Marketing channels have faced rapid structural and functional transformations during the last few decades. While a large body of research has been devoted to understanding the supply-side aspects of marketing channels, much less research has taken the demand-side perspective to study consumer perception of channel position and functions. This article extends the channel literature to a broader domain and develops a consumer-based theoretical framework reflecting factors that influence consumer perception of and reaction to channel strategies and decisions. The authors conceptualize that consumers' perceived channel value is a critical factor in determining their loyalty behavior. Seven important channel features are identified that would positively influence the perceived channel value. The relationship between perceived channel value and channel preference is strongly dependent on the level of customer value co-creation. The article concludes with research implications and suggestions of avenues for future research.
Consumer logistics (CL), focuses on the role of consumers in the logistical processing of goods for the purpose of consumption from point of acquisition to the point of disposal. The objective of this study is to test and validate the CL scale as introduced by Bahn, Granzin, and Tokman for grocery shopping in a previously unexplored country setting, namely in Turkey. Our findings show in contrast to Bahn et al. only six CL functions: information search, transportation management and materials handling, storage management & inventory needs assessment, contingent inventory operations & product acquisition, intra-household communication, and interdependent transportation operations. These six CL functions are more applicable for an emerging market, such as Turkey. These findings are consistent across the different socio-demographic characteristics in our sample.
Although several interfirm cooperation studies have expanded the unit of analysis from dyads to triads (networks), there is scant literature focusing on whether and how a supplier's relationship with a customer influences its relationships with other customers. Individual relationship dyads are not isolated but interact with one another. Particularly, mutual trust in a supplier-customer relationship dyad may influence other customers' cooperative behavior. This cross-dyadic influence is called the "trickle-down effect of trust." A hypothesis for the mechanism by which this effect occurs was generated, focusing on the customers' demand information offerings as a cooperative behavior. The results of an empirical analysis indicate that (1) a supplier's mutual trust with its primary customer encourages nonprimary customers to offer their demand information to the supplier and (2) the quality of information from customers helps the supplier to make their new product more meaningful.
Domestic distribution in Vietnam is characteristic of an emerging market in the beginning stages of modernization, with frequent changes in retail format, a fragmented distribution structure, and ambiguous regulations. This study uses field surveys and comparative analyses of individual enterprises in Vietnam’s toiletry products industry to identify suitable channel strategies for emerging markets in the early stages of distribution modernization. The results indicate that partnership channels are more suitable than hierarchy and market governance channels. Moreover, among the various types of intermediaries, distributors provide a key role in emerging markets where transportation functions are undeveloped. Finally, the study investigates the various methods of partner selection, finding that effectiveness-oriented networks are superior to large-scale efficiency-oriented networks because they have greater channel coverage in modernizing emerging markets. The findings demonstrate the optimal channel structures and partner selection criteria for distributors in emerging markets.
Since the Balkans have not been covered with regards to franchising in any comprehensive fashion in the past, this study represents a first look at the topic in this part of the world and contributes to the literature on franchising in emerging economies. This research contrasts the development of franchising in the ten Balkan countries of Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo, Macedonia, Montenegro, Romania, Serbia, and Slovenia. A comprehensive overview of the franchise industry and its history is created for each country, integrating economic and franchise infrastructure development. The study reveals severe deficiencies in the region with regards to the availability of official data and a lack of specific legislation with regards to franchising and disclosure mandates, as well as education about franchising and a reliable legal environment. Implications for researchers and policy makers conclude the study.
Retail distribution is often organized into chain stores, where geographically dispersed units operate under a common trademark and operational routines. Franchising is an organizational form chosen by entrepreneurs to manage retail chains. Previous research has maintained that franchising is a solution to "the" agency problem. This article shows how franchising solves one agency problem, shirking, but creates another, free riding, giving rise to dual agency problems. We test which has a stronger effect on performance. Using stochastic frontier estimation, a technique from empirical economics, we show that marketing spending yields less sales for franchised chains relative to owned chains, suggesting that the loss associated with free riding dominates the gain from controlling shirking. Implications for theory and practice are discussed.
