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New product distribution and inter-channel competition: market-making, market-taking and competitive effects in several European countries (RV of 2007/35/MKT)

Author: Gatignon, Hubert ; Anderson, Erin ; Lajos, JosephINSEAD Area: Marketing Series: Working Paper ; 2007/64/MKT Publisher: Fontainebleau : INSEAD, 2007.Language: EnglishDescription: 31 p.Type of document: INSEAD Working Paper Online Access: Click here Abstract: We 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. We find evidence that channels were market-takers (i.e., that sales significantly increased contemporaneous distribution coverage) in all five countries. Furthermore, we find that channels were market-makers (i.e., that distribution coverage significantly increased contemporaneous sales) in two of these countries. Thus, we show that market-making and market-taking can occur simultaneously over extended periods of time within a risky, durable product category. We 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. Previous title: New product distribution and inter-channel competition: market-making, market-taking, and competitive effects in several European countries - Gatignon, Hubert;Anderson, Erin;Lajos, J - 2007 - INSEAD Working Paper
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We 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. We find evidence that channels were market-takers (i.e., that sales significantly increased contemporaneous distribution coverage) in all five countries. Furthermore, we find that channels were market-makers (i.e., that distribution coverage significantly increased contemporaneous sales) in two of these countries. Thus, we show that market-making and market-taking can occur simultaneously over extended periods of time within a risky, durable product category. We 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.

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