jump to navigation

Managing Channel Profits (Jeuland & Shugan 1983) June 12, 2007

Posted by jyu in Qualifying.


  1. Channel coordination problems occur with all marketing decision variables albeit in different directions.  Without coordination, marketing effort will be smaller than optimum.  This is a generalization of the result concerning margins: without coordination, they will be larger than optimum
  2. Achieving channel coordination can be difficult.  However, several mechanisms do exist for achieving coordination (e.g.  joint ownership, Simple contracts, implicit understand, profit sharing, and quantity discounts)
  3. Many channel phenomena (e.g. integration, contracts) may be implicit coordinating mechanisms
  4. Joint ownership and fixed price contracts are often inadequate mechanisms for coordination
  5. Quantity discounts can provide an optimal means for achieving coordination
  6. Quantity discounts can take the form of other marketing phenomena such as cooperative advertising or added service levels
  7. Quantity discounts are a method of profit sharing
  8. The channel coordination can be separated from the profit division issue.  Although, they are related decisions.
  9. A coordinated channel will make R&M’s margins appear to be too low
  10. Coordination, once achieved, will lead to lower margins, higher levels of marketing effort, lower retail prices and larger total channel profits


No comments yet — be the first.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: