Content area
Full Text
Keywords
Consumer behaviour, Marketing, Distribution channel
Abstract
With the phenomenal growth of direct order marketing with the Internet and catalogs as alternative channels, customers increasingly face more choices of where to purchase goods and services. This paper develops a formal consumer model to explain channel switching behavior. Becker's theory of time allocation is expanded to consumer decision making between distribution channels. The final model suggests that consumers face a tradeoff when deciding where to buy goods and services. From this tradeoff an indifference curve is developed where the consumer chooses between alternative distribution channels on the basis of the relative opportunity costs of time, costs of goods, pleasure derived from shopping, perceived value of goods, and relative risk of each channel. Strategies for direct and multi-channel marketers are developed using this model.
Electronic access
The research register for this journal is available at
http://www.emeraldinsight.com/researchregisters
The current issue and full text archive of this journal is available at
http://www.emeraidinsightcom/0959-0552.htm
Introduction
According to the Direct Marketing Association, consumer direct order marketing sales are growing faster than overall US consumer sales. From 1995 to 2000, these sales increased by 9.1 percent annually (compared to 5.5 percent overall), with an 8.3 percent annual growth expected through 2005 (compared to 4.1 percent overall). With direct mail (including catalogs) leading the media for direct order sales (34.8 percent), interactive sales (including Internet) are forecast at $24.2 billion in 2000 and are projected to increase 41.3 percent per year to reach $36.4 billion by 2005 (Direct Marketing Association, 2001).
Many have attributed this continuing growth in direct order marketing to its relative time savings and convenience compared to traditional retailing channels (Darian, 1987; Eastlick and Feinberg, 1994; Gehrt et al., 1996; Lavin, 1993). More specifically, recent industry studies have focused on the use of alternative distribution channels and found an increasing use of the Internet as a communication channel for information and comparison shopping, and as a distribution channel for online purchasing (NPD Group, Inc., 2001; NRF 2000).
Although there is a large body of research investigating consumers' store patronage behavior, there has been a lack of theoretical development to adequately explain consumers' channel-switching behavior between traditional store and direct order marketing channels (Darian 1987; Gehrt...