Multiple channels are becoming the rule rather than the exception in the distribution of goods and services. The adoption of multiple channel strategies may deliver increased sales volumes and lower distribution costs, but may also provoke channel conflict and even an increase in distribution costs. Despite the popularity and implications of multiple channel strategies, little is known about these distribution structures. In fact, there is a remarkable theoretical and empirical research vacuum in respect of the reasons why multiple channels of distribution emerge. Consequently, the determinants of multiple channel strategies remain an issue, virtually unexplored. The present work is one of the first studies to address this research void. In particular, the work develops a model encapsulating a set of hypotheses on how certain factors determine the development of multiple channel strategies. Given the absence of a directly-related theoretical body of literature, the hypotheses were generated following a holistic view that considers channel design as a result of five different theoretical perspectives, which have been used in the research of other channel design and management issues. These theoretical perspectives are transaction cost economics, the literature on the organisation-environment interface, the resource and capability view of the firm, the competitive strategy field, and the traditional marketing literature on distribution channels. The development of the hypotheses also combines feedback from six exploratory interviews and news and reports in particular from the financial press. To test the research hypotheses, data was collected using a structured questionnaire, personally administered, from 62 financial services organisations. The sample concentrated on companies dealing with (at least) one of the following products: Motor insurance, mortgages, unit trusts, and personal pensions. Logistic regression was the 10 statistical technique utilised to assess the significance of the research hypotheses. For the testing process, two distinct classifications of channel strategies were defined. One involved the utilisation of cluster analysis to identify companies with different patterns of channel usage. This resulted in a classification of channel strategies that considers as multi-channel, only those cases where significant volumes of sales are obtained from each one of two or more distinct channels. The second classification considers as a multichannel strategy, any case where a product is distributed also by at least two distinct channels, but regardless of the importance of the sales obtained through each of them. These two classifications led to the identification of two different sets of relevant variables. Interactions between independent variables were also the subject of statistical analysis. The results supported some of the hypothesised relationships and led to the identification of other significant relationships not initially predicted. In general, the statistical findings indicate that multiple channels are positively associated with volatility in consumers' needs, heterogeneous consumers, market maturity, competitive strength, and scope economies; negatively associated with competitor and intermediary volatility, heterogeneous intermediaries, profit goals, consumer involvement, and internal channel conflict; and associated with intermediate levels of product sophistication. Therefore, this work contributes to the clarification of multiple channel choice through the development and testing of a set of propositions suggesting the factors determining the development of multiple channel strategies. These insights have the potential to stimulate research into multiple channel strategies, and to make multiple channel design a more systematic process, facilitating the development of more customer and competitor-driven distribution systems. The issues raised in this work demonstrate that there is a large scope for future research into multiple channel strategies.
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:632645 |
| Date | January 2000 |
| Creators | Coelho, Filipe J. F. |
| Publisher | University of Manchester |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
Page generated in 0.0065 seconds