Column 13 · Channels and Governance · Era 2, Planning (1970s)
Channel Power
Implementation, process · Major · Cluster V, Interfirm Networks
Description
El-Ansary and Stern measured power in a distribution channel as one member's ability to control another's marketing decision variables, and Hunt and Nevin showed that coercive and noncoercive sources of power have different consequences for franchisee satisfaction.
Managerial Implications
Power in a channel comes from what partners depend on you for: volume, brand pull, expertise, or exclusivity. Coercive use of power, through threats and penalties, produces compliance and resentment; noncoercive power, through assistance and rewards, produces cooperation. Know your dependence on each partner and theirs on you before negotiating, and invest in sources of power that partners value rather than fear.