Supplier Selection and Development: The Relationship between Small Manufacturing Enterprises and Mass Merchandisers

This study examines the results of a program intended to act as a selection tool for mass merchandisers and a development tool for small manufacturers. The evaluation program assessed the management practices and products of potential suppliers. Based on past experience, buyers for mass merchandisers consider small manufacturing enterprises a poor risk as potential suppliers of retail goods. As part of the evaluation process, firms were asked 34 closed-end questions regarding their management practices, and each product was evaluated on 41 specific qualities necessary for the mass merchandising market. Of the 1,690 firms that participated in this project, about 5 percent had their products accepted by a national mass merchandiser. A review of the evaluation data reveals that firms needed high performance in both areas of evaluation to be successful in the marketplace, not just a strong firm or a marketable product. However, each of these areas separately had a statistically significant effect on the success of the product in gaining a retail buyer’s attention

Inventions and Innovations: Does Stage of Development Matter in Assessments of Market Attractiveness?

The purpose of this study is to determine whether market attractiveness is affected by the product\u27s developmental stage-specifically, invention vs. innovation. Two databases were combined for this study to assess prototype or market-ready products (innovations) and ideas submitted by inventors and manufacturers (inventions). On average, invention stage products were more attractive to evaluators than were innovation stage products; however, one critical factor - the ability to create a new venture from the product - was significantly higher for innovations. In addition, overall market readiness was on average more than 10 percent higher for innovation stage products than those at the invention stage. Stepwise regression results indicate that stage of development and new venture likelihood are more critical than other factors in deciding the market viability of a product

Does It Matter If Your Company Runs Like a Lexus, a Chevy, or a Yugo?

Conventional wisdom states that most small firms have a high failure rate (as much as 90 percent within the first year). Recent research indicates that the death rate among small firms may not be as high as previously thought. However, does failure equal death and success equal survival? Does simply not going bankrupt indicate a successful firm? This paper suggests that while survival is important, so is a firm’s standard of living. We theorize that running at a Lexus level does not ensure success and running at a Yugo level does not predict failure, but firms may be judged as more successful in the marketplace by performing at the higher level. We have preliminary data which shows that firms can survive at various levels of management expertise, but successful alliances with other firms is most likely to take place only for higher level performers

The Fate of Gender-Affiliated Products in Mass Merchandising

This paper examined the factors that are critical for small health and beauty aid (HBA) manufacturers to become Wal-Mart suppliers. The sample firms for this study were small HBA manufacturers who participated in a mass merchandising screening program. Participating firms submitted their product for external evaluation, and each product was either rejected or sent on to the mass merchandiser for buyer review. Exploratory factor analysis was used to determine the factors that were critical in deciding which products were suitable for Wal-Mart\u27s buyers to examine. Owner gender and product gender were also examined using chi-square analysis and independent t-tests. We found that mass retailers wanted HBA products that have demand stability and low risk potential, and male-owned firms seemed to have better success in the mass merchandising marketplace because of the type of product that they submitted. Only 31 percent of male-owned firms submitted gender-affiliated products compared to fifty percent of female-owned firms. In our study, gender-affiliated products were found to be less successful than unisex products at getting forwarded onto Wal-Mart for buyer review and at receiving actual shelf space

Market Orientation for Small Manufacturing Suppliers: The Importance of Product-Related Factors

Purpose The purpose of this paper is to investigate the role of market orientation for small manufacturers vying to be suppliers in the mass retail marketplace. It examines the mediating effect of product‐related factors (market readiness and market level) on the market orientation‐performance relationship. The paper also assesses the performance of these manufacturers using measures such as buyer review and actual product acceptance. Design/methodology/approach This paper uses the results of a program, designed to evaluate and develop small manufacturers for the mass retail marketplace, to test the effect of a market orientation philosophy and product‐related factors on small firm performance. Findings It is found that while a market orientation is critical for the success of these manufacturers, product‐related factors have an even greater value in assessing their performance. Specifically, an evaluator\u27s assessment of a product\u27s readiness for the marketplace and his/her recommendation for the type of market it should enter were much better at predicting product performance for the small manufacturers taking part in the program. Practical implications The paper shows that small firms wanting to supply the mass‐merchandising marketplace should not rely solely on market orientation when trying to compete at this level. Market orientation may improve your market readiness, but it does not predict success for small manufacturers. Instead, low market orientation levels and poor product‐related factors strongly predict failure. Originality/value To the authors\u27 knowledge no other articles examine market orientation\u27s effect on small manufacturing performance using specific product‐related measures as a mediating variable