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Keywords Channel management, Product life cycle, Distribution
Abstract Today's dynamic markets are forcing firms to design increasingly complex channel strategies involving multiple channels of distribution. As the complexity of these systems increases, so too does the opportunity for conflict between individual channel coalitions within the firm. Whereas this hybrid channel conflict can reduce channel performance, it can also serve as a mechanism forcing internal channel coalitions to work harder and smarter to serve their markets. In this paper, we develop and test six hypotheses related to hybrid channel conflict. The findings indicate that hybrid channel conflict is an important determinant of both channel performance and satisfaction. The results suggest further that the relationship between hybrid channel conflict and channel performance is moderated by the lifecycle stage. Moreover, our data support the view that the frequency of conflict, but not its intensity, has a negative effect on channel system performance. We conclude with a discussion of the theoretical and managerial implications of this study.
Over the past decade marketers have adopted increasingly complex channel strategies in response to shifts in consumer shopping behavior, the globalization of markets, and the advent of the Internet. Indeed, the use of multiple channels of distribution to serve a given product-market is rapidly becoming the rule rather than the exception (Frazier, 1999; Moriarty and Moran, 1990). The primary motivations for supplier firms establishing multi-channel arrangements are the desire to increase market share and to reduce costs (Frazier and Antia, 1995). This increasingly prevalent trend, which IBM refers to as a "hybrid distribution strategy," has dramatically altered the demands placed on channel managers.
Hybrid distribution strategies
Firms benefit from hybrid distribution strategies in a variety of ways. First, it allows them to adapt to changing customer needs and shopping patterns. Such adaptive capability has proven useful to firms as they attempt to respond to the emergence of the Internet and other novel distribution channels. Second, firms with broad product lines can benefit because it is unlikely that a single channel type will be optimal for all products. Third, companies with excess manufacturing capacity can benefit from additional outlets when existing channels are saturated with supply. Finally, additional channels enable a firm to focus on more precise target markets, thereby improving...