Distribution Channels

The first two papers on channel management that appeared in Marketing Science in 1983 have spawned a large and evolving literature. As of early 2022, the Jeuland and Shugan paper had over 1,633 Google Scholar cites, with 427 occurring since 2015. The respective figures for McGuire and Staelin were 1,494 and 614. Interestingly, the majority of these recent cites were not in marketing journals. In fact, about 75%of the cites for the Jeuland and Shugan paper were found in operations management-focused journals. This figure forMcGuire and Staelinwas 53%.Both percentages are a strong indication that the general approach found in these two foundational papers has been widely adopted by nonmarketing researchers. Consequently, it is not difficult to find operations management studies investigating important channel management topics such as two-sided markets and omnichannel retailing (e.g., Lian and van Ryzin, 2021; Gao, Agrawal, and Cui, 2022; Hu et al., 2022) these days. The impact of the game-theoretic channel research on the operations management field in recent years reflects the growing recognition of the importance of understanding the strategic interactions among key players in supply chain management in addition to the field’s traditional focus on optimization and logistical efficiency management. This expanded interest is also spurred by the new emerging channel systems and the associated managerial problems brought about by the Internet. Often models that reflect the complex new channel structures and emerging selling formats lack themathematical tractability of simpler channelmodels of the previous decades. With increased computing power, numerical analysis is a new viable way of deriving and analyzing equilibrium solutions for such complex models. However, regardless of the methodological approach taken, all of these game theory papers follow the same general format, i.e., carefully defining and characterizing the environment being studied, determining the interaction between the sellers and the consumers in terms of a demand structure, and specifying the rules of the game between the members of the distribution system. The emphasis on better understanding the new and emerging channel systems is also related to the recent progress in the research of online consumer behavior, especially concerning social networks, online channels, and two-sided markets. Such advances point to the need to analyze the implications of these behavioral characteristics for channel strategies. Finally, we note that the majority of the analytic channel papers assume complete rationality and perfect information among channel members. Deviating from this standard paradigm to investigate the impact of the characteristics of managerial decision-making on channel strategies can be a fruitful direction for future research.