Deductions and claims to recover trade promotions incentives through post-audit of previous years' transactions is a highly contentious but prevalent practice in the industry. Retailers, given their low margins of operations, are motivated to seek every opportunity to obtain extra incentives from suppliers to boost their profits. They often hire third-party post-auditors to scrub through all their transactions and "deal sheets" or supplier agreements to search for potential unclaimed trade promotion dollars promised by suppliers in prior years. Third party auditors have an incentive to also make dubious claims as they are compensated on contingency fees of a percent of claims recovered. Such practices lead to acrimony between retailers and suppliers. They often have differing viewpoints and opinions about the contextual terms of the trade promotion deals itself leading to an opinion "chasm" that is sometimes difficult to bridge. The resulting tension among retailers and suppliers, along with regulatory compliance under the Sarbanes-Oxley Act, and prevailing questions on the role and practices of post-auditors, motivated this study. Conducted over a 24-month period with extensive collaboration and research discussions between the study team and responsible managers from leading US retail and manufacturing companies. The distinctive mix of academic rigor and practitioner relevance was the hallmark of this study that involved three retail summits conducted with industry participants to discuss the research method and its resultant findings. Evidence suggests that transactional discrepancies will continue to happen, despite technological advances, because of large volume of transactions and multiplicity of complex trade promotion methods in vogue in the retail world. So, as long as there are claim opportunities, post-audit recovery practices will continue, confounding the darker side of the retailer-supplier relationship. Through a multi-stage and multi-level study, and data from a variety of sources, we identify best practices in post-audit recovery and suggest ways to reduce associated conflict and improve relationship satisfaction.
Although marketing is commonly theorized to have originated at the dawn of exchange itself, few scholarly articles explore the history of marketing beyond this cursory recitation of the commonly accepted origin story of the field. The evolution of complex commercial exchange is presented as a natural outgrowth of the development of human society as opposed to the willful and intentional efforts of early merchants. Using disparate and archaic sources, this article synthesizes historical accounts and archival information to show that entrepreneurs have always practiced relational marketing from prehistoric eras and continued to do so throughout pre-industrial and post-industrial eras when the bulk of the literature claims that the scale of modern production rendered relational marketing ineffective and nearly obsolete. In doing so, we add to the virtually non-existent literature documenting entrepreneurial marketing in the early, pre-industrial history of commerce.
This study is an effort to shed light on the relationship between dealership loyalty and brand loyalty. The research questions posed in this study: What effect do dealership loyalty and brand loyalty have on consumer's intention to switch brands? Are consumers more loyal to the dealer or to the actual brand they purchase at the dealership? An automotive dealership group located in the Midwestern US allowed the researchers to survey its customers. Findings of this study demonstrated the higher the brand loyalty of the consumer, the lower the likelihood to switch brands. The higher the dealership loyalty of the consumer the higher the likelihood to switch brands. Brand loyalty appears to be more important than dealer loyalty. Brand loyalty and dealer loyalty are complementary at lower levels of likelihood to switch brands and are less complementary at medium to high levels of likelihood to switch brands.
This study represents a first comprehensive overview of the state-of-the-art of the franchise industry in South Asia. The development of franchising in the seven South Asian countries of Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, and Sri Lanka is outlined. A systematic overview of the franchise industry and its relatively short history in the region is created for each country, synthesizing economic and franchise infrastructure development. The study shows clear deficiencies across South Asia with regards to reliable legal regimes, specific franchise legislation and disclosure requirements, the availability of official data on franchising, and franchise education. Implications for policy makers and franchise academics conclude the analysis.
