Advertisement

Channel Extension Strategies: The Crucial Roles of Internal Capabilities and Customer Lock-In

  • Jochen Binder
  • Dennis HerhausenEmail author
  • Nicolas Pernet
  • Marcus Schögel
Part of the European Retail Research book series (ERR)

Abstract

This study addresses the important but yet unresolved question of how firms can create competitive advantage from their multichannel marketing strategy. More specifically, the authors investigate the antecedents of channel extension strategies and their performance implications. Results from an empirical study including top managers from 308 firms indicate that in addition to environmental factors, a firm's channel expansion is directly related to its strategic channel management capability, and that this capability is more important in turbulent environments. Furthermore the study reveals that firms need an appropriate customer lock-in strategy to benefit from addition of novel channel types or traditional channel expansion.

Key words

Multichannel Management Channel Extension Strategies Strategic Channel Mmanagement Capability Customer Lock-In Competitive Advantage 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Alba, J. W.; Hutchinson, J. W. (1987): Dimensions of consumer expertise, in: Journal of Consumer Research, Vol. 13, No. 4, pp. 411–454.CrossRefGoogle Scholar
  2. Amit, R.; Schoemaker, P. J. H. (1993): Strategic assets and organizational rent, in: Strategic Management Journal, Vol. 14, No. 1, pp. 33–46.CrossRefGoogle Scholar
  3. Ansari, A.; Mela, C. F.; Neslin, S. A. (2008): Customer channel migration, in: Journal of Marketing Research, Vol. 45, No. 1, pp. 60–76.CrossRefGoogle Scholar
  4. Armstrong, J. S.; Overton, T. S. (1977): Estimating nonresponse bias in mail surveys, in: Journal of Marketing Research, Vol. 14, No. 3, pp. 396–402.CrossRefGoogle Scholar
  5. Avery, J.; Steenburgh, T.; Deighton, J.; Thomas, G. P. (2012): Adding Bricks to Clicks: Predicting the Patterns of Cross-Channel Elasticities Over Time, in: Journal of Marketing, Ahead of Print.Google Scholar
  6. Baird, I. S.; Thomas, H. (1985): Toward a contingency model of strategic risk taking, in: Academy of Management Review, Vol. 10, No. 2, pp. 230–243.Google Scholar
  7. Barney, J. B. (1991): Firm resources and sustained competitive advantage, in: Journal of Management, Vol. 17, No. 1, pp. 99–120.CrossRefGoogle Scholar
  8. Barr, P. S.; Stimpert, J. L.; Huff, A. S. (1992): Cognitive change, strategic action, and organizational renewal, in: Strategic Management Journal, Vol. 13, No. 5, pp. 15–36.CrossRefGoogle Scholar
  9. Bettinger, C. (1989): Use corporate culture to trigger high performance, in: Journal of Business Strategy, Vol. 10, No. 2, pp. 38–42.CrossRefGoogle Scholar
  10. Bhattacharya, C. B.; Rao, H.; Glynn, M. A. (1995): Understanding the bond of identification: An investigation of its correlates among art museum members, in: The Journal of Marketing, Vol. 59, No. 4, pp. 46–57.CrossRefGoogle Scholar
  11. Bolton, R. N.; Lemon, K. N.; Verhoef, P. C. (2004): The theoretical underpinnings of customer asset management: a framework and propositions for future research, in: Journal of the Academy of Marketing Science, Vol. 32, No. 3, pp. 271–292.CrossRefGoogle Scholar
  12. Burnham, T. A.; Frels, J. K.; Mahajan, V. (2003): Consumer switching costs: a typology, antecedents, and consequences, in: Journal of the Academy of Marketing Science, Vol. 31, No. 2, pp. 109.CrossRefGoogle Scholar
  13. Chong, S.; Pervan, G. (2007): Factors Influencing the Extent of Deployment of Electronic Commerce for Small-and Medium Sized Enterprises, in: Journal of Electronic Commerce in Organizations, Vol. 5, No. 1, pp. 1–29.CrossRefGoogle Scholar
  14. Coelho, F.; Easingwood, C. (2005): Determinants of multiple channel choice in financial services: an environmental uncertainty model, in: Journal of Services Marketing, Vol. 19, No. 4, pp. 199–211.CrossRefGoogle Scholar
