- Bucklin’s theory of channel structure is based in concepts of postponement and speculation. Costs can be reduced by:
- Postponing changes in the form and identity of a product to the last possible point in the marketing process
- Postponing inventory location to the last possible point in time since risk and uncertainty costs increase as the product becomes more differentiated
Speculation.
- Speculation is the opposite of postponement.
- Channel institution assumes risk rather than shifting.
- Speculation can reduce marketing costs through:
1. Economies of scale production
2. Placement of large orders that reduce the costs of order
processing and transportation
3. Reduction of stockouts and their associated costs
4. Reduction of uncertainty
