Channel Management is General Management

Drucker Peter F. , “The Economy's Dark Continent,” Fortune (April 1962), pp. 103, 265–270.

Stern Louis W. Sturdivant Frederick D. , “Customer-Driven Distribution Systems,” Harvard Business Review (July/August 1987), p. 34.

Arthur Anderson & Company, Inc., Future Trends in Wholesale Distribution (Washington, D.C.: Distribution Research and Education Foundation, 1983), p. 7.

“Industry Markets Goods Through Dual Channels, Says McGraw-Hill Study,” Industrial Distribution (April 1985), p. 15.

This approach to channel strategy ultimately goes back to the seminal work of Copeland Melvin T. , “Relation of Consumers' Buying Habits to Marketing Methods,” Harvard Business Review (April 1923), pp. 282–289. Also influential have been Aspinwall Leo P. , “The Marketing Characteristics of Goods,” and Bucklin Louis P. , “Retail Strategy and Characteristics of Goods,” and Bucklin Louis P. , “Retail Strategy and the Classification of Consumer Goods,” both reprinted in editions of Marketing Classics, Enis Ben M. Cox Keith K. , eds., (Boston, MA: Allyn and Bacon, 1969, 1973, 1977, 1981).

The seminal works here are of course those by Williamson Oliver E. , especially Markets and Hierarchies: Analysis and Antitrust Implications (New York, NY: The Free Press, 1975) and “The Economics of Organization: The Transaction Cost Approach,” American Journal of Sociology, 87 (November 1981): 548–577. Among the more useful applications of Williamson's theory to specific channels decisions are Anderson Erin M. Weitz Barton A. , “A Framework for Analyzing Vertical Integration Issues in Marketing,” (Boston, MA: Marketing Science Institute, 1983), and John George , “An Empirical Investigation of Some Antecedents of Opportunism in a Marketing Channel,” Journal of Marketing Research, 21 (August 1984): 278–289. In addition, by incorporating attention to technology and market structure, Moss Scott J. , An Economic Theory of Business Strategy: An Essay in Dynamics Without Equilibrium (Oxford, England: Martin Robertson, 1981), provides an important but generally neglected supplement to Williamson's theory.

Williamson Oliver E. , The Economic Institutions of Capitalism (New York, NY: The Free Press, 1987), p. 30.

See, for example, McVey Philip , “Are Channels of Distribution What the Textbooks Say?” Journal of Marketing, 24 (January 1961): 61–65 and, years later, Lambert Douglas M. , The Distribution Channel Decision (New York, NY: National Association of Accountants, 1978), pp. 56–59.

Cespedes Frank V. King Jon E. , “International Business Machines: Changes in Marketing Organization,” Harvard Business School Case Study (N9-588-037), p. 9.

Ibid.

A number of studies have found that firms are far more likely to introduce new products through their existing channels. See, for example, Coughlan Anne T. Flaherty M. Therese , “Measuring the International Marketing Productivity of U.S. Semiconductor Companies,” in Gautschi David , ed., Productivity in Distribution (Amsterdam: Elsevier Science Publishing Company, 1983); and Davidson William H. McFetridge D.G. , “Key Characteristics in the Choice of International Technology Transfer Mode,” Journal of International Business Studies, 11 (Summer 1985): 5–21.

Caves Richard E. Porter Michael E. , “From Entry Barriers to Mobility Barriers: Conjectural Decisions and Contrived Deterrence to New Competition,” Quarterly Journal of Economics, 91 (May 1977): 241–261.

Cespedes Frank V. , “Westinghouse Electric Corporation: Control House,” Harvard Business School Case Study (9-587-161), p. 7.

Cespedes Frank V. , “Alloy Rods Corporation,” Harvard Business School Case Study (9-586-046), p. 8.

See Corey E. Raymond , “The Role of Information and Communications Technology in Industrial Distribution,” in Buzzell Robert D. , ed., Marketing in an Electronic Age (Boston, MA: Harvard Business School Press, 1985), pp. 29–51.

“International Business Machines: Changes in Marketing Organization,” op. cit., pp. 12–13.

For documentation and discussion of this trend, see Webster Frederick E. Jr. , “Top Management's Concerns About Marketing: Issues for the 1980s,” Journal of Marketing, 45 (Summer 1981): 9–16; and Hopkins David S. Bailey Earl L. , Organizing Corporate Marketing (New York, NY: The Conference Board, 1984), Research Report #845.

See Narus J.A. Anderson J.C. , “Turn Your Industrial Distributors into Partners,” Harvard Business Review (March/April 1986), p. 67; and Stern Louis W. El-Ansary Adel I. , Marketing Channels, 3rd edition (Englewood Cliffs, NJ: Prentice-Hall, 1988), pp. 240–248.

For a more detailed discussion of distribution costs, see Corey E.R. Cespedes F.V. Rangan V.K. , Going to Market: Distribution Systems for Industrial Products (Boston, MA: Harvard Business School Press, forthcoming), Chapter 4.

See Cespedes Frank V. , “Control Versus Resources in Channel Design,” Industrial Marketing Management, 17 (August 1988): 215–227, for an analysis of the tradeoffs and managerial concerns inherent in these decisions.

Cespedes Frank V. Rangan V. Kasturi , “Becton Dickinson & Company: VACUTAINER Systems Division,” Harvard Business School Case Study (9-587-085).

Porter Michael E. , Competitive Advantage (New York, NY: Free Press, 1985), p. 78.

“Alloy Rods Corporation,” op. cit., p. 10.