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[Excerpt] We begin with a brief discussion of opportunism in marketing channels and then describe three mechanisms for governing marketing channels drawn from the concepts of transaction-cost analysis and relational-exchange theory. Next, we describe an empirical test of hypotheses relating to channel governance and then discuss the results of this study, emphasizing how these governance mechanisms can be used for either preventing or constraining opportunism.

Our hypotheses are tested using relationships in the hotel industry between individual hotels and their brand headquarters. On the one hand, the corporate brand headquarters focuses on developing and maintaining the overall marketing program, including the brand identity. On the other hand, the managers at an individual hotel property may be less than assiduous in fostering that brand identity. The chief reason we chose this setting is that hotel chains use a variety of mechanisms to govern individual properties’ operations. Among these mechanisms are corporate ownership of each hotel (e.g., Red Roof Inns), franchise agreements (e.g., Holiday Inn), owning transaction-specific assets (e.g., reservation systems), and relational exchange (e.g., Choice Hotels’ use of regional sales reps to assist its franchised hotels in developing marketing programs and in implementing company-wide marketing programs).


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