Distribution Channel Choice Research Articles

Distribution Channel Choice and Divisional Conflict in Remanufacturing Operations

We consider a firm consisting of two divisions, one responsible for designing and manufacturing new products and the other responsible for remanufacturing operations. The firm will sell these new and remanufactured products either directly to the consumer (direct selling) or through an independent retailer (indirect selling). Our study demonstrates that a firm’s organizational structure can affect its marketing decisions. Specifically, a decentralized firm with separate manufacturing and remanufacturing divisions can benefit from indirect selling with higher firm profit, supply chain profit, and total consumer demand than direct selling. Moreover, this structure also induces a remanufacturable product design. In contrast, a centralized firm in which the manufacturing and remanufacturing divisions are consolidated is intuitively better off by choosing direct selling than indirect selling. Furthermore, we show that, surprisingly, when the focal firm sells through an independent retailer, a decentralized internal structure can result in higher supply chain profit than a centralized internal structure. We further investigate the case of dual dedicated channels and conclude that, while direct selling of remanufactured products and indirect selling of new products can better induce a remanufacturable product design and higher supply chain profit, it is not in the best interest of the firm in terms of total sales and firm profit.

The role of distribution channels in market discipline for the life insurance industry

This paper investigates the role of distribution channels in market discipline for the life insurance industry as marketing intermediaries help transmit information between insurers and consumers. Based on life insurance data in Taiwan during 2004–2013, the paper analyses the relationship between insurance demand and insurers’ enterprise risk considering the effect of the distribution channel. The empirical results suggest that the distribution channel is an influential factor in insurance demand. The results also show that insurance demand and choice of distribution channel in Taiwan are responsive to insurers’ enterprise risk. These findings suggest that insurance commissioners should consider the role of marketing intermediaries when market discipline is adopted as an approach for surveillance of the insurance market.

Optimal decisions and distribution channel choice of closed-loop supply chain when e-retailer offers online marketplace

We study a closed-loop supply chain involving e-retailer’s online marketplace (i.e., platform service) and self-run shop, which are available options for upstream manufacturer to market new and remanufactured products. Considering the platform fee and the order fulfilment cost, we investigate four distribution channel modes, and obtain decision regions and corresponding optimal decisions for supply chain members. Furthermore, based on theoretical and numerical analyses, impacts of the platform fee and the order fulfilment cost on optimal decisions and performance of the supply chain are investigated. Our results indicate that the two parameters show different impacts on supply chain decisions under different channel modes. We also find that the preferred channel mode changes with the two parameters from the perspective of the manufacturer or the e-retailer, the preferred channel mode is only determined by the order fulfilment cost from the perspective of consumers, and selling the new product through the e-retailer and the remanufactured product in the online marketplace is more preferred from the perspective of the environment.

Enterprise product sales market selection model

Efficient sales logistics is the foundation of sustainability of enterprises in the real economy. This is due to the fact that it is the closing link in the logistics system, production of goods and provides a choice of distribution channels and their participants. The choice of distribution channels, first of all, involves the determination of markets for the products manufactured by the enterprise. Due to the need to ensure the effectiveness of this choice of taking into account a large number of various factors, the solution to this problem involves the use of formalized models and techniques. The article proposes a model and methodology that provides a reasonable choice of markets for the products of an enterprise in the real sector of the economy at the initial stage of forming its marketing logistics strategy. The model is based on a formal apparatus of statistical conclusions based on nonparametric statistics. This made it possible to take into account the inherent uncertainty of the source information inherent in the considered selection problem. The proposed model may be useful for digitalization in the field of logistics management of enterprises in the real sector of the economy.

Analyzing channel choice: Direct and indirect e-Tourism distribution

ABSTRACTAn increasing number of tourism service providers are involved in multichannel operations, combining online direct and indirect channels. Service providers and intermediaries need to know what drivers lead consumers to purchase on both channels in order to discover their own potential for differentiation and develop appropriate strategies. This research presents and tests a distribution channel choice model applied to data obtained by a survey aimed at online tourism purchasers. Not surprisingly, the results find that the Internet mitigates the differences between direct and indirect online channels from the demand perspective. Only one variable, information provided, has a positive effect on the choice of the direct channel, while two variables, assortment and basket size, have a positive effect on the choice of the indirect channel.

