The role of program fairness in asymmetrical channel relationships

Flora F. Gu*, Danny T WANG

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

21 Citations (Scopus)

Abstract

Managing distributor compliance with manufacturer-initiated programs is critical to both program success and relationship enhancement. This study examines how a manufacturer might better motivate distributors with varying levels of dependence. Previous research suggests that two variables influence distributor compliance: economic incentives and dependence dynamics. Drawing from fairness heuristic theory, this study extends previous research by investigating the role of fairness in affecting compliance and long-term relationships. The authors observe the contingent effect of fairness along various levels of distributor dependence. In the context of a naturally occurring program, the authors collect data from a focal manufacturer's distribution channel and find that (1) fairness perceptions have significant impacts on both compliance and relational outcomes, (2) the efficacy of program fairness declines as distributor dependence increases, and (3) distributor dependence increases the effect of economic incentives on compliance. The authors discuss the theoretical and managerial implications of these findings.

Original languageEnglish
Pages (from-to)1368-1376
Number of pages9
JournalIndustrial Marketing Management
Volume40
Issue number8
DOIs
Publication statusPublished - Nov 2011

Scopus Subject Areas

  • Marketing

User-Defined Keywords

  • Channel relationship
  • Fairness heuristic theory
  • Joint sales program

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