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New Product Distribution and Inter-Channel Competition: Market-Making, Market-Taking, and Competitive Effects in Several European Countries (Revision 1 )

Working Paper
The authors use a simultaneous equation model to examine sales and distribution coverage of two brands of a new consumer durable in competing channels of distribution in five European countries. The authors find evidence that channels were market-takers (i.e., that sales significantly increased contemporaneous distribution coverage) in all five countries. Furthermore, the authors find that channels were market-makers (i.e., that distribution coverage significantly increased contemporaneous sales) in two of these countries. Thus, the authors show that market-making and market-taking can occur simultaneously over extended periods of time within a risky, durable product category. The authors also examine the particular influence that sales and distribution coverage in all-under-one-roof value stores (hypermarkets) and in large specialist stores may have on sales and coverage in other channels.
Faculty

Emeritus Professor of Marketing