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The Length of Product Line in Distribution Channels

Author

Listed:
  • Yunchuan Liu

    () (College of Business, University of Illinois at Urbana-Champaign, Champaign, Illinois 61820)

  • Tony Haitao Cui

    () (Carlson School of Management, University of Minnesota, Minneapolis, Minnesota 55455)

Abstract

This paper studies a manufacturer's optimal decisions on extending its product line when the manufacturer sells through either a centralized channel or a decentralized channel. We show that a manufacturer may provide a longer product line for consumers in a decentralized channel than in a centralized channel if the market is fully covered. In addition, a manufacturer's decisions on the length of its product line may not always be optimal from a social welfare perspective in either a centralized or a decentralized channel. Under certain conditions, a decentralized channel can provide the product line length that is socially optimal, whereas a centralized channel cannot.

Suggested Citation

  • Yunchuan Liu & Tony Haitao Cui, 2010. "The Length of Product Line in Distribution Channels," Marketing Science, INFORMS, vol. 29(3), pages 474-482, 05-06.
  • Handle: RePEc:inm:ormksc:v:29:y:2010:i:3:p:474-482
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    File URL: http://dx.doi.org/10.1287/mksc.1090.0533
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. repec:eee:jouret:v:91:y:2015:i:4:p:546-568 is not listed on IDEAS
    2. Xiao, Tiaojun & Xu, Tiantian, 2014. "Pricing and product line strategy in a supply chain with risk-averse players," International Journal of Production Economics, Elsevier, vol. 156(C), pages 305-315.
    3. repec:eee:proeco:v:194:y:2017:i:c:p:126-134 is not listed on IDEAS
    4. Yenipazarli, Arda, 2017. "To collaborate or not to collaborate: Prompting upstream eco-efficient innovation in a supply chain," European Journal of Operational Research, Elsevier, vol. 260(2), pages 571-587.
    5. Angelis, Jannis & Parry, Glenn & Macintyre, Mairi, 2012. "Discretion and complexity in customer focused environments," European Management Journal, Elsevier, vol. 30(5), pages 466-472.
    6. repec:eee:jouret:v:91:y:2015:i:1:p:50-67 is not listed on IDEAS
    7. Zhang, Yibin & Hafezi, Maryam & Zhao, Xuan & Shi, Victor, 2017. "The impact of development cost on product line design and its environmental performance," International Journal of Production Economics, Elsevier, vol. 184(C), pages 122-130.
    8. repec:eee:jouret:v:91:y:2015:i:3:p:451-467 is not listed on IDEAS
    9. Liang Guo & Juanjuan Zhang, 2012. "Consumer Deliberation and Product Line Design," Marketing Science, INFORMS, vol. 31(6), pages 995-1007, November.
    10. Hara, Reiya & Matsubayashi, Nobuo, 2017. "Premium store brand: Product development collaboration between retailers and national brand manufacturers," International Journal of Production Economics, Elsevier, vol. 185(C), pages 128-138.
    11. Rajagopalan, S. & Xia, Nan, 2012. "Product variety, pricing and differentiation in a supply chain," European Journal of Operational Research, Elsevier, vol. 217(1), pages 84-93.

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