Explaining regional dynamics of marketing strategies: The experience of the Tuscan wine producers

Abstract In a traditional wine region such as Tuscany (Italy), the wine production is perceived by several industry players as weak and fragmented because it is mainly managed by small and medium-sized wineries that have limited market power compared to large companies and distributors. In this paper, we hypothesise that this problem was influenced - in a period of strong market growth - by producers' choices that underestimated the impact of several external forces (e.g. competition, changes in demand and regulation) and promoted strategies without considering their combination with key context-specific physical, structural and socio-cultural factors. The study investigates the origin of these marketing strategies confronted with the contested fragmentation, exploring both current and future trends of the wine market in Tuscany. The objective is to provide a better understanding on how the combinations between these factors and firm's activities define regional settings in which the different strategies are developed and how these settings can be used to promote more effective and calibrated strategies towards greater economic sustainability of the sector. The focus is to understand the nature and the dynamics of interlinkages between the adoption of quality-based differentiation strategies, the diversification of marketing channels, and their regional and local determinants. We adopt a mixed quantitative and qualitative research approach composed of an analytical framework, an econometric analysis, and interviews with wine producers. First, the method provides a conceptual framework to understand the interlinkages between producers' strategies and local and regional determinants. Then, the winery decision-making process is modelled through a two-by-two differentiation strategy model that represents the wineries' decision towards the adoption of PDO/PGI appellation or organic certification in relation with the choice of distribution channels. Through the reciprocal of the Herfindahl-Hirschman Index (HHI−1) - calculated on alternative marketing strategies – we verified the extent of diversification of sale channels under the different quality choices (i.e. PDO/PGI and organic or without them). Then, the determinants of the choice of distribution channels were quantified by applying a censored regression model and the results were elaborated and discussed in the light of 32 producers' interviews. The main trend highlights the fragmentation of wine production that has been determined by the differentiation model adopted by the regional producers. The results confirm a great divide in strategies between those producing quality wines and those who do not: on the one hand being mainly involved in PDO/PGI or organic certification positively affects the choice of multiple distribution channels; on the other hand, those who are not involved in quality labels have concentrated their production in a restricted number of marketing channels. The analysis shows that different producers' strategies have been influenced by the interaction between structural factors, farm characteristics and terroir in response to external changes. It also reveals a transformation process in progress that involves the concentration of the supply chain. Producers are promoting greater consolidation and reassembling of the production through new producer networks and associations that aim to reduce the fragmentation and related weakness with new common strategies.

Does innovation propensity influence wineries’ distribution channel decisions?

PurposeThe aim of this paper is to analyze the relationships between distribution strategies and the level of innovation propensity in the winemaking industry. It intends to identify the existence of patterns around the way wineries innovate and the way distribution channels are used. These determinants can support or constrain wineries’ behaviors in their strategic choices related to distribution channels.Design/methodology/approachThe sample comprised 191 Italian small- to medium-sized enterprises in the wine industry. First, a two-step cluster analysis was used to identify patterns in the level of innovation propensity and differences in distribution channel strategies. Second, the research question was tested using multinomial logit regression.FindingsFive clusters of innovation propensity were identified, varying from “no propensity to innovate” to “propensity for radical innovation”, and three clusters of distribution channel strategies were found. A significant negative relationship between innovation propensity and distribution channel strategies was revealed. This means that the greater the propensity to innovate, the smaller the need for a wholesale distribution option.Research limitations/implicationsAs with most research, there are limitations to this study. First, the sample is from only one country. A second limitation is the sample size (191 Italian firms). A sample including large firms can be used to further validate the findings. Linked to the sample, another possible limitation is that all respondents were small- and medium-sized enterprises from a single industry.Practical implicationsThis study contributes to the current innovation research by showing the existence of a negative relationship between innovation propensity and the choice of distribution channel in the wine industry. This knowledge is precious to entrepreneurs and managers in the wine sector, allowing them to better consider not only the type of strategies related to distribution channels but also the importance of building the firm’s propensity to innovate into the strategic decision-making process. Furthermore, the paper provides an opportunity for practitioners to reflect upon the fact that changing the distribution channel is more than just changing the outlet for their product; it might also require a revision in their innovation propensity to better facilitate the process.Social implicationsThere are also social implications, in particular providing an advantage for consumers. The major advantage is based on the fact that consumers are now aware that the level of innovation propensity in a wine industry is directly linked to the type of distribution channel adopted. Therefore, wines with low-innovation propensity are most likely found to adopt wholesale distribution strategy, while the more innovative wineries adopt the wine expert and direct distribution channels.Originality/valueFor the first time, a cluster analysis approach was used to review different typologies of Italian wineries based on their propensity toward to innovation and subsequent distribution strategies. This study further explains the direct relationship between innovation propensity and the strategic choice toward between long or short distribution channels.

