Competition and Cooperation in Marketing Channel Choice: Theory and Application
AbstractThis paper discusses the problem of choosing a vertical marketing channel in a product-differentiated duopolistic market. Firms choose product price and the form of the marketing channel to maximize profits. It is shown that integration of the marketing function results in greater price competition and lower prices than does the use of independent marketing middlemen. The profitability of reducing price competition by using such middlemen is investigated. Two hypotheses—that integration is negatively associated with the products' substitutability and that symmetric channel structures are stable—are tested in a preliminary way and supported with survey data from the international semiconductor industry.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by INFORMS in its journal Marketing Science.
Volume (Year): 4 (1985)
Issue (Month): 2 ()
distribution channels; vertical integration; game theory. semiconductor industry;
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Kong-Wing, Clement Chow, 1997. "Pre-commitment vs. flexibility: Uncertainty and distribution reform in P.R. China," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 26(1), pages 59-78.
- Mesak, H. I. & Mayyasi, A. M., 1995. "A simple model of international joint venture distributorships: the American-Kuwaiti experience," Omega, Elsevier, vol. 23(5), pages 525-538, October.
- Yusong Wang & David Bell & V. Padmanabhan, 2009. "Manufacturer-owned retail stores," Marketing Letters, Springer, vol. 20(2), pages 107-124, June.
- Paloma Almodóvar & José Emilio Navas López & Patricia Huerta Riveros, 2009. "La tipología estratégica como factor determinante de la empresa conjunta internacional," Investigaciones Economicas, Fundación SEPI, vol. 33(3), pages 407-438, September.
- Chih-Jen Wang & Ying-Ju Chen & Chi-Cheng Wu, 2011. "Advertising competition and industry channel structure," Marketing Letters, Springer, vol. 22(1), pages 79-99, March.
- Zhao, Xuan & Shi, Chunming, 2011. "Structuring and contracting in competing supply chains," International Journal of Production Economics, Elsevier, vol. 134(2), pages 434-446, December.
- Anne Coughlan & S. Choi & Wujin Chu & Charles Ingene & Sridhar Moorthy & V. Padmanabhan & Jagmohan Raju & David Soberman & Richard Staelin & Z. Zhang, 2010. "Marketing modeling reality and the realities of marketing modeling," Marketing Letters, Springer, vol. 21(3), pages 317-333, September.
- McNaughton, Rod B., 1996. "Foreign market channel integration decisions of Canadian computer software firms," International Business Review, Elsevier, vol. 5(1), pages 23-52, February.
- Desai, Vijay S., 1996. "Interactions between members of a marketing-production channel under seasonal demand," European Journal of Operational Research, Elsevier, vol. 90(1), pages 115-141, April.
- Li, Bai-Xun & Zhou, Yong-Wu & Li, Ji-zi & Zhou, Shi-ping, 2013. "Contract choice game of supply chain competition at both manufacturer and retailer levels," International Journal of Production Economics, Elsevier, vol. 143(1), pages 188-197.
- Noriaki Matsushima & Akira Miyaoka, 2013. "Who benefits from resale-below-cost laws?," ISER Discussion Paper 0875, Institute of Social and Economic Research, Osaka University.
- Olmos, Marta Fernandez & Rosell-Martinez, Jorge & Espitia-Escuer, Manuel Antonio, 2008. "The yield/quality trade-off and contractual choice," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6065, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Angels Pelegrín & José García-Quevedo, 2012. "Which firms are involved in foreign vertical integration?," Working Papers 2012/38, Institut d'Economia de Barcelona (IEB).
- Canan Savaskan, 2001. "Channel Choice and Coordination in a Remanufacturing Environment," Discussion Papers 1328, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Wierenga, B. & Soethoudt, H., 2002. "Suboptimality of Sales Promotions and Improvement Through Channel Coordination," ERIM Report Series Research in Management ERS-2002-10MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
- Oystein Foros & Hans Jarle Kind & Greg Shaffer, 2013. "Turning the Page on Business Formats for Digital Platforms: Does Apple's Agency Model Soften Competition?," CESifo Working Paper Series 4362, CESifo Group Munich.
- Michael Raith, 2003. "Competition, Risk, and Managerial Incentives," American Economic Review, American Economic Association, vol. 93(4), pages 1425-1436, September.
- Fernández Olmos, Marta, 2010. "The performance implications of "grow or buy" decisions in the wine industry," Food Policy, Elsevier, vol. 35(3), pages 256-264, June.
- Olmos, Marta Fernandez & Rosell-Martinez, Jorge & Espitia-Escuer, Manuel Antonio, 2008. "On the co-existence of spot and contract markets: an analysis of quality," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6082, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Xuan Zhao & Derek Atkins & Yong Liu, 2009. "Effects of distribution channel structure in markets with vertically differentiated products," Quantitative Marketing and Economics, Springer, vol. 7(4), pages 377-397, December.
- Karray, Salma, 2011. "Effectiveness of retail joint promotions under different channel structures," European Journal of Operational Research, Elsevier, vol. 210(3), pages 745-751, May.
- Canan Savaskan & Luk N. van Wassenhove, 2001. "The Strategic Decentralization of Reverse Channels and Prince Discrimination Through Buyback Payments," Discussion Papers 1329, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Marta Fernández-Olmos & Jorge Rosell-Mart�nez & Manuel A. Espitia-Escuer, 2009. "Vertical integration in the wine industry: a transaction costs analysis on the Rioja DOCa," Agribusiness, John Wiley & Sons, Ltd., vol. 25(2), pages 231-250.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc).
If references are entirely missing, you can add them using this form.