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Coordinating channels under price and nonprice competition

Опубликовано на портале: 30-09-2003
Marketing Science. 1998.  Vol. 17. No. 4. P. 338-356. 
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Abstract This paper analyzes how manufacturers should coordinate distribution channels when retailers compete in price as well as important nonprice factors such as the provision of product information, free repair, faster check-out, or after-sales service. Differentiation among retailers in price and nonprice service factors is a central feature of markets ranging from automobiles and appliances to gasoline and is especially observed in the coexistence of high-service retailers and lower price discount retailers. Therefore, how a manufacturer should manage retail differentiation is an important channel management question. Yet, the approach in the existing literature has been to examine channel coordination under the standard "symmetric contracting" assumption that offering a uniform contract to all the retailers in a market will be sufficient for coordination. I bring this assumption into question and ask when is it optimal for the manufacturer to use the channel contract to deliberately induce retail differentiation (even if the retailers were ex-ante identical in their cost and other characteristics). The paper identifies the type of channel contracts that can endogenously induce symmetry as opposed to differentiation among retailers.Next, the paper highlights a type of channel conflict that arises from the very nature of retail price-service competition. A manufacturer might find the retailers to be excessively biased towards price competition at the cost of service provision or vice-versa. The paper establishes when a manufacturer is likely to stimulate greater price as opposed to greater service competition among the retailers.The framework that I develop to address these issues highlights the role of two basic types of consumer heterogeneity. Consumers are heterogeneous in their locations (as in the spatial models of horizontal differentiation) and in their willingness to pay for retail services (as in the models of vertical differentiation). The model al...

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См. также:
Rajiv Lal
Marketing Science. 1990.  Vol. 9. No. 4. P. 299-319. 
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