  15. Coelho, F.; Easingwood, C. (2008): An exploratory study into the drivers of channel change, in: European Journal of Marketing, Vol. 42, No. 9/10, pp. 1005–1022.CrossRefGoogle Scholar
  16. Coughlan, A. T.; Anderson, E.; Stern, L. W.; El-Ansary, A. I. (2006): Marketing Channels, Upper Saddle River, NJ.Google Scholar
  17. Creswell, J. W. (2009): Research design: Qualitative, quantitative, and mixed methods approaches, Thousand Oaks, CA.Google Scholar
  18. Damodaran, A. (2008): Strategic Risk Taking: A Framework for Risk Management, Upper Saddle River, NJ.Google Scholar
  19. Day, G. S. (1994): The capabilities of market-driven organizations, in: Journal of Marketing, Vol. 58, No. 4, pp. 37–52.CrossRefGoogle Scholar
  20. Diamantopoulos, A.; Winklhofer, H. M. (2001): Index construction with formative indicators: an alternative to scale development, in: Journal of Marketing Research, pp. 269–277.Google Scholar
  21. DoubleClick (2004): Retail Details: Best Practices in Multi-Channel Integration, March 2004.Google Scholar
  22. Emerson, C. J.; Grimm, C. M. (1999): Buyer-seller customer satisfaction: the influence of the environment and customer service, in: Journal of Business & Industrial Marketing, Vol. 14, No. 5/6, pp. 403–415.CrossRefGoogle Scholar
  23. Fornell, C.; Larcker, D. F. (1981): Evaluating structural equation models with unobservable variables and measurement error, in: Journal of Marketing Research, Vol. 18, No. 1, pp. 39–50.CrossRefGoogle Scholar
  24. Geyskens, I.; Gielens, K.; Dekimpe, M. G. (2002): The market valuation of internet channel additions, in: Journal of Marketing, Vol. 66, No. 2, pp. 102–119.CrossRefGoogle Scholar
  25. Grant, R. M. (1991): The resource-based theory of competitive advantage: implications for strategy formulation, in: California Management Review, Vol. 33, No. 3, pp. 114–135.CrossRefGoogle Scholar
  26. Grant, R. M. (2005): Contemporary strategy analysis, Hoboken, NJ.Google Scholar
  27. Homburg, C.; Hoyer, W. D.; Fassnacht, M. (2002): Service orientation of a retailer’s business strategy: dimensions, antecedents, and performance outcomes, in: Journal of Marketing, Vol. 66, No. 4, pp. 86–101.CrossRefGoogle Scholar
  28. Hunt, S. D.; Morgan, R. M. (1995): The comparative advantage theory of competition, in: Journal of Marketing, Vol. 59, No. 2, pp. 1–15.CrossRefGoogle Scholar
  29. Jarvis, C. B.; MacKenzie, S. B.; Podsakoff, P. M. (2003): A critical review of construct indicators and measurement model misspecification in marketing and consumer research, in: Journal of consumer research, Vol. 30, No. 2, pp. 199–218.CrossRefGoogle Scholar
  30. Jaworski, B. J.; Kohli, A. K. (1993): Market orientation: antecedents and consequences, in: The Journal of Marketing, Vol. 57, No. 3, pp. 53–70.CrossRefGoogle Scholar
  31. Jindal, R. P.; Reinartz, W.; Krafft, M.; Hoyer, W. D. (2007): Determinants of the variety of routes to market, in: International Journal of Research in Marketing, Vol. 24, No. 1, pp. 17–29.CrossRefGoogle Scholar
  32. Johnson, J. L.; Lee, R. P. W.; Saini, A.; Grohmann, B. (2003): Market-focused strategic flexibility: conceptual advances and an integrative model, in: Journal of the Academy of Marketing Science, Vol. 31, No. 1, pp. 74.CrossRefGoogle Scholar
  33. Kabadayi, S.; Eyuboglu, N.; Thomas, G. P. (2007): The performance implications of designing multiple channels to fit with strategy and environment, in: The Journal of Marketing, Vol. 71, No. 4, pp. 195–211.CrossRefGoogle Scholar
  34. Keller, K. L. (2010): Brand equity management in a multichannel, multimedia retail environment, in: Journal of Interactive Marketing, Vol. 24, No. 2, pp. 58–70.CrossRefGoogle Scholar
  35. Kerin, R. A.; Varadarajan, P. R.; Peterson, R. A. (1992): First-mover advantage: a synthesis, conceptual framework, and research propositions, in: The Journal of Marketing, Vol. 56, No. 4, pp. 33–52.CrossRefGoogle Scholar
  36. Kumar, V. (2010): A customer lifetime value-based approach to marketing in the multichannel, multimedia retailing environment, in: Journal of Interactive Marketing, Vol. 24, No. 2, pp. 71–85.CrossRefGoogle Scholar
  37. Kumar, V.; Venkatesan, R. (2005): Who are the multichannel shoppers and how do they perform? Correlates of multichannel shopping behavior, in: Journal of Interactive Marketing, Vol. 19, No. 2, pp. 44–62.CrossRefGoogle Scholar
  38. Lee, R. P.; Grewal, R. (2004): Strategic responses to new technologies and their impact on firm performance, in: Journal of Marketing, Vol. 68, No. 4, pp. 157–171.CrossRefGoogle Scholar
  39. Levy, M.; Powell, P.; Worrall, L. (2005): Strategic Intent and E-Business in SMEs: Enablers and Inhibitors, in: Information Resources Management Journal, Vol. 18, No. 4, pp. 1–20.CrossRefGoogle Scholar
  40. Lindell, M. K.; Whitney, D. J. (2001): Accounting for common method variance in crosssectional research designs, in: Journal of Applied Psychology, Vol. 86, No. 1, pp. 114.CrossRefGoogle Scholar
  41. Marsh, H. W.; Hocevar, D. (1985): Application of confirmatory factor analysis to the study of self-concept: first-and higher order factor models and their invariance across groups, in: Psychological Bulletin, Vol. 97, No. 3, pp. 562.CrossRefGoogle Scholar
  42. Martin, L. (2005): Internet adoption and use in small firms: internal processes, organizational culture and the roles of the owner-manager and key staff, in: New Technology, Work and Employment, Vol. 20, No. 3, pp. 190–204.CrossRefGoogle Scholar
  43. Montoya-Weiss, M. M.; Voss, G. B.; Grewal, D. (2003): Determinants of online channel use and overall satisfaction with a relational, multichannel service provider, in: Journal of the Academy of Marketing Science, Vol. 31, No. 4, pp. 448.CrossRefGoogle Scholar
  44. Musteen, M.; Barker, V. L., III; Baeten, V. L. (2006): CEO attributes associated with attitude toward change: the direct and moderating effects of CEO tenure, in: Journal of Business Research, Vol. 59, No. 5, pp. 604–612.CrossRefGoogle Scholar
  45. Myers, J. B.; Pickersgill, A. D.; Van Metre, E. S. (2004): Steering customers to the right channels, in: McKinsey quarterly, Vol. 4, November 2004, pp. 36–47.Google Scholar
  46. Neslin, S. A.; Grewal, D.; Leghorn, R.; Shankar, V.; Teerling, M. L.; Thomas, J. S.; Verhoef, P. C. (2006): Challenges and opportunities in multichannel customer management, in: Journal of Service Research, Vol. 9, No. 2, pp. 95.CrossRefGoogle Scholar
  47. Neslin, S. A.; Shankar, V. (2009): Key issues in multichannel customer management: current knowledge and future directions, in: Journal of Interactive Marketing, Vol. 23, No. 1, pp. 70–81.CrossRefGoogle Scholar
  48. Ping, R. A. (1993): The effects of satisfaction and structural constraints on retailer exiting, voice, loyalty, opportunism, and neglect, in: Journal of Retailing, Vol. 69, No. 3, pp. 320–352.CrossRefGoogle Scholar
  49. Rangan, V. K.; Menezes, M. A. J.; Maier, E. P. (1992): Channel selection for new industrial products: a framework, method, and application, in: The Journal of Marketing, Vol. 56, No. 3, pp. 69–82.CrossRefGoogle Scholar
  50. Rosenbloom, B. (2007): Multi-channel strategy in business-to-business markets: Prospects and problems, in: Industrial Marketing Management Journal, Vol. 18, No. 4, pp. 1–20.Google Scholar
  51. Schlosser, A. E.; White, T. B.; Lloyd, S. M. (2006): Converting web site visitors into buyers: how web site investment increases consumer trusting beliefs and online purchase intentions, in: The Journal of Marketing, Vol. 70, No. 2, pp. 133–148.CrossRefGoogle Scholar
  52. Schramm-Klein, H. (2010): Integrated Retail Channels in Multichannel Retailing: Do Linkages between Retail Channels Impact Customer Loyalty?, in: European Retail Research, Vol. 24, No. 2, pp. 111–128.Google Scholar
  53. Schwarz, G. M.; Shulman, A. D. (2007): The patterning of limited structural change, in: Journal of Organizational Change Management, Vol. 20, No. 6, pp. 829–846.CrossRefGoogle Scholar
  54. Shapiro, C.; Varian, H. R. (1999): Information Rules: a Strategic Guide to the Network Economy, Boston, MA.Google Scholar
