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Channel Coordination Mechanisms for Customer Satisfaction

Publication ,  Journal Article
Chu, W; Desai, PS
Published in: Marketing Science
November 1995

We consider two broad categories of incentives by which a manufacturer can motivate its retailers to provide high customer satisfaction: (1) manufacturer assistance that reduces the retailer's cost of providing customer satisfaction (CS assistance); and (2) customer satisfaction index (CSI) bonus. We show that if a retailer has a long-term orientation, CS assistance is a more effective coordination mechanism that induces the retailer to expend more effort at customer satisfaction. However, if the retailer has a short-term orientation, CSI bonus is a more effective coordination mechanism. We then show that a long-term oriented retailer is more valuable to a manufacturer than a short-term oriented one. Finally, we show that the use of CS incentives results in greater profits for both the manufacturer and the retailer.

Duke Scholars

Published In

Marketing Science

DOI

EISSN

1526-548X

ISSN

0732-2399

Publication Date

November 1995

Volume

14

Issue

4

Start / End Page

343 / 359

Publisher

Institute for Operations Research and the Management Sciences (INFORMS)

Related Subject Headings

  • Marketing
  • 1505 Marketing
 

Citation

APA
Chicago
ICMJE
MLA
NLM
Chu, W., & Desai, P. S. (1995). Channel Coordination Mechanisms for Customer Satisfaction. Marketing Science, 14(4), 343–359. https://doi.org/10.1287/mksc.14.4.343
Chu, Wujin, and Preyas S. Desai. “Channel Coordination Mechanisms for Customer Satisfaction.” Marketing Science 14, no. 4 (November 1995): 343–59. https://doi.org/10.1287/mksc.14.4.343.
Chu W, Desai PS. Channel Coordination Mechanisms for Customer Satisfaction. Marketing Science. 1995 Nov;14(4):343–59.
Chu, Wujin, and Preyas S. Desai. “Channel Coordination Mechanisms for Customer Satisfaction.” Marketing Science, vol. 14, no. 4, Institute for Operations Research and the Management Sciences (INFORMS), Nov. 1995, pp. 343–59. Crossref, doi:10.1287/mksc.14.4.343.
Chu W, Desai PS. Channel Coordination Mechanisms for Customer Satisfaction. Marketing Science. Institute for Operations Research and the Management Sciences (INFORMS); 1995 Nov;14(4):343–359.

Published In

Marketing Science

DOI

EISSN

1526-548X

ISSN

0732-2399

Publication Date

November 1995

Volume

14

Issue

4

Start / End Page

343 / 359

Publisher

Institute for Operations Research and the Management Sciences (INFORMS)

Related Subject Headings

  • Marketing
  • 1505 Marketing