Hachiya Kazuhiko, Pierre Huyghe, Koo Jeong-a, Anri Sala. New York, NY: Guggenheim Museum Publications. The Hugo Boss Prize 2000. (2000). New York: Guggenheim Museum Publications. The Hugo Boss Prize 2006. (2006). Ostfildern/Ruit: Hatje Cantz. The Hugo Boss Prize 2008. (2008). New York: Guggenheim Museum Pub.