MIT Sloan Management Review

The sale of branded products through unauthorized channels is a growing problem for suppliers. A three-pronged approach can help them fight back.

The pricing of services in the United States is a mess. Consider these examples:In 1992, Congress enacted the Cable Act to rein in prices in the cable television industry.

“Be first to market” is one of the most enduring principles in business theory and practice. But the authors point out that many pioneer companies have failed, whereas most current market leaders were not pioneers. In analyzing why this is so, the authors found that market leaders embody five factors that are critical to success.

Gray market goods — brand name products sold through unauthorized channels — are an increasing threat to multinational companies. The authors present a framework to help select the right approach to coordinating price-setting decisions on the basis of a subsidiary’s local resources and the complexity of a product’s market. Examples of price coordination methods are provided.