Business-to-consumer e-marketplaces are an important and fast-growing distribution channel. Nevertheless, there is a lack of literature that attempts to describe and classify business-to-consumer e-marketplaces and to analyze their role in the distribution channel. This article seeks to address this deficiency and to add clarity to our understanding of these two-sided platforms. A new innovative marketing functions concept is developed: the PILT framework. It consists of four main functions-product, information, logistics, and transaction-and ten subfunctions. Applying this framework reveals that business-to-consumer e-marketplaces are infomediaries, completely fulfilling only information functions. All other functions must be managed by the sellers themselves or outsourced to other intermediaries such as logistics companies or banks. A case study of Amazon and Walmart Marketplace is presented to further illustrate the PILT framework. It reveals that Amazon Marketplace fulfills more marketing functions than Walmart Marketplace, which may be an important success factor for B2C e-marketplaces.
A firm's governance structure and business model might explain the firm's failure or success. Franchising is a business model that has not received much attention within the corporate governance (CG) literature even though it obviously brings several unique CG challenges. Therefore, we review articles at the interface of CG and franchising. We identify and thematize the literature in four focus areas, each with a different relationship to CG: 1) traditional CG, 2) governance challenges unique to franchising, 3) governance modes, and 4) contracts. We find that the literature largely ignores the traditional view of CG when examining many aspects of franchising. We also find that the franchising literature covers governance topics when discussing governance modes, which provides a basis for developing CG theories. Altogether, our findings open a promising avenue for future research that incorporates CG into studies of franchising.
The realization of channel multiplicity is increasingly present in retail exchanges. Retailers understand that consumers may seek information in one channel and complete their purchases in another channel. Researchers have labeled this retailing concept as “showrooming.” Showrooming suggests that retail salespeople may provide information, services, and suggestions that generate retail sales revenues at another time in another place. While they likely mediate exchange value, retail salespersons’ contributions to building sales revenues and customer relationships may be difficult to measure. The degree of value engendered in the retail sales role set is associated with product and transaction complexity. As such, retail sales functions may range from highly transactional (i.e., facilitating a transaction) to highly relational (i.e., building retail patronage). This article proffers a taxonomy of retail salespeople based on sales role sets: Companions, Consultants, Clerks, and Closers. Managerial recommendations are provided for measuring retail salesperson performance in an omni-channel marketplace.
This article discusses a “perfect storm” that has evolved in recent years related to the composition of the U.S. Latino population—a dramatic demographic shift that threatens the economic stability of supermarkets and other retailers that have traditionally focused their services or products on the foreign-born segment of the Latino population. Using spatial analysis of recent data provided by the American Community Survey and the Consumer Expenditure Survey, the study identified four distinct segments of U.S. counties that provide different levels of market potential related to the concentration of native-born and foreign-born Latinos, their English-language proficiency, and their estimated food-at-home expenditures. Based on these findings, suggestions are made for marketers to re-align their marketing strategies to minimize the potential negative consequences of the developing perfect storm.
Previous studies have found a convex relation between weighted measures of distribution and market share for consumer products in developed economies, while companies in emerging markets often use a non-weighted (numeric) distribution measure to manage their channel strategy. In contrast to the markets with high retail concentration, the numeric distribution could be best suited to a more fragmented retail market in which the percentage of physical distribution is important. We investigate the effects of expanding numeric versus expanding weighted distribution by studying stores in channels and regions characterized by structural differences in an emerging market. Our data come from retail audits in Brazil and include 91 soft drink manufacturers, 195 brands and 1,110 stock-keeping units. Our study highlights the importance of numeric distribution as a performance measure in this market. Additionally, we show that the effects of numeric and weighted distribution on market share vary by region and channel format.
Driven by global advances in technology and changes in consumer buying behavior, brick-and-mortar retailers are being forced to become omni-channel retailers. This calls for new metrics for evaluating retail performance. We examine the challenges facing the retail industry, the metrics that traditional brick-and-mortar stores have used as well as the new metrics that retail industry experts are suggesting for online retailing. A conceptual framework for omni-channel retailers is suggested.
