Industrial Distribution Channels Research Articles

Exclusive territories and performance dimensions in industrial distribution channels

There are two main approaches to studying vertical restraints in distribution channels: the anti-competitive and the efficiency approach. This article sets out to analyze the effects of exclusive territories agreements on performance levels in the distribution channel by proposing a number of hypotheses based upon these two approaches and by testing them with paired data from a sample of 116 manufacturer–dealer relationships from the Spanish industrial market. Results show that manufacturers and dealers perceive higher role performance levels in their partners in relationships characterized by exclusive territories. In a similar way, both manufacturers and dealers obtain higher levels of business performance in exclusive territories relationships, but we found no support for a direct effect of this vertical restraint on business performance. Instead, this effect is completely mediated by the higher levels of role performance associated with the exclusive territories agreement. Thus, empirical findings suggest that the economic outcomes achieved in ET relationships are due not to the presence of monopoly rents, but rather to the better role performance of the participants.

The interplay of task allocation patterns and governance mechanisms in industrial distribution channels

Task allocation involves the placement and performance of distribution subtasks among participants on an on-going basis in the channel. The authors offer an extended conceptualization of task allocation and examine its interplay in varying environmental conditions with shared decision making, pseudo-vertical integration, and dependence. They test the hypothesized relationships with three-stage least squares regression on a sample of farm equipment dealers. Results show that contractually based pseudo-vertical integration facilitates task allocation and, in turn, enlarged dealer task allocation patterns result in pseudo-vertical integration. Firm size has a significant influence on pseudo-vertical integration. In turbulent environments, dealers rely more heavily on shared decision making to allocate tasks than they do in stable environments. Although dependence increases pseudo-vertical integration, its effects on other factors are minimal. The results suggest that task allocation is an important construct that relates to several commonly observed channel characteristics.

Output sector munificence and supplier control in industrial channels of distribution: a contingency approach

Despite the previous finding that a scarce output sector condition increases the extent of supplier control over distributor operations, the exact nature of that effect remains vague. Relying on recent recognition that the governance of exchange relationships is driven by the interaction between environmental uncertainty (including munificence of the output sector) and interfirm dyadic conditions rather than by environmental uncertainty per se, the author maintains that the effect of output sector munificence on supplier control is contingent on two moderators: interdependence between channel members as a proxy of the interfirm structural condition and distributor satisfaction as a proxy of the interfirm attitudinal condition. The results of a national survey of industrial distributors support distinctive moderating effects of bilateral interdependence and distributor satisfaction.

On the effects of customer conditions on distributor commitment and supplier commitment in industrial channels of distribution

Commitment in channel relationships has received increasing research attention lately. Although a number of driving forces of commitment have been identified, all of them are dyad-specific factors, and the potential influence of the environmental conditions on commitment has been ignored. The author broadens the scope beyond the distributor–supplier dyad and suggests that the commitment of channel members is affected by not only the dyadic factors, but also by the changes in customer conditions. The results of a national survey of industrial distributors and suppliers indicate that the impact of customer conditions on supplier commitment is different from their impact on distributor commitment.

Strategic Integration in Industrial Distribution Channels: Managing the Interfirm Relationship as a Strategic Asset

This study investigates the strategic role of interfirm relationships through the concept of strategic integration. Following the conceptual development of strategic integration, the author reports a study of its antecedents and performance outcomes. Uncertainty was expected to have contextual effects in the development and outcomes of strategic integration in industrial distribution channels. A survey of industrial equipment distributors revealed that dependence, flexibility, continuity expectations, and relationship age encouraged the distributor's strategic integration of its supplier relationship. In addition, strategic integration enhanced distributor financial performance. However, uncertainty did not play a role in the distributors' strategic integration of their supplier relationships nor its effect on performance.

On distributor commitment in industrial channels of distribution: A multicomponent approach

Despite a recent surge of interest in commitment, its conceptual scope and components in channel relationships remain equivocal. The authors suggest continuance, behavior, and affect as three essential components of distributor commitment and hypothesize that each component of commitment has a different set of driving forces. A proposed model was tested with data collected in a national survey of industrial distributors. Estimation results indicate that (a) three suggested components are interrelated, yet distinctive, elements of distributor commitment, and (b) each component of distributor commitment is driven by a different set of driving forces. © 1997 John Wiley & Sons, Inc.

Measurement of distributor commitment in industrial channels of distribution

From previous research reported in the organizational behavior and marketing channels literatures, three components of distributor commitment are identified, defined, and measured (continuance, behavioral, and affective commitment). The reliability and construct validity of the proposed measures with data collected in a national survey of industrial distributors are evaluated. Empirical results indicate that three different types of measurement scales—facet, composite, and global—have acceptable levels of reliability, convergent validity, and discriminant validity. Each facet scale of distributor commitment has a distinctive nomological link with other channel constructs.

Classification of industrial services: A model with strategic implications

Increased competition has created a marketplace that has become hypercompetitive. The industrial sector of the economy has not been immune to the escalation in domestic and international competitors. The need to effectively service industrial customers has become a necessary element in the market mix of producers as well as members of industrial channels of distribution. This article addresses the classification of industrial goods/services to aid industrial marketers' marketing efforts.

Patterns of Credible Commitments: Territory and Brand Selectivity in Industrial Distribution Channels

Patterns of Credible Commitments: Territory and Brand Selectivity in Industrial Distribution Channels

Patterns of Credible Commitments: Territory and Brand Selectivity in Industrial Distribution Channels

The authors propose a new theoretical rationale that explains the paired existence of both a manufacturer's decision to limit the number of intermediaries operating in a specific geographic market and a distributor's decision to limit brand assortment in a product category. Using transaction cost reasoning, they suggest that channel selectivity agreements can be understood as interrelated exchanges of pledges, or credible commitments, that counterbalance exposure to opportunism and neutralize sources of relationship instability, thereby strengthening an interorganizational relationship. The empirical results, which are based on dyadic data from 362 manufacturer–distributor relationships, are broadly supportive of their framework.

The Credit Trap Constraint on Sales through Industrial Distribution Channels

The Credit Trap Constraint on Sales through Industrial Distribution Channels

Power, bureaucracy, influence, and performance: Their relationships in industrial distribution channels

Set in an industrial product distribution channel, the authors investigate the relationship between: (1) a supplier's power and its use of influence tactics with a distributor, (2) the level of bureaucracy (operationalized as centralization and formalization) with use of influence, (3) influence use and relationship performance, and (4) bureaucracy and performance. A series of structural equation models revealed that high-power suppliers tend to use “nonmediated” approaches (information exchange and recommendations) and rely less on “mediated” tactics such as threats and “legalistic pleas.” Centralized supplier decision-making promoted the use of mediated tactics, whereas formalized relationships fostered the use of information exchange and recommendations (as well as legalistic pleas). Finally, information exchange had a positive effect on the performance of the exchange relationship, whereas requests, legalistic pleas, and threats had deleterious effects on this outcome variable. No direct bureaucratic effects on relationship performance were found when taking influence tactics into account.

Performing Export Tasks in Industrial Channels of Distribution

This article examines industrial channel management in an international context by analysing whether the industrial firm performs export functions itself or whether it transfers these functions to an export middleman. Export theory suggests that certain firm and market characteristics determine whether these tasks will be self‐performed or spun off to a channel intermediary. Hypotheses based on theory are tested on a sample of 225 Dutch exporters. Export sales volume was found to be associated with the performance of tasks required to stimulate, but not supply, foreign demand. However, industrial exporters tend to self‐perform tasks when middlemen are located in distant foreign markets. The findings suggest that an industrial firm′s desire to control export task performance offsets economic incentives to transfer certain channel functions to export intermediaries.

Vertical Restraints as Contract Enforcement Mechanisms

IT is now generally recognized that there are many cases of vertical restraints that do not fit the standard "consumer free riding on special services" theory.1 For example, the widespread use of resale price maintenance in the marketing of brand name clothing cannot be explained as inducing retailers to supply services such as dressing rooms. It is unlikely that consumers must be prevented from trying on clothing free of charge at a full-service retailer before purchasing the clothing at a discount from retailers who do not supply dressing rooms. A number of authors recently have attempted to correct this deficiency in the standard theory by expanding the type of services that vertical restraints may induce retailers to supply and the corresponding retailer free-riding problems.2 The standard economic analysis of how vertical restraints operate to induce desired retailer behavior has remained essentially unchanged, however. The standard analysis assumes that when it is not feasible for a manufacturer to write explicit, court-enforceable contracts with retailers for the supply of particular services, the only alternative mechanism manufacturers can use to induce the supply of desired services is to increase the direct return retailers receive from consumers when those

Improving postpurchase satisfaction in industrial distribution channels

Factors significant to postpurchase satisfaction among buyers of industrial installations are identified in this article. From data provided by 95 industrial equipment buyers, seven factors are investigated for their potential impact on postpurchase satisfaction. One factor, perceived ability of the equipment to attract new customers to the buying organization, was found to dominate postpurchase feelings of equipment buyers. Quality of repair service had a minor effect on postpurchase satisfaction. Manufacturer training programs relating to equipment use and application were also relevant, but only if ability to attract new customers was absent. No other factor made a significant impact on buyer satisfaction.

Control vs. resources in channel design: Distribution differences in one industry

This article focuses on a case history in order to develop and illustrate a conceptual framework concerning the interplay between control and resources in manufacturers' channel design policies. It suggests that channel design can usefully be viewed as the outcome of a process designed to balance two often mutually incompatible goals of managers: their desire to control directly important channel functions while also leveraging limited resources, especially financial and selling resources. The article also suggests some implications of this perspective for both theorists and practitioners interested in the design and evolution of industrial distribution channels.

The Services and Supplier Choice Influences of Industrial Distributors

This article introduces the industrial distributor into the service industries literature. A comprehensive description of these middlemen is provided and the results of a 1986 survey are analysed. The findings relate to some characteristics of industrial distributors and to many of the services they perform. It is established that these firms are very service-intensive. The complexity of industrial distribution channels is examined and there is an analysis of the factors that influence how these middlemen select the producers whose products they carry.