A relação entre a busca de informação e a escolha do canal de distribuição nas compras dos serviços de viagem de Pernambuco

Os avanços tecnológicos redesenharam a cadeia de distribuição do turismo. O objetivo deste estudo é analisar a relação entre a busca de informação e a escolha do canal de distribuição na compra dos serviços de viagem do visitante de Pernambuco. Como base teórica, foi abordada a Tecnologia da Informação e Comunicação e seus impactos, comportamento de compra e distribuição dos serviços turísticos, segundo autores como Buhalis (2002), Brasil (2008) e Xiang et al. (2015). Em termos metodológicos, caracteriza-se como uma pesquisa exploratória descritiva, com abordagem quantitativa, utilizando o levantamento tipo survey, com amostra não probabilística por conveniência. Foram entrevistadas 168 pessoas, em abril e maio de 2016, visitantes do estado de Pernambuco. O resultado da análise indicou que há pouca relação, direta e condicional, entre a busca e a finalização da compra. Resultado checado, uma vez que a finalização de compra dos visitantes estudados sofreu variações para cada tipo de serviço turístico.

THE LEVEL AND PRICE VOLATILITY OF BLUEBERRY FRUITS (VACCINIUM CORYMBOSUM L.) OBTAINED BY PRODUCER AND ON THE WHOLESALE MARKET DURING 2007-2016

The aim of the study was to assess the level and volatility of prices of blueberry obtained in the farm (in wholesale on the domestic market and in export) and on the wholesale market during 2007-2016, due to choice of distribution channel. The level, direction and intensification of price changes were analyzed. The study shows that the prices of blueberry at the producer level were characterized by greater volatility than the wholesale market. Prices obtained by the producers on wholesale on the domestic market were significantly lower than in exports and in the wholesale market, on average in the analyzed period accounted for only 69% of the export price and 52% of the wholesale market price. Regardless of where the price comes from,the highest price for fruits was obtained in September, and the lowest in August, which is the month of the largest supply of fruits on the market.

Incentive Contracting with an Independent Underwriter: Does It Benefit Insurers?

Abstract In this article, we propose a model consisting of an insurance distribution channel compensation scheme, paying special attention to the insurer’s choice of distribution system in both single-period and multi-period settings. We find that the risk factor is the key element in both the insurer’s choice of distribution channel and the distribution channel compensation scheme. The advantage of having an independent underwriter is mainly manifested in lines of business that are more risky. Our analysis suggests that a profit-sharing contingent-commission scheme serves as a risk-sharing mechanism and is especially effective with risky business lines.

A case study on downstream supply chain of an Indian alcoholic beverage manufacturer

