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Revisiting the Rationale for Direct vs. Indirect Marketing Channels
Stockholm University, Faculty of Social Sciences, School of Business.
2011 (English)In: / [ed] Harry Timmermans, 2011, 1-23 p.Conference paper (Refereed)
Abstract [en]

A manufacturer may choose to sell through own direct channels or through indirect channels,

the latter often controlled through a franchise agreement. It has been suggested that indirect

channels, guided by an incentive structure that essentially reflects market forces external to

the organization, perform better financially than direct channels. Despite this, manufacturers

increasingly use direct channels and, to the extent they exist, exert strong control over

indirect channel partners, thus running the risk of undermining their retailers’

entrepreneurial qualities.

There seems to be other rationales for designing direct channels than those suggested by

marketing channels research. This paper seeks explanations to why manufacturers are using

direct channels in the characteristics of contemporary markets.

The results suggest a number of exploratory rationales for direct channels in today’s markets.

Supply-demand conditions have shifted and manufacturer overcapacity is now commonplace.

Consumer loyalty has decreased in the aftermath of an increase in the number of products

available. Establishing a consistent brand identity in all areas that communicate with

consumers is a top priority of many companies. Through direct channels, or tightly controlled

indirect channels, the manufacturer can make sure the brand is adequately exposed while

sales targets are reached. All in all, a very different set of criteria appears to guide

manufacturers’ channel design decisions.

Place, publisher, year, edition, pages
2011. 1-23 p.
National Category
Economics and Business
Research subject
Business Administration
URN: urn:nbn:se:su:diva-69383OAI: diva2:476504
Available from: 2012-01-12 Created: 2012-01-12 Last updated: 2012-01-13Bibliographically approved

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