Technology in Marketing Channels

International Journal of Applied Behavioral Economics, 1(2), 41-51, April-June 2012 41 Technology in Marketing Channels: Present and Future Drivers of Innovation Fabio Musso, University of Urbino, Italy ABSTRACT The paper analyses the contribution of technological innovations to improve the relations and interactions among all members of marketing channels and those with the end consumer. The analysis focuses on marketing channel as a whole, aiming at providing a conceptual framework for future investigations and insights that can be conducted to capture the extent and effects of the changes in technology. The technological perspective of innovation is analyzed by taking into account all types of channels, not just those at the retail distribution level. This perspective can be divided into an area of innovation in vertical relationships between channel members and an area of innovation in relationships with inal demand. The main fronts of innovation in vertical relations between irms are: logistics, the joint management of supplying activities, and those joint activities with a high level of integration among partners, such as Vendor Managed Category Management. As regard to relationships with inal demand main innovation ields are: checkout technologies, electronic and mobile payments, distance and on-line selling, and self-service technologies. Keywords: Business Management, Marketing Channels, POS, Self-Service Technologies, Technological Innovation, Vertical Marketing Systems MARKETING CHANNELS Marketing channel can be seen as a vertically integrated, uni-linear structure linking the retailer with the manufacturer through a series of intermediary wholesalers (Davies, 1977). Actually, this is no longer an appropriate conceptualisation for the structure of distribution channels in the retailing systems of more advanced countries. In these countries, power relations between channel members have been fundamentally changed by the actions of the manufacturers and large retailers in extending, DOI: 10.4018/ijabe.2012040104 through vertical integration, the scope of their activities, particularly at the expense of wholesaler intermediaries (Dawson, 1979). Marketing channels have also been defined as Vertical Marketing Systems (VMS) (McCammon, 1970), in the cases where a co-ordinating leader emerges. A VMS is a formally or informally coordinated distribution channel where its independent members work together to achieve greater efficiency and economies of scale. The VMS eliminates the channel conflict arising from disparate individual objectives. Three major types of VMS have been identified, and each uses a different means for setting up leadership and power in the system: (1) administered, Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 42 International Journal of Applied Behavioral Economics, 1(2), 41-51, April-June 2012 where leadership is assumed by one dominant member that is large and powerful enough to coordinate the activities of the other members without an ownership stake; (2) contractual, where coordination and conflict management are attained through contractual agreements among the members of the system; and (3) corporate, where coordination and conflict management are attained by common ownership. In more recent years, the context of globalization in which market channel structures and strategies are developing (Rosenbloom & Larsen, 2008) is bringing to a more complex concept of marketing channels, with disintermediation/reintermediation, multichanneling and new roles/specializations that are emerging as new issues. Moreover, the increasing search for efficiency and speed in vertical relationships, is leading to a convergence of perspectives for those channel related activities like supply chain management, logistics and purchasing (Gundlach, Bolumole, & Frankel, 2006). In this context, innovation in marketing channels becomes a complex, multiorganizational, multidisciplinary activity that requires collaboration and interactions across various entities within the supply chain network, with a substantial portion of the innovation process and resulting outcomes that occur at the buyerseller interface level (Ganesan, George, Jap, Palmatier, & Weitz, 2009). This work aims to analyze innovation in marketing channels focusing on the technological issues that can affect its structure and flows. The analysis aims to provide a conceptual framework on the basis of which future investigations and insights can be conducted to capture the extent and effects of the changes that occur, as a result of technological innovation. INNOVATION IN MARKETING CHANNELS In the existing literature, innovation in marketing channels has been treated in reference to specific areas of innovation or to single categories of subjects within channels. Fewer studies have been conducted with a perspective referring to the channel as a whole. Major contributions have focused on innovation in retailing as “product innovation” for distribution companies (Dupuis, 2000; Castaldo, 2001), or as innovation in the supply chain. In this case, primary attention has been placed on technological issues, particularly those relating to information and communication technologies (ICT), and the implications that these technologies may entail for marketing channels (Kim, Cavusgil, & Calantone, 2006; Hausman & Stockb, 2003). Referring to marketing channels, the concept of innovation can be viewed in the context of a double layer through which it expresses itself. On the one hand, it can be seen as a strategic activity for