In recent years, major technological advances have been a primary force driving channel evolution. In particular, the Internet of things has provided a means for some firms to experience the rise of one of the most innovative and cutting-edge channels-the platform enterprise (i.e., firms such as Amazon, Etsy, and Airbnb). We examine the platform enterprise through a marketing channel evolution lens. In doing so, we point to key factors that enable particular kinds of firms to forge unique marketing channels. As platform enterprises, these channels offer value that transcends contactual efficiency, because they utilize their resources and capabilities not only to connect buyers and sellers efficiently but also to create a community of stakeholders whose collective efforts are focused on two linked priorities-brand value co-creation and brand value appropriation.
Abstract Personal selling and sales management issues have been the focus of tremendous attention by research scholars, thus expanding our extant knowledge of the field of marketing. However, studies on the development of the discipline of personal selling and sales management from a historical perspective have been sparse. Accordingly, this manuscript makes a unique contribution by partially addressing this gap in the literature by tracing the transition of personal selling through sales management to a prominent role in strategic marketing channel management. From a historical vantage point this article discusses the genesis and evolution of personal selling and sales management, which include the Pioneer Era (1750–1780), Era of Scarcity (1780–1820), Era of Production (1820–1870), Era of Innovation and Growth (1870–1914), Era of Scientific Management (1880–1920), Era of the Roaring Twenties (1920–1929), Era of World Turmoil (1929–1945), Era of Postwar Recovery and Prosperity (1945–1977), Era of Personal Computers, Empowerment of Salespeople, Changing Roles of Sales Managers (1977–2000), and the Era of Customer Relationships and Top-Level Sales Managers As Strategic Channel Managers (2000–Present). With reference to the current era, the article discusses the role salespeople in general and senior- to top-level sales managers in particular play in fostering long-term relationships with a firm’s marketing channel members by moving from transactional selling and relationship selling to the current greater emphasis on forging symbiotic and synergistic strategic partnerships/alliances with reseller intermediaries.
It has been two decades since JMC featured the characteristics of the Japanese distribution system in 1994 as a Special Issue. Since then, Japan has experienced a longterm recession and two earthquake disasters. Nevertheless, the Japanese economy is starting to rebound and is pursuing growth again. A major challenge to the economy is that Japanese society is facing long-term demographic changes, such as aging of the population, overconcentration of the population in metropolitan areas, fewer children, and reduced size of households. These phenomena have changed consumption patterns, resulting in both opportunities and threats for marketers and members of distribution channels. There has been some discourse about the uniqueness of the Japanese market and distribution system since the 1980s. Some of its unique qualities include smaller trade areas, a longer distribution chain, vertical integration of the distribution channels by manufacturers, and a distribution system that tends to exclude foreign capital. In fact, quite a few global retail chains have withdrawn from the Japanese market. However, the structure previously described has changed since the rise of mass merchandisers in the 1990s and more recently with the increase in Internet commerce. On the other hand, convenience store formats to target small trading areas have increased their presence. The rapid demographic changes noted previously have affected consumers’ shopping patterns and the distribution system. Recently, although existing retail chains have been incorporated into several major retail conglomerates following mergers and acquisitions, new investors, such as general trading companies, have entered the retail industry. Moreover, the business system has shown innovation in the areas of service development in convenience stores and the integration of Internet commerce. Consumers in Japan, especially those in urban areas, are currently receiving great benefit from these innovations. This Special Issue is designed to contribute to marketing channel research by focusing on the evolution of the distribution channel in Japan. It is worthwhile for researchers to focus on both the uniqueness and the universality of this evolution process. Revealing the dynamism behind the evolution is expected to contribute to new knowledge in this research field. Theories that explain the evolution and its dynamic forces are required, and various research approaches are welcome. We hope this Special Issue will be a good opportunity to bring about fruitful discussions that develop new knowledge and profound insight into marketing channel research. We seek manuscripts addressing the following topics and beyond. Of course, this list is only for illustration of suitable topics and is not intended to be comprehensive or exclusive. Some examples of research that would be especially welcomed include the following:
