The structure of reseller goals and performance in marketing channels

The typical view of a marketing channel is that of a manufacturer-designed and -controlled distribution system. However, today, marketing functions, as well as market power are more evenly distributed in the channel. In organizing and managing the modem channel, it is important to understand the business circumstances and priorities confronting channel members. This article studies how re-seller firms establish their goal hierarchies and how these goals are related to performance. It hypothesizes that goal priorities emerge in relation to the environmental imperatives faced by the firm. The article develops hypotheses that are tested on survey data collected from a sample of franchisee firms, using structural equation models. The results support all the hypotheses about the effects of primary goals on performance. The effects of secondary goals are not unequivocal but informative nevertheless. Overall, the study points to interesting theoretical and managerial conclusions.