Channel Coordination Mechanisms for Customer Satisfaction
Name
Imvp094a.pdf
Size
2.36 MB
Format
Adobe PDF
Checksum (MD5)
d4aea57add89296ef906d47e012be993
Author(s)
Chu, Wujin
Desai, Preyas S.
Date Issued
1995
Series/Report no.
Marketing Science;Vol. 14, No. 4
Abstract
We consider two broad categories of incentives by which a manufacturer can motivate its retailers to provide high customer satisfaction: 1) manufacturer assistance that reduces the retailer's cost of providing customer satisfaction (CS assistance); and 2) customer satisfaction index (CSI) bonus. We show that if a retailer has a long-term orientation, CS assistance is a more effective coordination mechanism that induces the retailer to expend more effort at customer satisfaction. However if the retailer has a short-term orientation, CSI bonus is a more effective coordination mechanism. We then show that a long-term retailed is more valuable to a manufacturer than a short-term oriented one. Finally, we show that the use of CSI incentives results in greater profits for both the manufacturer and the retailer.
Subjects
customer satisfaction index
short-term orientation
channel distribution
CSI
long-term orientation
Game Theory
Persistent DSpace Link