Purpose – This study aims to understand the structure of downstream network from a supply chain (SC) perspective using a case of an Indian alcoholic beverage manufacturing company. In the SC literature, many researchers and practitioners have studied the design of upstream supplier network. Very few studies have documented the design of downstream network comprising distributors, warehouses, retailers, etc. and current study attempts to contribute to this limited literature. In addition, this study also tries to understand the influence of downstream SC, if any, on top management strategies. Finally, it assesses the SC quality using the standard set of factors and provides insights for its improvement. Design/methodology/approach – Single case study approach has been utilized to understand the configuration of downstream SC. A distillery in southern part of India which distributes a variety of liquor products across the market has been chosen for this study. Different data collection approaches have been adopted to understand the distribution channels prevailing in the market. In addition to the internal documents, semi-structured interviews were conducted with salesmen employed by the distillery for different group of outlets, top management of the distillery, outlet owners and counter sales person. Findings – Different distribution channels constituting the downstream SC network of the industry in the market studied have been identified to be retails and bars, institutions, clubs, modern trade, maximum retail price and Mysore Sales International Limited. Each of the distribution channels has clearly defined their boundaries for reaching different segment of consumers. Significant influence of the existing distribution channels on strategic decisions such as new product development and pricing were noticed. Interesting inferences were obtained on the relationships existing between the distilleries and different distribution channels. Insights were also gathered on the regulatory role played by the government between the manufacturers and distributors. Few marketing and promotional strategies adopted by companies to strengthen their downstream relationships with distribution channels and, in turn, with consumers have also been discussed. The quality of alcoholic beverage SC has been assessed and was found to perform on par with the set standards of quality in robustness factors and enabling factors. Training factor needs to be further improved by providing salesmen with exposure to best practices. Effort also needs to be taken to improve in the complicating factors, i.e. the testability and time. Research limitations/implications – This study is limited to the experience of a single alcoholic beverage manufacturer in the Karnataka state in India. SC of alcoholic beverage industry in India varies across states and depends on State Government regulations. Hence, the obtained results and inferences cannot be generalized across the industries and geographies. Future studies can be carried out in different locations across the country to understand the structure and dynamics of downstream SC in this industry. Scope also exists to study how the deficiencies identified in the SC can be improved and how alcoholic beverage firms entering India adapt to the prevailing SC structure. Comparative study of downstream SC of different industries can also be conducted. Practical implications – Academicians and practitioners can consider this paper as a source to understand the configuration of downstream SC of alcoholic beverage industry. More than that, this study provides a counter-intuitive inference for researchers and practitioners that choice of distribution channels have influence on the strategic decisions such as pricing and product development. Therefore, it becomes necessary to factor in the target distribution channel at the product design phase itself. This study may also help in performing a comparative study of downstream SC – especially the distribution network of different industries and identify best practices that can be adopted across the industries. Application of the standard set of factors from the food SC quality assessment literature have been demonstrated in this study to assess the downstream SC of the alcoholic beverage industry studied. In addition, this study provides several insights by detailing the structure of the SC for other alcoholic beverage manufacturers who are planning to enter Indian market. Originality/value – According to author’s knowledge, it is believed that this is the first study to report the configuration of downstream SC of the alcoholic beverage industry specifically from India apart from describing their influence on strategic decisions of the company.

Postrzeganie ryzyka jako czynnik warunkujący zachowanie konsumenta w kanale dystrybucji

Multichanneling is one of the strategies products and services distribution in the network economy. Multi-channel consumer spends more in comparison to consumer using only one distribution channel. The risk is associated with the buying decisions of consumers, including the place / way of purchase. The category perceived risk is composed of a number of variables. The aim of the publication is to identify sources of consumers perceived risk in conditions of distribution channel choice. The decision of the channel selection is determinant by performence risk, time risk, security risk and financial risk. Suppliers, however, through specific actions may restrict the perceived risk.

How New Consumers’ Consumption Patterns Caused Changes in Food Distribution Channels in Croatia

In general, channels of meat distribution in Croatia include (a) direct sale in open market area; (b) local stand-alone butcher shops that co-operate with some farms offering their meat there; (c) chains of butcher shops; (d) supermarkets and hypermarkets; (e) the channel of Horeca (hotels, restaurants, snack bars). The whole Croatian meat market has 300,000 tons estimated value, but it has met with changing trends in consumption because consumers have less time for home-prepared meals. Moreover, consumers prefer one-stop shopping and large-scale retailers due to their variety of merchandise offered. The main goal of the article is to find whether new consumption patterns affect the way of butchering and the choice of distribution channels in the case of the Croatian meat market. Therefore, the qualitative research among consumers and meat distributors in three Croatian regions was conducted. The research reveals consumers’ meat outlet preferences.

Риски персонала рекламного проекта

Risks for advertising project personnel are considered based on the case of «Raiffeisenbank» advertising campaign. Virtually all risks, intrinsic to advertising projects, are generated more or less through the personnel risks. Major advertising project risks are described and analyzed, including those of disloyalty, lack of competency, lack of motivation, underfunding, incorrect market segmentation and incorrect choice of distribution channel. Advertising project management are risk-bearing to a substantial degree, and the majority of the said risks are produced and/or manifest themselves not without project personnel. Such feature is conditioned by peculiarities of advertising projects, analyzed by the author in terms of HRM techniques applicable at the stage of project activities organization. Specific emphasize is made on personnel risks in the course of advertising projects implementation and on ways to evaluate and reduce thereof.

