An analytic decision making framework to evaluate multiple marketing channels

Abstract Marketing channel evaluation is a crucial and complex task. Although empirical studies have made efforts to identify key constructs, no models have been developed to comprehensively assess the viability of different marketing channels for business. With this research, we propose an analytic decision-making framework for multi-channel evaluation. We first develop an analytic network, based on the inputs of managers and literature, to depict the interrelationships between decision criteria. Multi-Criteria Decision Making methods are then adapted to determine the weight of each evaluation criterion and to rank the practicality of alternative marketing channels. The model is tested with Cisco China. Sensitivity analysis is conducted in order to understand the impact of criteria uncertainties on channel rankings and the robustness of the proposed model. The management at Cisco found the model to be transparent, logical, practical, and it provided a valid and reliable guide for evaluating channel alternatives.

[1]  Thomas L. Saaty,et al.  Decision making with dependence and feedback : the analytic network process : the organization and prioritization of complexity , 1996 .

[2]  Peter J. LaPlaca,et al.  INDUSTRIAL MARKETING MANAGEMENT , 2011 .

[3]  Robert W. Palmatier,et al.  Poisoning Relationships: Perceived Unfairness in Channels of Distribution , 2011 .

[4]  Stephen K. Kim,et al.  Relational behaviors in marketing channel relationships: Transaction cost implications , 2007 .

[5]  Susan Sprecher,et al.  The relation between inequity and emotions in close relationships , 1986 .

[6]  Elliot Rabinovich,et al.  Internet book retailing and supply chain management: an analytical study of inventory location speculation and postponement , 2005 .

[7]  Gary L. Frazier,et al.  The Moderating Influence of Firm Market Power on the Transaction Cost Economics Model: An Empirical Test in a Forward Channel Integration Context , 2006 .

[8]  Yi Peng,et al.  Ensemble of Software Defect Predictors: an AHP-Based Evaluation Method , 2011, Int. J. Inf. Technol. Decis. Mak..

[9]  David H. Gustafson,et al.  Group Techniques for Program Planning: A Guide to Nominal Group and Delphi Processes , 1976 .

[10]  Yadong Luo,et al.  Relationship Investment and Channel Performance: An Analysis of Mediating Forces , 2009 .

[11]  David L. Olson,et al.  Comparison of weights in TOPSIS models , 2004, Math. Comput. Model..

[12]  Gang Kou,et al.  Questionnaire design improvement and missing item scores estimation for rapid and efficient decision making , 2012, Ann. Oper. Res..

[13]  Wen-Hsien Tsai,et al.  Will eChannel additions increase the financial performance of the firm?—The evidence from Taiwan , 2007 .

[14]  Jo van Nunen,et al.  E-fulfillment and multi-channel distribution - A review , 2006, Eur. J. Oper. Res..

[15]  E. Fehr,et al.  Fairness and Retaliation: The Economics of Reciprocity , 2000, SSRN Electronic Journal.

[16]  Thomas L. Saaty,et al.  Marketing Applications of the Analytic Hierarchy Process , 1980 .

[17]  B WhinstonAndrew,et al.  Do online reviews matter? - An empirical investigation of panel data , 2008 .

[18]  J. Michael Tarn,et al.  E‐fulfillment: the strategy and operational requirements , 2003 .

[19]  James R. Brown,et al.  Managing Marketing Channel Opportunism: The Efficacy of Alternative Governance Mechanisms , 2000 .

[20]  Mikko Punakivi,et al.  Developing Cost-effective Operations for the e-Grocery Supply Chain , 2002 .

[21]  Evert Gummesson,et al.  Total Relationship Marketing , 1999 .

[22]  Arvind Rangaswamy,et al.  Opportunities and challenges in multichannel marketing: An introduction to the special issue , 2005 .

[23]  Yuan-Chun Jiang,et al.  Optimizing E-tailer Profits and Customer Savings: Pricing Multistage Customized Online Bundles , 2011, Mark. Sci..

[24]  Armin Scholl,et al.  Solving multiattribute design problems with analytic hierarchy process and conjoint analysis: An empirical comparison , 2005, Eur. J. Oper. Res..

[25]  Pinar Keskinocak,et al.  Dynamic pricing in the presence of inventory considerations: research overview, current practices, and future directions , 2003, IEEE Engineering Management Review.

[26]  Berend Wierenga,et al.  Virtual communities: A marketing perspective , 2009, Decis. Support Syst..

[27]  Stephen C. Graves,et al.  Benefits of Reevaluating Real-Time Order Fulfillment Decisions , 2009, Manuf. Serv. Oper. Manag..

[28]  Raffaello Seri,et al.  The Analytic Hierarchy Process and the Theory of Measurement , 2010, Manag. Sci..

[29]  Greg Linden,et al.  Amazon . com Recommendations Item-to-Item Collaborative Filtering , 2001 .

[30]  Judith M. Whipple,et al.  Relationship Quality and Performance Outcomes: Achieving a Sustainable Competitive Advantage , 2011 .

[31]  Yi Peng,et al.  FAMCDM: A fusion approach of MCDM methods to rank multiclass classification algorithms , 2011 .

[32]  William L. Moore,et al.  A Comparison of Conjoint Methods When There Are Many Attributes , 1999 .

[33]  Paolo Leon The Economic Institutions of Capitalism , 1986, The Antitrust Bulletin.

[34]  A. Mehrotra,et al.  Choosing an optimal channel mix in multichannel environments , 2007 .

[35]  Lotfi A. Zadeh,et al.  Toward a generalized theory of uncertainty (GTU) - an outline , 2005, GrC.

[36]  M. Bhatt Service Management and Marketing , 2011 .

[37]  T. Offerman Hurting hurts more than helping helps , 2002 .

[38]  M. Bohanec,et al.  The Analytic Hierarchy Process , 2004 .

[39]  W. Dugger The Economic Institutions of Capitalism , 1987 .

[40]  Dilip Chhajed,et al.  Direct Marketing, Indirect Profits: A Strategic Analysis of Dual - Channel Supply - Chain Design , 2003, Manag. Sci..

[41]  G. Day Closing the Marketing Capabilities Gap , 2011 .

[42]  Arun Sharma,et al.  Mature relationships: Why does relational orientation turn into transaction orientation? , 2003 .

[43]  M. Dekimpe,et al.  Evaluating Channel Performance in Multi-Channel Environments , 2007 .

[44]  Tim Hughes,et al.  New channels/old channels: Customer management and multi‐channels , 2006 .

[45]  Filipe Coelho,et al.  A model of the antecedents of multiple channel usage , 2008 .

[46]  Christopher S. Tang,et al.  Production, Manufacturing and Logistics A model for analyzing multi-channel distribution systems , 2005 .

[47]  P. Panayides The impact of organizational learning on relationship orientation, logistics service effectiveness and performance , 2007 .

[48]  Ching-Lai Hwang,et al.  Fuzzy Multiple Attribute Decision Making - Methods and Applications , 1992, Lecture Notes in Economics and Mathematical Systems.

[49]  James A. Narus,et al.  A Model of Distributor Firm and Manufacturer Firm Working Partnerships , 1990 .

[50]  M. Etzel,et al.  The structure of reseller goals and performance in marketing channels , 2003 .

[51]  GuoJun,et al.  Rank B2C e-commerce websites in e-alliance based on AHP and fuzzy TOPSIS , 2011 .

[52]  Ping Josephine,et al.  The Benefits of Re-Evaluating the Real-Time Fulfillment Decisions , 2006 .

[53]  Gary L. Frazier,et al.  The Use of Influence Strategies in Interfirm Relationships in Industrial Product Channels , 1991 .

[54]  Barton A. Weitz,et al.  Forward Integration into Distribution: An Empirical Test of Transaction Cost Analysis , 1988 .

[55]  Hsin-Pin Fu,et al.  The impact of market freedom on the adoption of third-party electronic marketplaces: A fuzzy AHP analysis , 2008 .

[56]  Sertan Kabadayi Choosing the right multiple channel system to minimize transaction costs , 2011 .

[57]  Chuangxia Huang,et al.  Dynamics Analysis of a Class of Delayed Economic Model , 2013 .

[58]  Thomas L. Saaty,et al.  Diagnosis with Dependent Symptoms: Bayes Theorem and the Analytic Hierarchy Process , 1998, Oper. Res..

[59]  Jan B. Heide,et al.  Opportunism in Interfirm Relationships: Forms, Outcomes, and Solutions , 2000 .

[60]  Gwo-Hshiung Tzeng,et al.  Compromise solution by MCDM methods: A comparative analysis of VIKOR and TOPSIS , 2004, Eur. J. Oper. Res..

[61]  Kaung-Hwa Chen,et al.  What kind of marketing distribution mix can maximize revenues: The wholesaler travel agencies' perspective? , 2009 .

[62]  Marina Bosch,et al.  Fuzzy Multiple Attribute Decision Making Methods And Applications , 2016 .

[63]  Michael J. Valos,et al.  A qualitative study of multi-channel marketing performance measurement issues , 2008 .

[64]  Paolo Guenzi,et al.  Relational selling strategy and key account managers' relational behaviors: An exploratory study , 2007 .

[65]  D. Chang Applications of the extent analysis method on fuzzy AHP , 1996 .

[66]  Peter Vitartas,et al.  The future of relationship marketing , 2007 .

[67]  R. Armacost,et al.  Identification of determinant attributes using the analytic hierarchy process , 1994 .

[68]  Jan B. Heide,et al.  Controlling Supplier Opportunism in Industrial Relationships , 1996 .

[69]  Gang Kou,et al.  A simple method to improve the consistency ratio of the pair-wise comparison matrix in ANP , 2011, Eur. J. Oper. Res..

[70]  Bert Rosenbloom,et al.  Multi-channel strategy in business-to-business markets: Prospects and problems , 2007 .

[71]  D. Dubois,et al.  Operations on fuzzy numbers , 1978 .

[72]  Gary L. Frazier Organizing and managing channels of distribution , 1999 .

[73]  Reinhold Decker,et al.  Measuring Consumer Preferences for Complex Products: A Compositional Approach BasedonPaired Comparisons , 2010 .

[74]  Barton A. Weitz,et al.  Relationship marketing and distribution channels , 1995 .

[75]  Nils Rudi,et al.  SHOULD YOU TAKE THE VIRTUAL FULFILLMENT PATH , 2002 .

[76]  R. T. Moriarty,et al.  Managing hybrid marketing systems. , 1990, Harvard business review.