In this chapter, the authors unpack the use of multiple channels to market a given product or service from the manufacturer’s point of view. They briefly review transaction cost logic regarding safeguarding specific investments, promoting adaptation, and mitigating the under-supply of activities lacking good output measures as the drivers of governance forms in a channel. Then, they develop and extend this logic to incorporate three key forms of heterogeneity – namely, firm, outlet, and customer pathways as well as synergies between different governance forms.
George John, Madhu Viswanathan and Mrinal Ghosh
Mrinal Ghosh, Kellilynn M. Frias and Robert F. Lusch
In this chapter the authors introduce a question of significant import to marketing managers: Where should their firm locate their offerings in the value chain? We term this concept as product-form strategies and using the service-dominant logic aver that the four principal product-form strategies, viz. sell intellectual know-how, sell intermediate components, sell final goods, or sell service solutions derived from the goods, are alternative ways in which firms can offer service to end-users. The authors first illustrate these product-form alternatives through a variety of examples and then draw on the literature in service-dominant logic and organizational economics to develop a framework that suggests the key underlying mechanisms that determine when and why firms choose one alternative product-form over another. Finally, the authors provide insights on how these choices impact marketing decisions throughout the value chain.