In virtually all marketing channel relationships, one of the parties eventually will engage in an action that another channel member considers potentially destructive for the relationship. How a particular channel member reacts to such an act has implications for the long-term viability and success of the relationship. On the basis of alarge data set collected from both a focal supplier and its independent dealers, the authors classify dealers’ responses to a supplier’s destructive acts by extending the response typology of exit, voice, and loyalty, which is based on Hirschman’s seminal writings on responses to decline in organizations and states. This study finds that dealers’ reactions are influenced by several antecedentfactors: perceived intensity of the supplier’s destructive act, the attributions relative to the act, relationship quality before the act, and the level of interdependence between dealer and supplier. The results suggest that these more proximal dealer responses affect subsequent dealer performance and overall perceptions of relationship quality after an act. The authors draw several implications forboth dealers and suppliers.
Examining the Impact of Destructive Acts in Marketing Channel Relationships
At one time or another in virtually every marketing channel, a channel member has engaged in actions or has adopted policies that are viewed by other members as destructive to the working relationships within that channel. Suppliers may add new distributors to sales territories or cultivatesales directly to consumers through the Internet (e.g., www.hewlett-packard.com), thereby potentially harming existing distributors and retailers. Sometimes, without notice, suppliers drop products from product lines, depriving distributors of future sales opportunities and making current inventories obsolete. Similarly, distributors can reduce the shelf, floor, or catalog space allocated tosuppliers, causing damage to the suppliers’ sales, profits, and/or reputations. All these types of actions have negative repercussions and can threaten the well-being of the relationships in the channels in which they occur. The rapid growth of multichannel distribution systems has significantly increased the potential for discord between suppliers and channel intermediaries. Recent examples abound thatunderscore the impact that destructive acts (DAs) and the resulting conflicts may have on channel members. For example, Compaq’s plan to help right its struggling personal computer (PC) business involves selling 60% of its business PCs directly by the end of 2000. However, the channel backlash from this distribution policy could hurt Compaq’s efforts to restore profitability; as one industryanalyst observes, “small and midsize businesses tend to be heavily influenced by resellers.” The resellers themselves warn that
Compaq won’t be able to provide the personal service and support they say customers need. “We bring a lot of customer value to the equation, and that’s going to disappear if we’re cut out,” squawked one reseller. Another reseller confirmed that feeling, “If we’re forced tocompete too much with Compaq, we’ll make other options available.” (McDougall 2000)
*Jonathan D. Hibbard is Assistant Professor of Marketing, Boston University School of Management (e-mail: email@example.com). Nirmalya Kumar is Professor of Marketing and e-Commerce, IMD–International Institute for Management Development, Lausanne, Switzerland (e-mail: firstname.lastname@example.org). Louis W. Stern is John D. GrayDistinguished Professor of Marketing, J.L. Kellogg Graduate School of Management, Northwestern University, and a Visiting Scholar at the Haas School of Business, University of California at Berkeley (e-mail: email@example.com). The authors thank the Marketing Science Institute and a member firm of the Marketing Science Institute for providing funding and support for this study....