The HP Printer Web Channel Distribution Channel Strategy L. P. Bucklin Spring 2000

The Extent of Ill Will Engendered Degree of overlap among web and B&M channel services and customer segments The potential for shoppers at a B&M channel to turn and buy on a web site The extent to which independent web sites are already actively in place Perceptions of supplier fairness in dealing with independent channel members versus their own channel

Propensity of B&M Reaction Market importance of the supplier’s brand Number of alternative suppliers or the potential for substitution through private label Scale of the individual B&M channel members or their degree of cooperative action Customer reliance upon personal service

Supplier Market Position Perceived degree of strategic potential for the web channel as a means of gaining share Ability to access the web channel through third party intermediaries Expected eventual market share of the web channel, with or without price discrimination Ability to withstand defection of B&M channel members until web channel sales achieve parity Presence of related products that may be harmed by disaffected resellers

Generalizations Early adopters of new channels typically have a lower investment in traditional channels The greater the supplier’s brand power, the stronger is its capability to initiate a dual channel The greater the ability of the supplier to separate markets for multiple channels, the more successful is their implementation The greater the use of a dual channel for unprotected, price discrimination, the greater is the potential for the failure of the strategy