Determinants of distribution channel choice for online software licence purchases: A transaction cost perspective

The objective of this paper is to test empirically a research model proposed in a previous paper, entitled ‘Determinants of distribution channel choice for online software licence purchases: A theoretical model’, which was published in the Journal of Digital Asset Management in 2008 (Vol. 4, No. 6). By casting the software distribution channel choice as a transaction cost analysis (TCA) problem, the research model that the authors proposed in that first paper aimed to uncover the reasons why, when purchasing a software licence for a product that is marketed using a ‘try-before-you-buy’ strategy, consumers would select the physical distribution channel not tied to any digital rights management (DRM) technologies (ie, CD-ROM) rather than the digital distribution channel that uses DRM technologies (ie, electronic software distribution through demo-unlock). With data collected from 224 customers of a software product, this follow-up paper shows that customers consider two transactions in the software ownership life cycle: the initial licence acquisition transaction and the licence management transaction related to software re-installations. The results also show that both transaction costs and TCA dimensions influence customers’ choice of software distribution channel.

FEATURES OF THE FORMATION OF CHANNELS IN THE LOGISTICS AND DISTRIBUTION SYSTEM

The processes of globalization in the global economy are increasing their presence in all spheres of the social production, including the sphere of circulation. Practice shows that the organization of the distribution system is characterized by the presence of many participants in supply chains, a variety of conditions and forms of goods movement. In turn, this requires the integration and consolidation of the participants in the supply chain based on the concept of logistics. Characteristic of the formation of logistics channels is connected, first of all, with the difference in the essence of the context of:channels of distribution and logistics channel. The fundamental difference is that the logistics channel includes all participants in the process of goods movement, from the extraction of raw materials to distribution of finished products , while the distribution channel , applies only to the final stage of the process of product distribution. Now replace the traditional channels of distribution are coming modern sale channels, using different forms of remote commerce and vertical marketing systems . When designing the system of distribution of goods in the first place put forward a decision on the structure of the system, ie the number of channels and their level is further defined the specific composition of the channels. At the design stage of the distribution system it is rather about the choice of distribution channels . In turn, the logistics channel directly affects the speed , time, traffic efficiency of movement and safety of the material flow as well as its information and financial support. In designing the distribution system than indirect distribution channels should be used straight channels with the use of various forms of remote commerce. DOI: http://dx.doi.org/10.12731/2227-930X-2013-1-1

Marketing Strategies for the Primary Sector: An Empirical Study

1. Introduction Marketing channels are very important in the farming sector since it comprises a large number of small agricultural holdings, most of the agricultural products are undifferentiated, and the farming enterprises are isolated for the final consumer (Ritson 1997). Distribution channel choice is one in which an organization can achieve its marketing objectives within the framework of its marketing strategy (Fifield 1992; Kotler 1994). A marketing strategy that an organization follows aims to identify a competitive and consumer advantage and therefore can be viewed as an integral part of the business strategy (Wind and Robertson 1983). Porter (1980) identified three internally consistent generic strategies for creating a defendable position in the long run for competitors in an industry. The three generic strategies that a firm may adopt are: (a) overall cost leadership, (b) differentiation and (c) focus. Following on from this, four broad strategies based on the above generic strategies were suggested by Fearne and Bates (2000): (i) cost leadership strategy, (ii) differentiation strategy, (iii) diversification strategy and (iv) specialization strategy. Kohls and Uhl (1990) argued that in the food industry most firms mainly adopt the following two strategies: product differentiation and market segmentation. It can be difficult to use the typologies of business strategies presented above to describe adequately the way agricultural businesses behave, due to the nature of farm firms (especially their small scale and dependence on family labour and management) and the environment in which they operate. Generally, little is known about the decision making process of farmers regarding marketing strategy selection and particularly about the factors and the farmers' characteristics that influence them to choose a particular strategic alternative. Some studies have sought to cluster farmers according to their strategic behaviour.. McLeay et al. (1996) identified five strategic groups of crop farmers in New Zealand, while Ohlmer, et al. (1998) clustered Swedish farmers in relation to their decision making. Carter (2001) examined the role of farms in the creation of new business in rural areas. Three groups of farmers were identified by Carter (2001) based on their relative engagement in additional business ownership activities: monoactive farmers, structural diversifiers and portfolio business owners. Distinctive group differences found in their personal, farm business, managerial characteristics and in their perceptions of business opportunities and constrains. Vesala et. al. (2007) explored the concept of entrepreneurial capability of farmers to diversify. Their main focus was on the entrepreneurial identity of portfolio farmers in Finland and the extent to which the differences between portfolio farmers, other farmers and non farm rural businesses can be explained. They found that portfolio farmers have stronger entrepreneurial identity than conventional farmers as well as they have the perception that they are growth oriented, risk takers, innovative, optimistic and having more personal control upon their business activities. Other studies have attempted to identify the factors that influence farmers to adopt a particular marketing strategy. For example, distribution risk is one factor that influences marketing decision making in the agribusiness sector. Risks that agricultural producers face are linked with decisions about the prices, quantity, quality, and the timing of delivery (Royer, 1995). Transaction cost was identified as another factor, which has significant impact on marketing decision-making (Hobbs, 1996). Age, education and farm profit are also, according to Hobbs (1997), some factors that affect farmers using live auction markets: the type of cattle, quick payment and the price received were the most important reasons for selling cattle live-weight. Mishra et. al. (2009) investigated the factors such as farm, operator and household characteristics, farm type and regional location of the farm, that affect the financial performance of new and beginning farmers. …