both industrial and distribution firms to acquire a competitive advantage along the distribution channel. On the other hand, it could be seen as a changing process of the economic function of the distribution systems. In both cases, innovation comes from the choices of firms along the channel, which increasingly involve their partners, upstream and downstream of the network they belong to. This originates innovations increasingly focused on the vertical network, more than on the individual firms. In recent years, the innovation processes in marketing channels have occurred with high intensity and speed, especially following the changes spurred by technology that allowed the adoption of more efficient organizational solutions. As a consequence, an increased competitiveness for all firms in the channel has emerged. Another factor which has greatly stimulated innovative processes in marketing channels was the process of modernization of the retail sector that in recent decades has progressively strengthened and enriched the role of retailers. Even the social changes and new behavioural patterns of the final demand, have stimulated innovations designed to accommodate new values concerning consumer goods and their distribution systems (e.g., traceability and the compliance with social, ecological and ethical values in the manufacturing processes). Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Applied Behavioral Economics, 1(2), 41-51, April-June 2012 43 These influencing factors have been active in a context of strong emphasis on competitive dynamics, both at the horizontal level (between manufacturers and between retailers) and the vertical level. Such dynamics have occurred with the development of private label products, the emergence of retailing marketing, the increasing downstream integration by manufacturers (e.g., manufacturer-owned retail stores and factory outlets) and, conversely, the upstream integration of the retailers supply chain. The stimulus to innovation in distribution channels has been distinguished as technology based, with reference to the opportunities offered by innovation in information and communication technologies (ICT), and market-based (Castaldo, 2001). Market based factors may, in turn, be distinguished in demand-based factors, related to changes in the characteristics and behaviours of customers that companies seek to comply with (Kaufman-Scarborough & Forsythe, 2009), and competition based factors, with specific reference to a differentiation and quick response to the final demand changes approach. Often times, this logic is based on the principles of time-based competition (Hum & Sim, 1996), emphasizing the value of the time variable in pursuing a competitive advantage, and planning marketing policies on a perspective referred to competitors, in some cases more than to the final demand. Innovation in marketing channels can be analysed following three different perspectives (Musso, 2010): 1. 2. 3. A technological perspective, that is, what are the fronts of technological innovation for the optimization of interactions among channel members and with the final demand. A relational perspective, in regard to vertical relationships between firms in a marketing channel. A structural perspective, focused on what new channel configurations may occur. This work will deepen the technological perspective by taking into account all types of channels, not just those at the retail distribution level, and will consider all types of products. Distinct considerations will be developed, where appropriate, among consumer goods, on the one hand, and capital/industrial goods, on the other. The technological perspective can be divided into an area of innovation in vertical relationships between channel members and an area of innovation in relationships with final demand. TECHNOLOGICAL INNOVATION IN VERTICAL RELATIONSHIPS The first technological innovation field in the relationships between firms is that of technology based interaction tools. That is, all the techniques that allow, through the use of ICT technology, to speed up vertical relationships and make them more efficient and without interruptions. It is technological innovation that facilitates the integration of structures, physical flows, and information within the same distribution channel (Tummala, Phillips, & Johnson, 2006). Information technology and telecommunications – the main technologies on which the inter and intra-firm information management process has been built – actually represents the technological platform of Supply Chain Management (SCM) (Closs & Xu, 2000; Porter, 2001). Actually, global SCM is becoming a strategic objective for many companies. In addition, the concept of SCM is becoming fully recognized as a common process to manage innovation and coordination among firms’ networks. A permanent body – the project consortium Efficient Consumer Response (ECR)1 – has been established for this purpose, after being on the negotiating table for several years, where manufacturers and retailers work to search for better cooperation for more efficient supply chains. ECR aims to develop the supply chain as a whole and eliminate non value-added functions. The key elements of ECR are efficient replenishment, efficient assortment, efficient product introduction and efficient promotion. Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 44 International Journal of Applied Behavioral Economics, 1(2), 41-51, April-June 2012 These are the means for facing the major problems in retail stores, namely out-of-stocks and over-stocks (Kotzab, 1999). Trading partners are asked to develop their business processes together in order to increase value for the consumer. The concept is complex and extensive, which makes implementation difficult for companies. To fully adopt ECR, a company should change operations, starting from the strategic level and continuing to marketing, logistics and financial functions (Kaipia & Tanskanen, 2003). There are three levels of cooperation that can be achieved in managing the supply chain. Logistics The first level refers to logistics, with the objective of improving the productivity of physical and information flows by improving the transportation network, the logistics centres management, the non-compliance managing processes, and by the establishment of communication infrastructures such as Electronic Data Interchange (EDI). In regards to logistics, some elements have resulted as changing factors that go beyond a simple technical optimization allowed by developments in information and communication management. More specifically, for innovative relationships within the channel, characterized by the need for greater coordination and integration, logistics can be seen as an interface between strategic and tactical orientations that can sometimes be different or conflicting among the channel partners. To lower the cost of stock management, handling and transports, several organizational solutions have been developed, aimed at making the logistic cycle faster and without errors. These solutions can be developed via third party operators or by the use of transit logistic facilities, according to the cross docking2 technique. The most recent fields in logistic innovation regarding monitoring systems for material movements, both inside and outside the warehouses, relate to Radio-Frequency Identification (RFID). RFID is the use of an object (typically referred to as an RFID tag) applied to a product, or a package, for the purpose of identification and tracking using radio waves. RFID is also used in inventory systems, with relevant potential reductions in out-ofstocks (Hardgrave, Miles, & Mitchell, 2009). Other benefits of using RFID include the reduction of labour costs, the simplification of business processes, and the reduction of inventory inaccuracies. The basic infrastructure for coordinating logistic processes among channel partners is the EDI that has been defined as “tools which permit the automatic exchange of data between remote applications in situations where these belong to different organisations” (Martinez & Polo-Redondo, 2001). The principal attraction that EDI has for companies in marketing channels lies in the large number of references that are exchanged. For large retailers, as well as wholesalers, EDI means a big saving, because they work with a large number of suppliers (and/ or customers) with a great quantity of references, and all this means having to handle a vast amount of documents of different types. Because of this, the re-entering, collation and storing of all this data means an extremely burdensome task which is eliminated with EDI. This is why these are the companies that have promoted the development of EDI in commercial distribution, in many cases forcing small-scale suppliers to adopt this tool. Four groups of variables have influence in the spread of EDI: Network Factors, Innovation Factors, Intra-Organisational Factors, and Inter-Organisational Factors (Martinez & Polo-Redondo, 2001). Joint Management of Supplying Activities The second level of collaboration in supply chain processes is the joint management of supplying activities, through techniques such as Vendor Management Inventory (VMI), which includes assortments decisions, activities for reducing stock-outs, and the use of indicators to control and improve joint processes. Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Applied Behavioral Economics, 1(2), 41-51, April-June 2012 45 VMI is an operating model in which the supplier takes responsibility for the inventory of its customer. In a VMI-partnership the supplier makes the main inventory replenishment decisions for the customer. The supplier, which may be a manufacturer, reseller or a distributor, monitors the buyer’s inventory levels and makes supply decisions regarding order quantities, shipping and timing (Waller, Johnson, & Davis, 1999). For suppliers, the major attraction of VMI is in mitigating demand. Large, infrequent orders from customers force suppliers to maintain inventories that enable them to respond to the uneven demand. In VMI, the supplier is able to smooth the peaks and valleys in the flow of goods, and therefore to keep smaller buffers of capacity and inventory. Usually in VMI the frequency of shipments is increased (Kaipia & Tanskanen, 2003). Buyers need not monitor the supplier performance by the service level provided by the supplier to the buyer. The only meaningful service level is from the retailer to its customers. The supplier’s performance is measured by this service level and by the inventory level at the retailer. Successful VMI implementations in retailing can be found in the apparel industry. However, VMI has not gained large acceptance in the grocery supply chain. Collaborative Planning Forecasting and Replenishment, and Vendor Managed Category Management The third level of collaboration in SCM involves a higher degree of integration, with marked implications for marketing, both in the endcustomer analysis, and the establishment of certain policies (e.g., category management, promotions inside outlets, and shelf space management) through the