Vertical Territorial Restraints Rules of Legality
and Guidelines for Channel Design
Lonnie L. Ostrom
Arizona State University
Craig Kelley
Arizona State University
Donald W. Jackson, Jr.
Arizona State University
Location clauses and other vertical territorial restraints
are often used by manufacturers to exert control over their
distributors. Yet, recent Supreme Court decisions have re-
sulted in some uncertainty as to the legality of these re-
straints. According to the case of Continental T.V. versus
GTE Sylvania, the court now appears to be applying the rule
o f reason when a s k e d to e x a m i n e vertical territorial
restraints.
In this article, the sequencing of precedent cases that
ultimately resulted in the rule of reason are presented first.
Second, an interpretation of the Continental T. V. versus GTE
Sylvania case is offered. Finally, some selected guidelines
that shouM help a manufacturer survive a court inquiry un-
der the rule of reason are provided.
INTRODUCTION
Manufacturers and government often have different view-
points regarding the control of distribution channels. Man-
ufacturers desire to control the activities of their distributors
in order to obtain a competitive differential advantage and to
ensure profitable outlets for their goods. Government,
through antitrust laws, is committed to the preservation and
9 1986, Academy of Marketing Science
Journal of the Academy of Marketing Science
Spring, 1986, Vol. 14, No. 1,001-006
0092-0703/86/1401-0001 $2.00
promotion of competition. Thus, it is not unusual for the
views of business and government to differ. Manufacturers
seek to protect and develop their markets, while government
efforts seek to promote competition and prevent barriers to
entry to these markets.
One area where this difference has manifested itself is
vertical territorial restraints. A vertical territory restraint re-
sults from an agreement between a manufacturer and distrib-
utor, limiting the area in which the distributor may operate.
Its primary economic justification is based on improved dis-
tribution, thereby enhancing interbrand competition, even at
the expense of some restraint on intrabrand competition.
Territorial restrictions have been used by manufacturers in
their distribution systems to obtain market access and en-
courage distributor investment, to improve product exposure
at less cost, to increase sales through wider coverage of
geographical markets, to provide uniformity in quality and
character of distributor service offerings, to ensure the ade-
quacy and continuity of distributor services, and to prevent
distributors from invading established markets and skimming
customers.
On the other hand, the Department of Justice has held that
in certain situations, there are serious competitive risks re-
sulting from territorial restraints. These restraints may cause
exclusive territories to limit price competition, to impede
entry into the marketplace, and to create monopoly profits
at the retail level, especially when interbrand competition is
weak.
The purpose of this article is to examine several recent
court cases involved with vertical territorial restraints and to
provide a framework for businesses seeking to use territorial
restrictions.
VERTICAL TERRITORIAL RESTRAINTS RULES OF LEGALITY
AND GUIDELINES FOR CHANNEL DESIGN
PRECEDENT CASES
The White Motor Case
White Motor Co. versus United States (1963) was the first
major challenge to the use of territorial restraints. Rather
than adopt a per se rule, which would have made territorial
restraints illegal as a matter of course, the Supreme Court
chose to apply a rule of reason approach to determine if an
unlawful restraint of trade had occurred. Furthermore, the
Court indicated that territorial restrictions might be justified
in certain situations, such as: the company was failing; the
company was small and was attempting to break into the
market; or the company adopted territorial restriction to pro-
tect itself against aggressive competitors (White 1963, pp.
263, 264). The case by case rule of reason approach,
adopted by the Court in White Motor, was to last only four
years until the United States versus Arnold Schwinn decision
(1967).
The Schwinn Decision
In 1951, Schwinn had the largest single share of the U.S.
bicycle market at 22.5 percent. In 1952, Schwinn adopted a
new marketing program designed to improve its competitive
posture. Schwinn had three principal methods of selling:
sales to distributors; sales to retailers by means of consign-
ment or agency arrangements with distributors; and sales to
retailers under the so called Schwinn Plan which involved
direct shipment by Schwinn to the retailer with Schwinn
iovoicing the dealers, extending credit, and paying a com-
mission to the distributor taking the order. At the same time,
Schwinn reduced its mailing list from 15,000 retail outlets
to about 5,500, keeping only the most active dealers, and
instituted a franchising program. The franchisees could han-
dle other brands, but were required to promote Schwinn
bicycles. The number of franchise dealers was limited and
each dealer was granted a franchise only for a designated
location. Furthermore, each dealer could purchase only from
the specific distributor authorized to serve that particular
area, and the dealer could resell stock only to consumers,
and not to unfranchised retailers.
Even though the Schwinn case involved other alleged vi-
olations, the Supreme Court rendered its decision solely on
the issue of territorial restrictions. In reaching its decision,
the Court formulated two separate rules. The rule to be
followed in a particular case depended, from the language
of the Court, only on who had title to the goods. According
to this rule, a territorial restraint is per se illegal if the
manufacturer surrenders title to the goods. But this same
territorial restraint is analyzed under the rule of reason if the
manufacturer retains title. In other words, the per se rule
established by the court specified that in the case where title
was passed, the reasonableness of the restraints was not a
defense.
The Schwinn decision has been strongly criticized by both
the legal and business communities. In order to avoid the
JAMS
OSTROM, KELLEY AND JACKSON
harshness of the per se rule, many judges of lower courts
resorted to novel distinctions to escape the ruling. These
included establishing that the product involved was danger-
ous, that the product was perishable, that the sale was a
service rather than a good, that areas of primary responsi-
bility were assigned, or that exclusive relationships were
granted (Travers and Wright 1962; Stewart 1963; Stewart
1964; Jordon 1962).
