Why and how do individual entrepreneurs use digital channels in an emerging market? Determinants of use and channel coordination

PurposeMany studies have examined the use of social media by either customers or firms, especially in developed markets. However, little is known about why young individual entrepreneurs use digital channels (DCs) as business platforms in emerging markets (EMs) and how they integrate them into their marketing activities. This paper aims to try filling this gap.Design/methodology/approachGiven the exploratory nature of this research, the authors employ a qualitative approach based on a focus group (12 participants) and semi-structured interviews (8 participants) with young entrepreneurs in Saudi Arabia. The authors adopted a deductive thematic analysis based on pre-determined theoretical frameworks to analyse and interpret the data.FindingsThe authors found that the young entrepreneurs mainly used Instagram, Snapchat and, to a moderate extent, YouTube as digital marketing channels for advertising purposes. However, they used WhatsApp for establishing direct contact and personalising communication with customers. The entrepreneurs used these channels because they are useful, easy to use, cost-effective, fun and widely used by local customers. The authors also found that the entrepreneurs used social media and offline channels conjointly in three main marketing activities (communication/promotion, transactions and customer service) to boost the customer purchasing process. The complementarity of social media and offline channels was found to improve brand visibility, enlarge markets and strengthen the customer relationship. However, the achievement of these benefits varied across small firms depending on the entrepreneurs' abilities in coordinating multiple channels and according to the distinctiveness of their businesses.Research limitations/implicationsThis study contributes to the entrepreneurial literature by extending the unified theory of acceptance and use of technology (UTAUT) to explain the motives behind the use of DCs amongst individual entrepreneurs. Furthermore, this paper proposes a novel theoretical framework for studying the interaction between online and offline marketing channels during the purchasing process. Through this framework, the study provides new insights into channel coordination and multi-channel customer behaviours from the entrepreneur's perspective.Practical implicationsThis study helps understand why small firms use different DCs. Likewise, it shows how young entrepreneurs coordinate online/offline channels in a complementary manner. The findings could also help in designing appropriate programmes encouraging young entrepreneurs to use online channels and social media to enhance their business activities.Originality/valueThis study offers a novel attempt at explaining the use of DCs and their interaction with traditional channels from the entrepreneur's perspective and brings new insights to why and how young entrepreneurs use DCs in an emerging market.

Low-Price Guarantees in a Dual Channel of Distribution

In a dual channel, the manufacturer's low-price guarantee facilitates price discrimination and channel coordination and the manufacturer may choose price-beating, price-matching, or no guarantee.

Rebate Strategy Selection and Channel Coordination of Competing Two-Echelon Supply Chains

Rebate has long been a crucial tool that has attracted researchers from a diverse range of fields including marketing and supply chain management. When a manufacturer uses a retailer for reaching end customers, the rebate strategy undertakes an additional dimension. Here we show whether the two rebate strategies, manufacturer rebate and channel rebate, can be the optimal choice for the manufacturer and the retailer. And we aim at full coordination with rebate. Game theory is exploited to identify the equilibrium rebate decisions, which are fully characterized with two rebate strategies considering rebate sensitivity. Furthermore, we demonstrate how the decisions depend on parameters, such as market size, rebate redemption rate, and competition intensity in monopoly and duopoly supply chain systems. Our work also coordinates the supply chain with two coordination policies and examines if they can achieve full coordination. Counterintuitive findings suggest that the channel rebate with sensitivity and discrimination is not effective and the manufacturer rebate is the unique optimal option. Besides, the coordination can be realized with a centralized rebate in monopoly setting when the manufacturer forgoes her own interest. Then full coordination can be achieved in duopoly setting with a new coordination policy, rebate combination, given the redemption rate for the channel rebate is lower compared with the manufacturer rebate. Managerial insights are suggested that offering rebates with discrimination can have significant inventory and coordination policy implications and can lead to a double win under a well-controlled redemption rate.