adoption of methodologies such as Collaborative Planning Forecasting and Replenishment (CPFR) and Vendor Managed Category Management (VMCM). CPFR is a methodology for the joint purchasing management between retailers and their suppliers. It consists of jointly making sales forecasts and procurement schemes, and includes all activities that pertain to the management of assortments, such as promotions and the introduction of new products. The CPFR encourages the sharing of market information and collaborative planning for the establishment and management of optimal assortments. The CPFR is suitable for those product categories that require a high level of promotional activity and that are characterized by significant fluctuations in demand. VMCM is a concept for retail demand fulfillment that combines the ideas of VMI, Category Management and outsourcing. The more frequent application for VMCM is on noncore product categories because the benefits of outsourcing are most obvious: for a retailer, it is expensive to maintain knowledge and skills to manage a minor product category, and the outsourcing risk is at its lowest in a non-core category (Kaipia & Tanskanen, 2003). An additional front of technological innovation in vertical relationships between firms is that of the management of supplies via the Internet, including e-procurement and e-sourcing. It is a front that develops itself at all the previously considered levels of integration. E-procurement covers a wide range of tools that are similar to the tools involved in the use of Internet technology. It covers every possible e-solution adopted, to improve the flexibility and speed of the supply chain, especially the inter and intra-company synchronization. Therefore, e-procurement encompasses all phases of back-end and front-end activities, that are digitized and shared with suppliers (Risso, 2009). E-sourcing is an evolution of e-procurement. It includes all stages of the purchase made via the Internet, including the search for new suppliers, their qualifications and certification, up to the negotiation. Tools for the management of e-procurement and e-sourcing are the electronic marketplaces (e-marketplaces), i.e., electronic platforms facilitating activities related to the transactions and interactions among firms3. E-marketplaces involve a large number of users, so as to reach the Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 46 International Journal of Applied Behavioral Economics, 1(2), 41-51, April-June 2012 critical mass. In the experience of large retailers, to facilitate the achievement of such a critical mass, and above all, improve the performance of the platform, multi-retailer based vertical e-marketplaces are privileged. Among the rules for trading on-line adopted in e-marketplaces are reverse auctions (e-reverse auctions), where the buyer requires a good/service, and providers compete for the contract in a downward price game. Therefore, the relationship of the purchase, by bilateral (one-to-one), becomes multilateral (one-tomany) (Losch & Lambert, 2007). E-Business technological innovations impact the operational design of a channel system by increasing the degree to which the tasks and resources of members need to be integrated. In particular, the proper utilization of software requires the integration of channel operations in terms of greater formalization, standardization, and centralization (Bello, Osmonbekov, Tian, & Gilliland, 2002). TECHNOLOGICAL INNOVATION IN RELATIONS WITH FINAL DEMAND The most important fronts of technological innovation in the relationships with the final consumer are checkout technologies, electronic and mobile payment systems, distance selling (mainly on-line sales), and Self-Service Technologies (SSTs), such as vending machines and multimedia kiosks. Checkout or Point of sales (POS) technologies are applied to locations where a retail transaction occurs. A “checkout” refers to a POS terminal or more generally to the hardware and software used for checkouts, the equivalent of an electronic cash register. A POS terminal manages the selling process by a salesperson accessible interface. Future development of the technology is towards web based POS software that can be run on any computer with an Internet connection and supported browser, without additional software installations or manual updates required. Web based POS software is hosted on secure servers in multiple data centers with real-time backups. With high speed connections becoming more prevalent, web based POS solutions can be more reliable. The benefits of POS technology are in the possibility to better manage inventory, by combining sales data with the amount and cost of the purchases. This enables the firm to analyze the profitability of individual products and manage inventory more accurately and quickly. Moreover, with data on the rate of rotation and the productivity of products, it is possible to optimize product display in the store through the use of specific space management software. In addition to POS technology, electronic shelf label (ESL) systems can be adopted to conduct dynamic pricing policies, that may allow price changes depending on time of day and levels of customer traffic in the store. An ESL system consists of a PC, local wireless communication network and electronic labels (small LCD screens). The system obtains information from the store scanner database, and broadcasts it to the shelf labels. The system continuously monitors the ESLs to ensure that they are present and that they display the correct information (Bergen, Levy, Ray, Rubin, & Zeliger, 2008). ESL systems yield 100% accuracy because the cash register prices are identical to the prices displayed on the ESLs as both are linked to the same database. According to Zbaracki, Ritson, Levy, Dutta, and Bergen (2004), ESL systems are costly to purchase (system price, installation cost, training to employees to use the system) and maintain (continuous upgrade of software and hardware, labels battery replacement, labels replacement after tampering). It has been several years since innovative technologies were being experimented with to make checkout procedures faster and more personnel time saving. The adoption of self-scanning systems, which are currently the most used trials in progress, seems to be only an intermediate solution compared to technologies based on radio frequency transmissions. The spread of these technologies, however, requires that manufacturers apply RFID tags to Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Applied Behavioral Economics, 1(2), 41-51, April-June 2012 47 all individual products. RFID tag data capacity is large enough that each individual tag will have a unique code, while current bar codes are limited to a single type code for a particular product. The uniqueness of RFID tags means that a product may be tracked as it moves from location to location, finally ending up in the consumer’s hands. This may help to combat theft and other forms of product loss. This may also help companies to cope with quality deficiencies and resulting recall campaigns, but also contributes to concern about tracking and profiling of consumers after the sale. Related to POS-scanner technologies are electronic and mobile payment systems that are actually under transition. The extensive use of credit and debit cards for proximity purchases has already demonstrated the possibility of considerably reducing the volume of cash-based transactions. Mobile payments are payments for goods, services, and bills with a mobile device (such as a mobile phone, smart-phone, or personal digital assistant (PDA)) by taking advantage of wireless and other communication technologies (Dahlberg, Mallat, Ondrus, & Zmijewska, 2008). Mobile payment systems are suitable for proximity and micro-payments. This is due to the great opportunity for mobile payments to reduce the number of small purchases paid with cash. Several successful mobile payments systems have already been launched in order to enhance the convenience of micro-payments for local daily expenditures (Ondrus & Pigneur 2006). These solutions have been principally adopted by various quick-service oriented industries such as public transportation, toll booths, gas stations, fast-food restaurants, retail vending machines and ski resort ticketing (Chou, Lee, & Chung, 2004). Payments for physical goods are also possible, both at vending and ticketing machines, and at manned POS terminals. A mobile payment is carried out with a mobile payment instrument such a mobile credit card or a mobile wallet. In addition to pure mobile payment instruments, most electronic and many physical payment instruments have been mobilized. Mobile payments, as all other payments, fall broadly into two categories: payments for daily purchases and payments of bills (credited payments). For purchases, mobile payments complement or compete with cash, cheques, credit cards, and debit cards. For bills, mobile payments typically provide access to accountbased payment instruments such as money transfers, Internet banking payments, direct debit assignments, or electronic invoice acceptance (Ondrus & Pigneur, 2006). Mobile payments have the potential to revolutionize methods of paying products and services. However, given the current situation in Europe it is not very clear whether or not mobile payments are on their way to becoming a standard payment service. In order to classify the different solutions as to have a clearer overview of the market, a classification framework based on a two-by-two matrix can be proposed (Figure 1) (Ondrus & Pigneur, 2006). The payment market can be examined in terms of payment service providers and technology. Payment service providers are typically financial institutions, such as banks and card issuers. In a mobile payment context, mobile network operators (MNOs) are considered to be natural candidates to offer payment services. They form the dominant actors present on the mobile payment market. They can choose to collaborate and cooperate, but also compete (Cells I and II). Other actors such as newcomers and intermediaries can also be serious competitors. They usually offer payment solutions for niche markets with specific needs. However, if they reach a large customer base, they could become a real threat for the dominant actors (Cells III and IV). In the framework, solutions based on the different physical support such as card (Cells I and III) and phone (Cells II and IV) are also separated. Other forms of innovation in relationships with final customers are detectable in distance selling – mainly television (TV), telephone and on-line selling – that represents the evolution of mail order sales. TV sales are revitalizing their innovative role, following technologies Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 48 International Journal of Applied Behavioral Economics, 1(2), 41-51, April-June 2012 Figure 1. Classification matrix (Ondrus & Pigneur, 2006) that make TV communication interactive, making it possible to make purchases directly through the TV. The main innovation potential in distance selling, however, comes from online