Dual distribution systems: Investigating their effects on independent manufacturers’ representatives’ perceptions of manufacturers

Abstract

This study investigates how manufacturers’ (principals’) use of dual distribution systems—house accounts and house territories managed by in-house salespeople—influence independent manufacturers’ representatives’ (IMRs’) perceptions of sales controls, psychological climate, and overall satisfaction. Research on the use and effects of dual distribution selling systems has previously focused nearly exclusively on the perspective of manufacturers (principals). The study is based on a nationally representative sample of IMR practitioners, is grounded in and proceeds from the opposing dyadic perspective (the IMR [agency] view), and generates new and useful strategic insights related to how best to manage critical manufacturer-IMR relationships. The study reveals that manufacturers’ use of house territories, outside the domain of the focal IMR imposed favorable effects on IMR’s perceptions of sales controls and psychological climate, and contributed directly to higher IMR satisfaction with the principals they represent. House accounts inside IMR territories negatively influenced IMR perceptions of sales controls and psychological climate, and contributed directly to lower IMR satisfaction with the principals. Managerial implications and future research opportunities are developed and discussed.

Keywords:

• independent manufacturers’ representatives (IMRs)
• sales controls
• psychological climate
• house territories
• house accounts
• dual distribution