Implicit understandings in channels of distribution
Article Abstract:
Implicit understandings in channels of distribution, and formal agreements that exert definite control over agreeing channel members, can be partially interchangeable, and implicit understandings may be developed as channel members learn how each other behave. Results indicate: that without implicit understandings channel members gain less profit; that implicit understandings without formal agreements generate less profits among channel members than with them; retail prices oscillate during the learning process involved in implicit understandings; that while learning by both channel members maximizes profits for each member, learning by only one member creates greater profits for only the member that does not learn; and with implicit understandings retail prices are less than without them. Even if learning is complete, coordination is not achieved. Coordination in this case refers to synchronizing elements of the distribution process, shelf space, advertising, and product quality, to gain higher profits.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1985
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The value of marketing expertise
Article Abstract:
A theoretical model for assessing marketing expertise is developed using a decision-theoretic paradigm where firms must select strategies. This model is used to identify the determinants of the value of marketing expertise. These factors are found to be the effects of marketing decisions on the bottom line, the instability of the marketing environment, and the potential loss arising from poor marketing management. The model is tested empirically using data from 592 firms where marketing expertise is emphasized. The findings reveal that the value of marketing expertise increases when there is greater market presence and market instability, but decreases when there is higher organization instability, competition, and larger organizational size.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1996
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Product assortment in a triopoly
Article Abstract:
Research examines the reasons that the producers of superior, high quality products find it more advantageous to offer a narrower selection of products than do the producers of nonpremium products. A Hash equilibrium is created for product assortment and prices for a triopoly of ice cream manufacturers. Results indicate that greater assortment costs, additional product quality, and consumer price sensitivity discourages product assortment, and that greater competitive costs, larger market potential, and increased competition encourages more assortment by producers of superior, high quality brands.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1989
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