sales, as part of e-commerce. Online shopping remains a small fraction of retail sales despite the well-known benefits of electronic commerce to consumers, including lower prices (Brynjolfsson & Smith, 2000), greater selection and availability (Ghose, Smith, & Telang, 2006), and greater convenience by eliminating travel costs and enabling purchases irrespective of geographic location. There are many reasons for consumers to slow adoption of online shopping habits: inspecting nondigital products is often difficult, shipping can be slow and expensive, and returning products can be challenging (Forman, Ghose, & Goldfarb, 2009). That is, there appears to be a set of fixed disutility costs of buying online. These costs vary across products and retailers, and in some markets have created significant hurdles to the continued diffusion of electronic commerce. The last face of technological innovation in dealing with the final consumer is that of Self-service technologies (SSTs), based on interacting technologies, like vending machines and multimedia kiosks. With consumers wanting quick and convenient access to competitively priced products, the vending industry has seen a great deal of growth over the last ten years. Vending machines are continually updating with the latest technologies, as well as the variety of products that are being sold. One of the newest vending innovations is telemetry. The advent of reliable, affordable wireless technology has made telemetry practical and provided the medium through which cashless payments can be authenticated. Machines equipped with telemetry can transmit sales and inventory data to a route truck so that the driver knows exactly what products to bring in for restocking. Or the data can be transmitted to a remote headquarters for use in scheduling a route stop, detecting component failure or verifying collection information. Responsive pricing policies (Courty & Pagliero, 2008) in vending machines are also made possible by technology, for example in the case of soft drinks vending machines that are programmed with pricing schemes that vary prices based on consumers’ desire at that moment, depending on outside temperature. New energy technology is also making its way to vending machines in the form of hydrogen fuel-cell machines that run off the grid. Multimedia kiosks, sometimes described as interactive kiosks or public access kiosks, are computer workstations that are designed to provide public access to digital information and e-transactions. They are located in a stylish box with a screen fixed at a level which is convenient for users who stand by the machine Kiosk technology supports public access applications with a highly visible housing for the workstation, and interfaces that are easy to use and often based on touch screens. In retailing and other business environments such as travel, entertainment, advertising, property marketing and building, information kiosks are being used to provide information and services directly to customers. Kiosks are typically located in a store, or in a shopping centre or mall, or in other public environments such as railway stations, motor- Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Applied Behavioral Economics, 1(2), 41-51, April-June 2012 49 way service stations and airports. Yet, whilst web-based e-business has been the subject of much media and academic attention, kiosks are an unobtrusive addition to the landscape of traditional retail outlets (Rowley & Slack, 2003). In such applications, kiosks represent an innovation in in-store communication and promotion. They bring text-based information to life with animation, video, stills, graphics, diagrams, audio and text. Kiosks can provide customers with a richness of product information, including, for instance: related products, stock levels and availability, recipes, special offers, and personalised product design. Some kiosks also have: 1. 2. 3. Card readers, possibly to support payment, Keyboards, for more complex data entry involving say alphabetic strings; keyboards sometimes also incorporate a mouse, and Printers, to print coupons or extracts from a database that represent the response to a query. More sophisticated kiosks can be used as the basis for interaction with customers, part of a loyalty programme, and may offer other opportunities for community building, such as those associated with customer-to-customer communication. Multi-media kiosks have been considered as the marketing organisation’s opportunity to regain control over the ultimate stage (the point-of-purchase decision) in the marketing cycle (Norris, 1994). CONCLUSION This study was aimed at contributing to a vision of technological innovation in marketing channels, which was not limited to the single stages of the channel, and which considered the channel as a whole. The need of this vision comes from the fact that actually most of innovations in marketing channels occur in interaction activities, with effects that can only be assessed with a comprehensive perspective. Indeed, manufacturers, wholesalers, retailers or even customers have become increasingly problematic to be analyzed as separate categories. The roles of retailers and their counterparts seem to have changed when it comes to activities like design of products, price setting, purchasing and manufacturing. Private labels, online marketplaces and the organizing of multiples are three aspects where the roles of manufacturers, wholesalers, retailers and consumers are becoming more blurred. The classification suggested in this work provides a reference