Date of Award

1974

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Abstract

The p u r p o s e o f t h i s scu d y was t o c o n t r i b u t e t o t h e m a r k e tin g s c h o l a r and p r a c t i t i o n e r a b e t t e r u n d e r s t a n d i n g o f t h e n a t u r e o f c o n t r o l i n d i s t r i b u t i o n c h a n n e l s . F i r s t , a c o n c e p t u a l model w hich e x p l a i n s t h e n a t u r e o f c o n t r o l o v e r m a r k e tin g v a r i a b l e s betw een f i r m s on d i f f e r e n t l e v e l s i n d i s t r i b u t i o n c h a n n e ls was d e v e l o p e d . S eco n d , a m eth o d o lo g y was p r o p o s e d f o r e m p i r i c a l l y ex a m in in g t h e r e l a t i o n s h i p s h y p o t h e s i z e d i n t h e p r o p o s e d model o f c h a n n e l c o n t r o l . F i n a l l y , in d e p e n d e n t c a r p e t r e t a i l e r s w ere s u rv e y e d t o exam ine t h e m eth o d o lo g y and t o v e r i f y t h e m iddlem an p o r t i o n o f t h e c o n c e p tu a l model o f c o n t r o l . C o n tr o l i n d i s t r i b u t i o n c h a n n e ls r e s u l t s from a com plex p r o c e s s o f member i n t e r a c t i o n . The l e v e l o f c o n t r o l a c h ie v e d by one f i r m o v e r s p e c i f i c m a r k e t i n g a c t i v i t i e s o f a n o t h e r f ir m on a d i f f e r e n t c h a n n e l l e v e l i s d e t e r m in e d by t h e f o r m e r 's pow er ( p o t e n t i a l t o e x e r t i n f l u e n c e ) as w e ll a s i t s d e s i r e t o i n f l u e n c e t h e l a t t e r . The l e v e l o f c o n t r o l t h a t i s a c h ie v e d i s a l s o d e p e n d e n t upon t h e c o n t r o l l e d f i r m ' s t o l e r a n c e o r w i l l i n g a c c e p t a n c e o f th e c o n t r o l l i n g f i r m ' s i n f l u e n c e . L e v e ls o f o r g a n i z a t i o n a l p e r f o r m a n c e and k ey e x e c u t i v e s a t i s f a c t i o n a r e b o th a f f e c t e d by t h e amount o f c o n t r o l a c h ie v e d i n e n t e r p r i s e c h a n n e l r e l a t i o n s h i p s . Key e x e c u t i v e s a t i s f a c t i o n w ith c h a n n e l r e l a t i o n s h i p s and o r g a n i z a t i o n a l p e r f o r mance a r e two i n t e r d e p e n d e n t v a r i a b l e s , h ow ev er. F i n a l l y , th e x i i c o n t r o l l e d f i r m ' s t o l e r a n c e f o r o t h e r c o n t r o l i s a f f e c t e d by th e s a t i s f a c t i o n o f i t s k ey e x e c u t i v e s w ith and t h e f i r m ' s p e rfo rm a n c e t h a t r e s u l t s from i t s e n t e r p r i s e c h a n n e l r e l a t i o n s h i p s . The model o f c h a n n e l c o n t r o l upon w hich t h i s s t u d y was b a s e d i s d y a d i c and c o n s i s t s o f p a y o f f and t o l e r a n c e f u n c t i o n s f o r each c h a n n e l member. I t i s an e x t e n s i o n o f t h e work o f P r o f e s s o r L o u is P. B u c k lin . A p a y o f f f u n c t i o n d e f i n e s a c h a n n e l m em ber's p e r c e p t i o n s o f th e p r o f i t s t h a t would a c c r u e t o him a t each o f s e v e r a l l e v e l s o f r e l a t i v e c o n t r o l o v e r a m a r k e tin g v a r i a b l e ; e . g . , r e s a l e p r i c i n g . A t o l e r a n c e f u n c t i o n d e f i n e s t h e maximum l e v e l o f r e l a t i v e c o n t r o l by a n o t h e r f i r m i n t h e c h a n n e l t o w hich a c h a n n e l member w i l l i n g l y a c c e d e s a t each l e v e l o f p a y o f f . The i n t e r s e c t i o n o f each m em ber's p a y o f f and t o l e r a n c e f u n c t i o n s d e f i n e s t h e maximum l e v e l o f r e l a t i v e c o n t r o l t h a t can be a c h i e v e d by t h e c o n t r o l l i n g f i r m . The model was t e s t e d among a g ro u p o f c a r p e t r e t a i l e r s in s o u th L o u i s i a n a who s o ld a w e ll known, n a t i o n a l b ran d o f c a r p e t and w ere s u p p l i e d by a common in d e p e n d e n t c a r p e t and r u g d i s t r i b u t o r . A s i n g l e c h a n n e l i s s u e , r e s a l e p r i c e c o n t r o l , was ex am in ed . The d e a l e r s su rv e y e d d i d n o t , on t h e a v e r a g e , b e l i e v e t h a t t h e i r p r o f i t s would be s i g n i f i c a n t l y a f f e c t e d i f t h e c a r p e t d i s t r i b u t o r a d o p te d a more r e s t r i c t i v e r e s a l e p r i c i n g p o l i c y . However, t h e r e w ere s i g n i f i c a n t d i f f e r e n c e s among i n d i v i d u a l d e a l e r ' s a v e r a g e p a y o f f p e r c e p t i o n s . T h is s u g g e s t s t h a t c e r t a i n c l a s s e s o f d e a l e r s h ad p a y o f f p e r c e p t i o n s s i g n i f i c a n t l y d i f f e r e n t from t h e p e r c e p t i o n s o f o t h e r c l a s s e s o f x i i i d e a le r s . M easures were a l s o o b t a i n e d o f t h e d e a l e r s ' a t t i t u d e s tow ard h y p o t h e t i c a l e n t e r p r i s e c h a n n e l s i t u a t i o n s . For each s i t u a t i o n th e d e a l e r s were ask ed t o a s s u n e t h a t i ( 1 . ) t h e s u p p l i e r a d o p te d a p a r t i c u l a r r e s a l e p r i c e p o l i c y ( f i v e p o l i c i e s were u s e d ) ; and ( 2 . ) t h e i r a n n u a l n e t p r o f i t s b e f o r e t a x e s r o s e , f e l l o r s t a y e d t h e same ( f i v e l e v e l s o f d e a l e r a n n u a l n e t p r o f i t c h an g e s w ere u s e d ) . The s tu d y found th e d e a l e r s t o be f a v o r a b l y d i s p o s e d t o o p p o r t u n i t i e s t o i n c r e a s e t h e i r p r o f i t s , b u t n e g a t i v e l y d i s p o s e d t o s i t u a t i o n s o f g r e a t e r d i s t r i b u t o r r e s a l e p r i c e c o n t r o l . D e a le r r e s i s t a n c e t o d i s t r i b u t o r c o n t r o l o f r e t a i l c a r p e t p r i c i n g was found to i n c r e a s e a t an i n c r e a s i n g r a t e a t s u c c e s s i v e l y h i g h e r l e v e l s o f d i s t r i b u t o r r e l a t i v e c o n t r o l . T h is f i n d i n g s u g g e s t s t h a t t h e d e a l e r s s u rv e y e d would r e s i s t d i s t r i b u t o r demands f o r r e t a i l p r i c e c o n t r o l beyond a r e l a t i v e l y h ig h l e v e l o f c o n t r o l no m a t t e r what econom ic r e w a rd s t h e s u p p l i e r o f f e r e d .

Pages

265

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