Robert F. Lusch: Mentor, Collaborator, and Colleague

The author reviews his relationship with Professor Robert F. Lusch, including joint research with some of their doctoral students. Their work addressed questions pertaining to marketing channel power and dependence, channel conflict, and channel member satisfaction as well as contracting among channel member firms.

Vertical Channel Conflict Coordination Strategy of e-Commerce Supply Chain under Platform Brand Empowerment

We develop a game model for a supply chain consisting of one e-commerce platform, one supplier from other channels, and one retailer. The platform has a well-known brand that can influence consumers’ purchase decisions, and it provides good-quality products with high prices, while supplier from other channels provides cheaper products but possibly with low quality, and there may even be some serious quality problems, sometimes leading to serious problems such as “free-riding” behavior by the retailer and reducing the profits of the supply chain members. First, we study the decisions of platform and retailer under centralized decision (CD) scenario, decentralized decision (DD) scenario, cost sharing contract (CS) scenario, and minimum order quantity contract (QC) scenario. Second, we found that channel conflicts have a negative impact on supply chain members under DD scenario; however, CS and QC scenarios can make the optimal empowerment level of platform the same as CD scenario and encourage retailer to order more products from platform. Finally, the improvement effect in QC and CS scenarios is affected by the substitutability of the two products, the coefficient of empowerment cost, and the reaction coefficient of product price on goodwill. Furthermore, we found that under QC scenario, only within an appropriate range can the platform and the retailer achieve a win-win situation.

Implications of Contract-Bargaining Mechanisms for Coordination and Profit Sharing in a Distribution Channel

The present work models a three-level distribution channel that has a manufacturer, multiple distributors, and multiple retailers under each distributor to analyze channel members’ cooperative, semicooperative, and noncooperative decisions for an arbitrary replenishment cycle other than the first in the infinite time horizon. It uses two sequential bargaining processes: forward contract-bargaining (FCB) and backward contract-bargaining (BCB) to eliminate channel conflict and allocate additional profit among channel members. We successfully implement a hybrid contract mechanism that combines wholesale price discount (WPD) and subsidy on holding cost for channel coordination. The concept of Nash bargaining is applied for additional profit sharing. The proposed hybrid contract can fully coordinate the tree-like supply chain and enrich the entire profit of the supply chain at its best. The manufacturer provides WPD to each distributor separately, and each distributor provides a subsidy to each of its retailers independently. Both the sequential bargaining processes are designed in such a way that an upstream channel member always has the opportunity to account for different reservations for its different downstream members. Although each bargaining process eliminates the channel conflict, finds win-win ranges, and distributes surplus profit, the distributors prefer BCB, whereas the manufacturer and the retailers prefer the FCB. Also, without receiving WPD, the distributors have the ability to coordinate the supply chain and find win-win profits by subsidizing the retailers’ holding costs. A numerical case is presented to explain the findings of the work.

Unintended CSR Violation Caused by Online Recommendation

This paper investigates whether online recommendation of products that exhibit corporate social responsibility (CSR) penalizes the purchase intention of non-CSR products. When consumers browse online retail stores and consider buying a particular product, online recommendation is made (e.g., “Customers who viewed this item also viewed”). This recommendation is often made between products of which attributes have a trade-off relationship (e.g., CSR vs. price). (A trade-off is where one thing increases, and another must decrease. A trade-off relationship between CSR and price suggests a pair of competing products are available: a more expensive, CSR product and an economical, non-CSR product.) We borrowed from the psychological literature of evaluability to hypothesize that when a CSR product is recommended, consumers would decrease their purchase intention of the economical product. However, when an economical product is recommended, consumers would maintain their purchase intention of the CSR product. We further hypothesized that this asymmetric effect would disappear when reinforcement information regarding the CSR is provided. Two carefully designed experiments conducted in China supported these hypotheses. Our findings contribute to the growing literature on online retailers by elucidating the psychological impact of online recommendations, which may influence manufacturers’ sales in an unexpected manner. The findings also indicate that online recommendations could be a potential source of channel conflict. While this study newly verifies the unintended CSR violation effect of online recommendations, future studies are required to expand our understanding of the CSR violation effect by investigating the effect under the trade-off relationship with other attributes of the product.

Influence of marketing channel conflicts on channel innovation capability: the mediating role of channel cohesion and the moderating role of channel network structure

Purpose In this paper, extending the research on the positive effects of marketing channel conflicts, this paper aims to examine how functional and dysfunctional conflicts influence channel innovation capability by triggering channel cohesion and investigate the moderating role of a distributor’s network structure. Design/methodology/approach Based on social network theory and Coser’s conflict theory, this paper develops a framework, tested using Chinese manufacturers’ data, which incorporated six key variables, namely, functional conflict, dysfunctional conflict, channel cohesion, channel innovation capability, network density and network centrality. Findings The empirical results revealed that functional conflict can arouse channel cohesion and that distributor network density and centrality positively moderates this relationship; dysfunctional conflict negatively affects channel cohesion, but distributor network density negatively moderates this relationship; channel cohesion had a mediating effect on the relationship between channel conflict and channel innovation capability. Originality/value This paper contributes to the research on channel conflict by incorporating the entire channel system’s innovation capability as a positive consequence of channel conflict and expands the channel conflict literature that adopts a network structure perspective.