point for studying in depth, at an empirical level, the innovation processes that arise from the adoption of new technologies in interactions between channel members and with the end-customer. Some issues that need further study have emerged from this work. The first has to do with the development of technology that offers new opportunities for companies to introduce innovations, both in the offer of distribution services, and in the channel relations or in the relations with the end-consumer. The second issue that requires a more thorough analysis is that regarding the time horizon that should be taken as a reference for innovation analysis. The problem does not arise in the analysis of what happened, but to that of what will happen. Fast developing technologies are opening new views to great changes in regards to the habits and modality of consumption, of purchasing activities, of the interaction between companies, and of time management. These changes will require companies to search for new organizational models, new management of channel relationships, as well as new models of communication. In the face of all this, there is the problem of discriminating between a medium period viewpoint, assuming the current state of the technology “with existing plants,” and a longterm period viewpoint, with very more advanced technologies. This difference, with most companies that are often linked to a short-middle term perspective, is of particular importance for addressing strategic choices, both of manufacturers and retailers. Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 50 International Journal of Applied Behavioral Economics, 1(2), 41-51, April-June 2012 REFERENCES Bello, D. C., Osmonbekov, T., Tian, X. F., & Gilliland, D. (2002). E-business technological innovations. Journal of Marketing Channels, 9(3), 3–25. doi:10.1300/J049v09n03_02 Bergen, M., Levy, D., Ray, S., Rubin, P. H., & Zeliger, B. (2008). When little things mean a lot: On the inefficiency of item pricing laws. The Journal of Law & Economics, 51(2), 209–250. doi:10.1086/589660 Brynjolfsson, E., & Smith, M. (2000). Frictionless commerce? A comparison of Internet and conventional retailers. 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The Review of Economics and Statistics, 86(2), 514–533. doi:10.1162/003465304323031085 ENDNOTES 1 Norris, S. (1994). Flash points. Marketing Week, 1, 47–48. Ondrus, J., & Pigneur, Y. (2006). Towards a holistic analysis of mobile payments: A multiple perspectives approach. Electronic Commerce Research and Applications, 5, 246–257. doi:10.1016/j. elerap.2005.09.003 Porter, M. E. (2001). Strategy and the internet. Harvard Business Review, 79(3), 62–78. Risso, M. (2009). Strategie di approvvigionamento della grande distribuzione e relazioni con i fornitori. Torino, Italy: Giappichelli. 2 Rosenbloom, B., & Larsen, T. (2008). Wholesalers as global marketers. Journal of Marketing Channels, 15(1), 235–252. doi:10.1080/10466690802063879 Rowley, J., & Slack, F. (2003). Kiosks in retailing: The quiet revolution. South Yorkshire, UK: Sheffield Hallam University. Retrieved from http://digitalcommons.shu.ac.uk/ccrc papers/2 Tummala, V. M. R., Phillips, C. L. M., & Johnson, M. (2006). Assessing supply chain management success factors: A case study. Supply Chain Management: An International Journal, 11(2), 179–192. doi:10.1108/13598540610652573 Waller, M., Johnson, M. E., & Davis, T. (1999). Vendor-managed inventory in the retail supply chain. Journal of Business Logistics, 20(1). 3 The ECR was founded in 1987 in the United States on the initiative of Procter & Gamble and Wal-Mart. The ECR project has spread into the next decade, even in European markets, where national ECR associations have been established. The two key elements of ECR projects ere aimed, firstly, at ensuring the flow of goods without stock breakings, and secondly, at regulating the information flow between actors within the channel through communication systems, such as Electronic Data Interchange (EDI) and new Internet based information technologies. Cross-docking is the practice of unloading materials from an incoming semi-trailer truck or rail car, and loading these materials directly into outbound trucks, trailers, or rail cars, with little or no storage in between. Cross-docking can be managed according to the logic of the multi-vendor platform (platform common to several manufacturers) or multi-retailer (platform common to several retailers). E-marketplaces may take different connotations, depending on the types of users and how their interactions work. An e-marketplace is called vertical when transactions are related to a specific sector or market segment. It is called horizontal if it accounts for different industrial sectors. Regarding the selection process of participants, an e-marketplace is called public if it is open to all companies wishing to buy or sell online, whereas it is called closed or selective, when restrictive criteria are set for access. Fabio Musso is Professor of Business Management at the University of Urbino “Carlo Bo”, Italy, Faculty of Economics, Department of Economics, Society and Politics. He is Chairman of the Master of Science in Marketing and Communications for Businesses at the University “Carlo Bo” of Urbino. His research interests are international strategy, marketing channels, retailing, logistics, CSR. He is author of over 70 scientific publications. Prior to entering the University he worked as area manager for companies in the furniture and automotive industry. Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.