Using the Principle of Postponement—Speculation to Analyse Channel Change

Abstract

In 1967, Louis P. Bucklin proposed the principle of postponement‐speculation as a basis for predicting and explaining the existence of speculative inventories in the marketing channel: “The combined principle of postponement‐speculation may be stated as follows: A speculative inventory will appear at each point in the distribution channel whenever its costs are less than the net savings to both buyers and sellers from postponement.” In other words, for a middleman to intervene between a seller and a buyer, he must demonstrate his ability and willingness to perform certain marketing functions in such a way that savings result, or satisfactions are greater, for both of the original trading partners. Therefore, the economic justification for a middleman's existence is his superior efficiency in performing basic marketing tasks and functions.

Citation

Lamb, C.W. (1977), "Using the Principle of Postponement—Speculation to Analyse Channel Change", International Journal of Physical Distribution, Vol. 7 No. 5, pp. 255-263. https://doi.org/10.1108/eb014401