The effects of demand uncertainty on channel structure

Motivated by the business practice whereby some manufacturers open their own retail stores despite the existence of more efficient independent retailers, this paper examines the distribution channel choice of competing manufacturers under demand uncertainty and resale price maintenance. We character...

Full description

Saved in:
Bibliographic Details
Published in:European journal of operational research 2010-12, Vol.207 (3), p.1471-1488
Main Authors: Cao, Wen, Jiang, Bo, Zhou, Deming
Format: Article
Language:English
Subjects:
Applied sciences
Asymmetry
Business
Channels
Competition
Demand
Demand uncertainty
Distribution channels
Duopoly competition
Exact sciences and technology
Inventory control, production control. Distribution
Manufacturers
Marketing
Markets
Operational research and scientific management
Operational research. Management science
Operations research
Resale price maintenance
Retail channel structure
Retail stores
Retailing
Retailing Demand uncertainty Retail channel structure Duopoly competition
Studies
Uncertainty
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Motivated by the business practice whereby some manufacturers open their own retail stores despite the existence of more efficient independent retailers, this paper examines the distribution channel choice of competing manufacturers under demand uncertainty and resale price maintenance. We characterize the conditions for the equilibrium channel structures. We find that (1) manufacturers tend to distribute products with more design attributes through their own retail stores, (2) manufacturers with highly substitutable products are more likely to use independent retailers, and (3) at least one manufacturer has more incentive to open its own retail stores when facing an increase of the market size asymmetry.
ISSN:0377-2217
1872-6860
DOI:10.1016/j.ejor.2010.06.001