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Channel Optimization in Complex Marketing Systems

Author

Listed:
  • Marcel Corstjens

    (INSEAD, France)

  • Peter Doyle

    (Bradford University, England)

Abstract

Channel optimization in multiple-channel systems is a basic problem in marketing and one which has not received much attention in the literature. A model is presented which simultaneously solves three distribution decisions--the manufacturer's choice of channels (channel strategy), the number of outlets to operate within each channel (channel intensity), and the pricing structure between channels (channel management). The general form of this model is not solvable by conventional programming techniques because it is intrinsically nonconvex. The paper shows how signomial geometric programming can provide a theoretically attractive and practical solution procedure. The model is estimated and solved on a real-life case study and the important managerial and theoretical implications are discussed.

Suggested Citation

  • Marcel Corstjens & Peter Doyle, 1979. "Channel Optimization in Complex Marketing Systems," Management Science, INFORMS, vol. 25(10), pages 1014-1025, October.
    • Handle: RePEc:inm:ormnsc:v:25:y:1979:i:10:p:1014-1025
    DOI: 10.1287/mnsc.25.10.1014
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    Citations

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    Cited by:

    1. He, Peng & He, Yong & Xu, Henry, 2019. "Channel structure and pricing in a dual-channel closed-loop supply chain with government subsidy," International Journal of Production Economics, Elsevier, vol. 213(C), pages 108-123.
    2. Cai, Gangshu (George) & Zhang, Zhe George & Zhang, Michael, 2009. "Game theoretical perspectives on dual-channel supply chain competition with price discounts and pricing schemes," International Journal of Production Economics, Elsevier, vol. 117(1), pages 80-96, January.
    3. Musso, Fabio, 1999. "Relazioni di canale e strategie di acquisto delle imprese commerciali. Potere e stabilità nella grande distribuzione britannica [Channel Relationships and Buying Strategies of British Large Retaile," MPRA Paper 58508, University Library of Munich, Germany, revised 1999.
    4. Khouja, Moutaz & Park, Sungjune & Cai, Gangshu (George), 2010. "Channel selection and pricing in the presence of retail-captive consumers," International Journal of Production Economics, Elsevier, vol. 125(1), pages 84-95, May.

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