Jeuland, Abel P.; Shugan, Steven M.
June 1983
Marketing Science;Summer83, Vol. 2 Issue 3, p239
Academic Journal
A channel of distribution consists of different channel members each having his own decision variables. However, each channel member's decisions do affect the other channel members' profits and, as a consequence, actions. A lack of coordination of these decisions can lead to undesirable consequences. For example, in the simple manufacturer-retailer-consumer channel, uncoordinated and independent channel members' decisions over margins result in a higher price paid by the consumer than if those decisions were coordinated, in addition, the ensuing suboptimal volume leads to lower profits for both the manufacturer and the retailer. This paper explores the problems inherent in channel coordination. We address the following questions. --What is the effect of channel coordination? --What causes a lack of coordination in the channel? --How difficult is it to achieve channel coordination? --What mechanisms exist which can achieve channel coordination? --What are the strengths and weaknesses of these mechanism? --What is the role of nonprice variables (e.g., manufacturer advertising, retailer shelf-space) in coordination? --Does the lack of coordination affect normative implications from in-store experimentation? --Can quantity discounts be a coordination mechanism? --Are some marketing practices actually disguised quantity discounts? We review the literature and present a simple formulation illustrating the roots of the coordination problem. We then derive the form of the quantity discount schedule that results in optimum channel profits.


Related Articles

  • Strategic Assortment Reduction by a Dominant Retailer. Dukes, Anthony J.; Geylani, Tansev; Srinivasan, Kannan // Marketing Science;Mar/Apr2009, Vol. 28 Issue 2, p309 

    In certain product categories, large discount retailers are known to offer shallower assortments than traditional retailers. In this paper, we investigate the competitive incentives for such assortment decisions and the implications for manufacturers' distribution strategies. Our results show...

  • Retailing Abstracts. Dickinson, Roger A.; Curhan, Ronald C.; Jolson, Marvin A.; Etgar, Michael; Rosenberg, Larry J. // Journal of Retailing;Spring78, Vol. 54 Issue 1, p92 

    The article presents abstracts on different issues related to retail trade, published in previous issues of the "Journal of Retailing." For the article concerning differential strategies in interchannel competition, the abstract briefs up on the comparisons in the level of services provided by...

  • Dynamic Cooperative Advertising in a Channel. J�rgensen, Steffen; Sigu�, Simon Pierre; Zaccour, Georges // Journal of Retailing;Spring2000, Vol. 76 Issue 1, p71 

    The paper studies a two-member channel in which a manufacturer and an exclusive retailer can make advertising expenditures that have both short and long term impacts on the retailer's sales. The manufacturer can also support both retailer's advertising efforts through a cooperative advertising...

  • Breaking the Ice. Debelak, Don // Entrepreneur;Feb2005, Vol. 33 Issue 2, p120 

    Presents steps on how to overcome skepticism from retailers and consumers when several other products have failed. Understanding the problem; Designing a complete solution; Making the difference stand out; Producing a high-quality product; Ensuring the product stands out in the distribution channel.

  • Marketing in Italy Today. Carson, David // Journal of Marketing;Jan1966, Vol. 30 Issue 1, p10 

    Italy embodies all stages of economic development in its marketing structure and operations, ranging from regional differences hoary with age ... to regulations of distribution based upon the guild system of the Middle Ages ... to huge, quasi - independent, state - owned enterprises unusual for...

  • CPG Companies Can Be Multichannel.  // SupplyChainBrain;Jan/Feb2015, Vol. 19 Issue 1, p20 

    The article explains consumer packaged goods (CPG) companies and their potential to be multichannel in their retail operations. Topics covered include CPG companies are being known for using their internet capabilities to boost customer experience and pursue product and company visibility, the...

  • Dell to Standardize Reseller Channel Program Globally.  // Channel Insider;6/15/2009, p1 

    The article reports on the plan of Dell Computer Corp. to standardize its PartnerDirect reseller channel partner program worldwide. It notes that the company's move is in line to leverage its benefits on a global basis. Furthermore, it mentions that they are also planning the certification...

  • UNCERTAINTY AND RESOURCE DEPENDENCY IN MARKETING CHANNEL RELATIONSHIPS. Kennedy, Ellen J. // AMA Winter Educators' Conference Proceedings;1988, p265 

    Examines the uncertainty and resource dependency of marketing channel in interorganizational relationships. Perspective on the interaction of complex phenomena of resource dependency; Review of the two phenomena; Implication of resource dependency management and uncertainty in distribution...

  • Re-engineering the Distribution Channel. Underhill, Tim // Gases & Welding Distributor;Jul/Aug2001, Vol. 45 Issue 4, p39 

    Focuses on the management of distribution channels in industries. Importance of price of the product for distribution; Measurement of impact on customer's profit by distributors; Control of costs in the supply chain; Integration of supply chain initiatives between manufacturers and distributors.


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics