Network governance in marketing channels

Nathalie Guibert

12 citations0/0 files storedBritish Food Journal

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Wine Industry and Tourism Supply Chain and Inventory Management Business Strategy and Innovation

Abstract

Purpose This paper sets out to investigate the view that a firm's strategy in a marketing channel is contingent on the organization of its related upstream network of embeddedness. Design/methodology/approach An in‐depth documentary study of recent developments in marketing channels in the French Rhône Valley Appellation d'Origine Controlée wine industry combined with content analysis of qualitative data derived from interviews with local wine merchants and Inter‐Rhône wine experts. Findings The extended theoretical framework used in this case study enables researchers to more completely specify channel members' behavior. By taking into account not only general objectives but also legitimacy concerns of this type of organizations, it is possible to identify reputation and institutional commitment management in the upstream network as two governance mechanisms of equal importance to the mechanisms of vertical integration or management of relationships with suppliers. Research limitations/implications This study suggests the need for further research into external validity and measurement issues. Practical implications The study highlights the necessary governance mechanisms wine merchants have to deploy in their upper professional and supply networks in order to enhance their market performance. Successful positioning strategies seem to be more and more dependent on the wine merchants' ability to acquire a strong position and recognition in its upstream networks: only those who have taken into account the legitimacy issue and have deployed mechanisms to govern it effectively will survive the current internationalisation processes and avoid market decline. Originality/value This more nuanced channel approach offers a number of empirical illustrations to support the tri‐dimensional conceptualization of institutional environment suggested by Grewal and Ravi in 2002.

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References

1985Economic Action and Social Structure: The Problem of Embeddedness 1994The Commitment-Trust Theory of Relationship Marketing 1995Managing Legitimacy: Strategic and Institutional Approaches 1967The Social Construction of Reality: A Treatise in the Sociology of Knowledge.2011External Control of Organizations: Resource Dependence Perspective 1991Comparative Economic Organization: The Analysis of Discrete Structural Alternatives 1992The Use of Pledges to Build and Sustain Commitment in Distribution Channels 1985The Second Industrial Divide

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