Author ORCID Identifier

0000-0002-5075-4922

Date of Award

8-10-2021

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Marketing

First Advisor

Dr. Naveen Donthu

Second Advisor

Dr. Wesley J. Johnston

Third Advisor

Dr. Yi Zhao

Fourth Advisor

Dr. Kersi D. Antia

Abstract

With the advent of online, mobile, and social media channels, firms have an array of channels in their channel mix. The proliferation of channels has increased marketing costs and may be detrimental to a firm’s competitive position. Also, firms confront diverse issues, including channel conflict, cannibalization, cooperation, and control in today’s omni-channel environment. As the payoff of resource allocations differs across channels, I contend that judicious deletion of channels can be a viable option not only to reduce the channel-related concerns but also to enhance firm performance. Channel deletion is an emerging phenomenon in the real world and is currently receiving special attention in the industry. Further understanding is required concerning what drives a firm’s channel deletion decision and how this influences various channel issues, and ultimately that firm’s performance. In my dissertation study, I propose a comprehensive framework depicting drivers and outcomes of channel deletion. Drawing on multiple theoretical perspectives, I present a set of propositions that 1) identify drivers of channel deletion, 2) link channel deletion to channel cooperation and customer reactance which then influences firm performance, and 3) describe various contextual factors that govern the proposed relationships. Subsequently, I also investigate the influence of channel deletion strategy on firm value. Along with channel deletion (i.e., full deletion), firms are involved in the channel contraction (i.e., partial deletion) as well. While these strategies aim to reduce costs, thereby improving efficiency, there is a perception of risk (i.e., uncertainty over future cash flows). Using the data of 314 announcements made by 146 publicly traded U.S. firms across 39 industries over five years, I demonstrate the significant effect of channel deletion and channel contraction strategies on firm value and firm risk. I also observe that stock market reaction to channel deletion is more favorable than channel contraction; however, the firm value associated with the channel deletion attenuates in case of higher market turbulence. Further, channel deletion strategies enhance firm risk; however, the advertising intensity helps in reducing the risk. My dissertation study offers important insights regarding the channel deletion and contraction strategies for marketing theory and practice.

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