Managing channels of distribution in the age of electronic commerce

Abstract

The emergence of electronic commerce (e-commerce) has created a new business paradigm, one that presents marketers with noteworthy opportunities and challenges. Perhaps the greatest impact is in the area of channel management. The top issue for many business-to-business (B2B) firms today is channel conflict. In this paper, we investigate the effect of introducing the Internet channel into an already complex, multichannel distribution system from the perspective of the supplier firm. We describe strategies for proactively managing conflict, both externally with channel partners and internally among the subunits responsible for managing the channels. Twelve propositions for research are developed; eight relate directly to the marketing mix and four focus on channel communication and coordination. All of the research propositions offered are mechanisms by which suppliers can influence the level of channel conflict they experience. Dedicated channel management groups, documentation of channel strategies, and superordinate goals are identified as strategies for minimizing unwanted conflict.