E-Tourisme : comportements d'achat et canaux de vente

L’analyse des comportements d’achat des consommateurs dans le domaine du tourisme et encore plus du e-tourisme est un sujet relativement peu explore dans la litterature par rapports a ses enjeux et au poids economique de ce secteur d’activite pour de nombreux pays. Dans cet article, nous analyserons tout d’abord l’impact d’Internet dans les phases de l’acte d’achat de produits touristiques et notamment l’importance des recommandations mais egalement les freins limitant son developpement dont certains sont communs a l’ensemble du e-commerce. Puis nous essayerons de comprendre les raisons des consommateurs dans le choix du canal de distribution ainsi que la montee en puissance des ventes en ligne. Nous porterons une attention particuliere sur la variable prix, laquelle est devenue une variable preponderante dans le secteur du tourisme, d’autant plus qu’Internet permet une meilleure comparaison des offres.

Distribution Channel Choice of New Entrepreneurial Ventures

This study provides a comprehensive analysis of distribution channel choices of new entrepreneurial ventures (NEVs). First, factors that influence NEVs’ choice of distribution channels are examined. Second, performance consequences of those choices are investigated. A research model drawing from transaction cost economics as well as customer relationship and strategy literature is developed. Data collected from 330 NEVs are used to test the proposed model. The results show that the identified antecedents explain a large part of the variance in NEVs’ channel choice. Moreover, NEVs that accomplish a fit between their distribution channel system and transaction cost–, product–, strategy–, and competition–related variables tend to perform better. Findings are discussed in light of the specific characteristics of NEVs.

Assessing the consumer's choice of purchase channel in the tourism sector

PurposeThe purpose of this paper is to analyse the most important economic factors that determine choice of distribution channel when booking a tourism service. The theoretical framework applied to meet this objective is agency theory, as it provides insight into the effects arising from problems such as information asymmetries and opportunism.Design/methodology/approachThe analysis of a sample composed of 805 tourists who made their reservation through either the internet or traditional channels has provided interesting conclusions, allowing different hypotheses to be contrasted using a structural equation analysis.FindingsThis study has shown how the main source of uncertainty in the stages leading up to the choice of purchase channel is due to a lack of trust towards the internet. In this regard, the signals emitted by firms in order to mitigate information asymmetries contribute to generating trust towards the selected firm; however, they neither reduce the risk differential existing between channels nor the associated transaction costs. In addition, trust in the chosen firm shows that the buyer makes the reservation through the channel with the least perceived risk.Research limitations/implicationsThe research has underlined that the greater the differential in transaction costs between the internet and the traditional channels, the greater the propensity of buyers to make their purchases through alternative distribution channels. In addition, clients perceive greater internet transaction costs with respect to the traditional channels, a fact that may be contrasted with the purpose behind its creation.Practical implicationsThe differences between the information provided by economic agents and the information that is requested by the client reveal a need for greater awareness among those offering the services, in order for them to improve the way in which they target the consumer, especially in relation to the management of information flows. Furthermore, steps should be taken to improve internet security systems and undertake joint actions that are formalised and coordinated by all of the agents involved so that clients perceive internet as a secure channel. Finally, internet‐related skills should be developed to allow the consumer to search for information in a more efficient way.Originality/valueThe study deals with a recent line of new research. It is also performed in the context of Mediterranean countries, which represents a further important contribution, given that very few empirical studies focus on this geographical region.