Executive Summary
A firm’s competitive advantage largely rests on its ability to obtain information across the diverse set of markets in which it operates; customer preferences, competitor actions, and channel members’ plans are a few examples of the type of strategic information that firms most value. This information is often possessed by distributors, which have unique access to channel, customer, and competitor plans. However, supplier organizations face a difficult task in trying to convince their distributor partners to share such information due to fears that this information may be misappropriated. These fears are especially likely for internal (e.g., information about a distributor’s future plans) versus external (e.g., information about competitor actions or customer changes) strategic information. This study assists managers in understanding the conditions under which distributors share substantial amounts of both types (i.e., external and internal) of strategic information with their suppliers. To understand these conditions, this study employs exchange theory to specify a set of exchange-, firm-, and environment-based factors that are likely to affect a distributor’s willingness to share strategic information with its suppliers.
The authors test this conceptual framework with a survey of more than 450 U.S. distributors of medical equipment, industrial equipment, and industrial supplies. The results suggest that distributors distinguish between internal strategic information about their own plans and external strategic information about customers and competitors. Distributors that operate in uncertain environments are especially wary of sharing sensitive internal strategic information with their suppliers. However, this hesitance is tempered when distributors and suppliers are highly interdependent and when suppliers have made significant specialized investments in the channel relationship. In addition, distributor trust in the supplier is also associated with greater sharing of internal strategic information. In contrast, distributors are more willing to share external strategic information about customers and competitors when they have a power advantage in relation to their suppliers, when both parties have made significant specialized investments in their relationship, and when distributors are highly familiar with their product markets. The results emerging from this study provide guidance to both suppliers and distributors regarding how information should be managed as a strategic asset.
Biography
Gary L. Frazier is Richard and Jarda Hurd Professor of Distribution Management in the Marshall School of Business at the University of Southern California. He is recognized around the world for his research on marketing strategy and the organization and management of channels of distribution. His articles have appeared in Journal of Marketing, Journal of Marketing Research, and Strategic Management Journal, among other journals. He has been awarded teaching awards at Indiana University, the University of Illinois, and the University of Southern California. He has consulted and has been an expert witness for several corporations, including Anheuser-Busch, AT&T, Coca-Cola, Gillette, Hasbro, Honeywell, Hewlett-Packard, Lipton, MasterCard International, Merck, Microsoft, 3M, Mobil Oil, Nestle, Northrop, Playtex, Sirius Radio, Taco Bell, UPS, and Wal-Mart. He is currently focused on how knowledge is transferred and integrated across channel members.
Elliot Maltz received his MBA from the University of California at Davis and his PhD in Marketing from the University of Texas at Austin. Before coming to the Atkinson School at Willamette University, he taught for six years in the Marshall School of Business at the University of Southern California. His current research interests include marketing strategy, new product planning, sustainability management, and supply chain planning. His work has been published in Journal of Marketing, Journal of Marketing Research, Journal of the Academy of Marketing Science, Journal of Product Innovation Management, and Journal of Business Logistics. He has consulted and conducted workshops for a variety of companies, including Texas Instruments, Hewlett-Packard, Johnson & Johnson, 3M, the Samsung Corporation, the Monitor Group, the Society for Competitive Intelligence Professionals, the Sony Corporation, Weyerhaeuser, and the Center for Telecommunications Management.
Kersi D. Antia is Assistant Professor of Marketing in the Wisconsin School of Business at the University of Wisconsin–Madison. He obtained his PhD from the University of Southern California and has taught at the Olin School of Business at Washington University in St. Louis and at the Richard Ivey School of Business at the University of Western Ontario in Canada. Kersi’s research interests include distribution channel design and governance and the impact of technology on channel strategy and management; he has taught courses on marketing channels, strategy, and interorganizational relationships at the undergraduate, master’s, and doctoral level. Kersi’s research has been published in Journal of Marketing, Strategic Management Journal, Journal of Consumer Research, and Journal of Management Information Systems. His current work in progress involves tracing the evolution of diverse marketing phenomena (donations to nonprofit organizations, the impact of advertising message and product quality on sales, the survival of startup firms, and the incidence of litigation in franchise relationships).
Aric Rindfleisch is Associate Dean for Research and PhD Programs and Professor of Marketing at the University of Wisconsin–Madison. He has also served as a faculty member at the University of Arizona, Tilburg University, and Korea University and has worked for J. Walter Thompson (Japan), Millward Brown, and the U.S. Army. He teaches courses on new product development and marketing strategy. Aric’s research, which focuses on understanding interorganizational relationships, consumption values, and new product development, has been published in Journal of Marketing, Journal of Marketing Research, Journal of Consumer Research, Journal of Consumer Psychology, Journal of Public Policy & Marketing, Marketing Letters, Strategic Management Journal, and. He is an area editor for International Journal of Research in Marketing; an associate editor for Journal of Supply Chain Management; and a member of the editorial review boards of Journal of Marketing, Journal of Marketing Research, Journal of Consumer Research, Journal of the Academy of Marketing Science, and Journal of International Marketing.
Journal of Marketing, Volume 73, Number 4, July 2009
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