Determinants of Margins in the Distribution Channel: An Empirical Investigation

This file is part of IDEAS, which uses RePEc data

Determinants of Margins in the Distribution Channel: An Empirical Investigation

Author Info

Draganska, Michaela (Stanford U)
Klapper, Daniel (Johann Wolfgang Goethe-Universitat)
Villas-Boas, Sofia B. (U of California, Berkeley)

Additional information is available for the following registered author(s):

Abstract

In this paper we describe how margins in the channel vary over time within a product category and identify the market, manufacturer, and retailer characteristics that explain this variation. To obtain the equilibrium margins, we explicitly model the behavior of the various agents in the marketplace. Because the behavior of the agents changes in response to changes in the economic environment, we observe shifts in the total channel margins and the way they are split between the channel members. We explain this variation by examining the impact of directly measurable factors on total margins in the distribution channel and the share of these margins that manufacturers and retailers obtain. We illustrate the proposed approach using data for the ground coffee category in Germany. Our empirical analysis demonstrates that while the market-level factors affect total margins in the channel, size and other characteristics of manufacturers and retailers have a larger impact on the way margins are split. Our findings have immediate implications for the product portfolios offered by manufacturers, the positioning of store brands, and the retail service level.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. 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.

Publisher Info
Paper provided by Stanford University, Graduate School of Business in its series Research Papers with number 1959.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: Feb 2007
Date of revision:
Handle: RePEc:ecl:stabus:1959

Contact details of provider:
Postal: Stanford University, Stanford, CA 94305-5015
Phone: (650) 723-2146
Fax: (650)725-6750
Email:
Web page: http://gsbapps.stanford.edu/researchpapers/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: ().

Related research
Keywords:

Other versions of this item:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Bagwell, Kyle & Ramey, Garey, 1994. "Advertising and Coordination," Review of Economic Studies, Blackwell Publishing, vol. 61(1), pages 153-72, January. [Downloadable!] (restricted)
Other versions:
- Kyle Bagwell & Garey Ramey, 1990. "Advertising and Coordination," Discussion Papers 903, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
- Kyle Bagwell & Garey Ramey, 1992. "Advertising and Coordination," University of California at San Diego, Economics Working Paper Series 92-07, Department of Economics, UC San Diego.
M. Ayhan Kose & Christopher Otrok & Charles H. Whiteman, 2003. "International Business Cycles: World, Region, and Country-Specific Factors," American Economic Review, American Economic Association, vol. 93(4), pages 1216-1239, September. [Downloadable!]
Hamilton, James D, 1983. "Oil and the Macroeconomy since World War II," Journal of Political Economy, University of Chicago Press, vol. 91(2), pages 228-48, April. [Downloadable!] (restricted)
Bagwell, Kyle & Ramey, Garey, 1994. "Coordination Economies, Advertising, and Search Behavior in Retail Markets," American Economic Review, American Economic Association, vol. 84(3), pages 498-517, June. [Downloadable!] (restricted)
Other versions:
- Bagwell, K. & Ramey, G., 1992. "Coordination Economies, advertising and Search Behavior in Retail Markets," Papers e-92-1, Stanford - Hoover Institution.
- Kyle Bagwell & Garey Ramey, 1992. "Coordination Economies, Advertising and Search Behavior in Retail Markets," University of California at San Diego, Economics Working Paper Series 92-05, Department of Economics, UC San Diego.
Draganska, Michaela & Klapper, Daniel, 2006. "Retail Environment and Manufacturer Competitive Intensity," Research Papers 1953, Stanford University, Graduate School of Business. [Downloadable!]
Inderst, Roman & Shaffer, Greg, 2004. "Retail Mergers: Buyer Power and Product Variety," CEPR Discussion Papers 4236, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Aviv Nevo, 2000. "Mergers with Differentiated Products: The Case of the Ready-to-Eat Cereal Industry," RAND Journal of Economics, The RAND Corporation, vol. 31(3), pages 395-421, Autumn.
Narasimhan, Chakravarthi & Wilcox, Ronald T, 1998. "Private Labels and the Channel Relationship: A Cross-Category Analysis," Journal of Business, University of Chicago Press, vol. 71(4), pages 573-600, October. [Downloadable!] (restricted)
B. Douglas Bernheim & Michael D. Whinston, 1990. "Multimarket Contact and Collusive Behavior," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 1-26, Spring. [Downloadable!] (restricted)

Full references

Statistics
Access and download statistics

Did you know? About 1000 archives contribute their bibliographic data to RePEc.

This page was last updated on 2009-11-5.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.