  55. Sitkin, S. B.; Weingart, L. R. (1995): Determinants of risky decision-making behavior: a test of the mediating role of risk perceptions and propensity, in: The Academy of Management Journal, Vol. 38, No. 6, pp. 1573–1592.CrossRefGoogle Scholar
  56. Teece, D. J.; Pisano, G.; Shuen, A. (1997): Dynamic capabilities and strategic management, in: Strategic Management Journal, Vol. 18, No. 7, pp. 509–533.CrossRefGoogle Scholar
  57. Thomas, J. S. (2001): A methodology for linking customer acquisition to customer retention, in: Journal of Marketing Research, Vol. 38, No. 2, pp. 262–268.CrossRefGoogle Scholar
  58. Thomas, J. S.; Sullivan, U. Y. (2005): Managing marketing communications with multichannel customers, in: Journal of Marketing, Vol. 69, No. 4, pp. 239–251.CrossRefGoogle Scholar
  59. Tushman, M. L.; O'Reilly, C. A. (2006): Ambidextrous Organizations: Managing Evolutionary and Revolutionary Change, in: Managing Innovation and Change, London, pp. 170–184.Google Scholar
  60. Van Bruggen, G. H.; Antia, K. D.; Jap, S. D.; Reinartz, W. J.; Pallas, F. (2010): Managing marketing channel multiplicity, in: Journal of Service Research, Vol. 13, No. 3, pp. 331–340.CrossRefGoogle Scholar
  61. Van Nierop, J. E. M.; Leeflang, P. S. H.; Teerling, M. L.; Huizingh, K. R. E. (2011): The impact of the introduction and use of an informational website on offline customer buying behavior, in: International Journal of Research in Marketing, Vol. 56, No. 2, pp. 155–165.CrossRefGoogle Scholar
  62. Venkatraman, N. (1989): The concept of fit in strategy research: toward verbal and statistical correspondence, in: The Academy of Management Review, Vol. 14, No. 3, pp. 423–444.Google Scholar
  63. Verhoef, P. C.; Donkers, B. (2005): The effect of acquisition channels on customer loyalty and cross-buying, in: Journal of Interactive Marketing, Vol. 19, No. 2, pp. 31–43.CrossRefGoogle Scholar
  64. Verhoef, P. C.; Neslin, S. A.; Vroomen, B. (2007): Multichannel customer management: understanding the research-shopper phenomenon, in: International Journal of Research in Marketing, Vol. 24, No. 2, pp. 129–148.CrossRefGoogle Scholar
  65. Vinhas, A. S.; Anderson, E. (2005): How potential conflict drives channel structure: concurrent (direct and indirect) channels, in: Journal of Marketing Research, Vol. 42, No. 4, pp. 507–515.CrossRefGoogle Scholar
  66. Walker, H. J.; Armenakis, A. A.; Bernerth, J. B. (2007): Factors influencing organizational change efforts: an integrative investigation of change content, context, process and individual differences, in: Journal of Organizational Change Management, Vol. 20, No. 6, pp. 761–773.CrossRefGoogle Scholar
  67. Wallace, D. W.; Giese, J. L.; Johnson, J. L. (2004): Customer retailer loyalty in the context of multiple channel strategies, in: Journal of Retailing, Vol. 80, No. 4, pp. 249–263.CrossRefGoogle Scholar
  68. Webb. K. L.; Hogan, J. E. (2002): Hybrid channel conflict: causes and effects on channel performance, in: journal of Business & Industrial Marketing, Vol. 17, No. 5, pp. 228–256.CrossRefGoogle Scholar
  69. Wheeler, S.; Hirsh, E. (1999): Channel champions: how leading companies build new strategies to serve customers, San Francisco, CA.Google Scholar
  70. Zahra, S. A.; Hayton, J. C.; Neubaum, D. O.; Dibrell, C.; Craig, J. (2008): Culture of family commitment and strategic flexibility: the moderating effect of stewardship, in: Entrepreneurship Theory and Practice, Vol. 32, No. 6, pp. 1035–1054.CrossRefGoogle Scholar
  71. Zhang, J.; Farris, P. W.; Irvin, J. W.; Kushwaha, T.; Steenburgh, T. J.; Weitz, B. A. (2010): Crafting Integrated Multichannel Retailing Strategies, in: Journal of Interactive Marketing, Vol. 24, No. 2, pp. 168–180.CrossRefGoogle Scholar

Copyright information

© Gabler Verlag | Springer Fachmedien Wiesbaden 2012

Authors and Affiliations

  • Jochen Binder
    • 1
  • Dennis Herhausen
    • 1
    Email author
  • Nicolas Pernet
    • 2
  • Marcus Schögel
    • 1
  1. 1.Institute of MarketingUniversity of St. GallenSt. GallenSwitzerland
  2. 2.Ringier AGZürichSwitzerland

Personalised recommendations