The confusion created by differing interpretations caused
a situation in which the legality of vertical territorial restric-
tions would have to be determined by the Supreme Court. In
Continental T.V. versus GTE Sylvania (1977), the Supreme
Court seized the opportunity to do exactly that.
The Continental T,V. Decision
In the early 1960s, Sylvania decided to adopt a selective
distribution system, such as that pioneered in the late 1950s
by Magnavox. Sylvania believed that they could become
more effective in the rapidly expanding color television mar-
ket by developing a prestige image and a network of dealers
with sufficient loyalty to Sylvania to aggressively market the
firm's products (Continental T.V. versus GTE Sylvania,
1976). They phased out their wholesale and factory distrib-
utorships making sales instead to franchised dealers, who in
turn sold to customers. To attract franchisees, Sylvania.
sought to limit the number of retail dealers. An essential
element in this strategy was the practice of franchising by
location; dealers were authorized to sell Sylvania products
only at designated locations. A dealer could not move Syl-
vania brand merchandise to new locations for resale without
the prior approval of Sylvania (Continental 1976, pp. 983,
984).
Sylvania's policy was moderately successful in improving
their competitive position. The Sylvania case was the result
of a conflict between Sylvania and Continental T.V., one of
their franchisees. In May, 1964, Continental became an au-
thorized Sylvania dealer at several of its locations. By May,
1965, Continental had become one of the largest Sylvania
dealers in the nation, and operated Sylvania franchises at
eight locations in Northern California (Continental 1976, p.
983).
Trouble began when Continental learned that Sylvania
planned to franchise a dealer (Young Brothers) located ap-
proximately one mile from a Continental outlet in San Fran-
cisco. Over strong protests by Continental, the Young
Brothers' franchise was granted in June, 1965. Continental
cancelled a very large Sylvania order and placed a half mil-
lion dollar order with Philco, advising Sylvania that there
would be further reductions in purchases (Continental 1976,
p. 984).
In March, 1966, Continental notified Sylvania of its intent
to enter the Sacramento market. It leased a location approx-
imately one mile from another Sylvania dealer. In early Sep-
tember, Continental advised Sylvania of its Sacramento
location and requested a franchise which was subsequently
2 SPRING, 1986
VERTICAL TERRITORIAL RESTRAINTS RULES OF LEGALITY
AND GUIDELINES FOR CHANNEL DESIGN
denied. Continental moved Sylvania merchandise into the
Sacramento store and, on September 7, began selling Syl-
vania merchandise from that location in violation of its lo-
cation agreement with Sylvania (Continental 1976, pp. 984,
985). After considerable strategic jockeying between Syl-
vania and Continental, Sylvania notified Continental that its
franchise was cancelled.
At this time the court of actions began. Sylvania con-
tended that its actions were the result of a deep concern over
Continental's ability to meet its credit obligations and were
not an attempt to enforce its locations clause. The claim was
not accepted by the Court. The District Court found that
Sylvania had requested its financing agent to sue Continental
in order to enforce the location clause and that Sylvania's
other actions were not as a result of credit concerns. The
decision of the District Court was appealed to the Ninth
Circuit Court of Appeals, who, being unable to overrule a
decision of the Supreme Court, had two alternatives: they
could follow Schwinn and declare Sylvania's distribution
practices to be illegal p e r se, or they could distinguish be-
tween the two cases making the Schwinn precedent inappli-
cable to Sylvania. The majority, over strong dissent, chose
the second route and upheld Sylvania's distribution system
based upon the rule of reason.
The decision of the Ninth Circuit upholding the legality
of Sylvania's territorial restriction was appealed to the Su-
preme Court. Continental T.V. went to the Supreme Court
on one specifically defined issue: Do location clauses (a type
of vertical territorial restraint) fall under the p e r se rule as
expounded by the Court in the Schwinn case? The Supreme
Court had three alternatives: it could follow Schwinn and
declare the location clause a vertical territorial restraint, il-
legal p e r se; it could distinguish between the two cases and
decide the case on other grounds; or it could overrule the
Schwinn decision.
The Supreme Court overruled the p e r se rule established
in Schwinn but indicated that particular situations in the
future may result in p e r se prohibitions. Mr. Justice Powell,
in delivering the opinion of the Court, indicated that
9 . . there has been no showing in this case,
either generally or with respect to Sylvania's
agreements, that vertical restrictions have or are
likely to have a 'pernicious effect on competi-
tion' or that they ' l a c k . . . any redeeming vir-
tue.' Accordingly, we conclude that the p e r se
rule stated in Schwinn must be overruled. In so
holding we do not foreclose the possibility that
particular applications of vertical restrictions
might justify p e r se prohibition . . . But we do
make clear that departure from the rule of reason
standard must be based upon demonstrable eco-
nomic effect rather than as in Schwinn upon
formalistic line drawing. In sum, we conclude
that the appropriate decision is to return to the
rule of reason that governed vertical restrictions
prior to Schwinn (Continental 1977, p. 59).
JAMS
OSTROM, KELLEY AND JACKSON
INTERPRETATIONS OF THE CONTINENTAL T.V.
DECISION
The fact that Schwinn was overruled has been established.
Nevertheless, the only things that are certain are that Syl-
vania's territorial restraints are permissible, and that the p e r
se rule and the distinction between sale and nonsale items
have been removed. However, several crucial questions are
raised by the decision. The first question that must be an-
swered is whether the Continental T.V. case was simply the
best opportunity to eliminate a troublesome precedent or
whether the Court really backed off from its stand in
Schwinn. Are the predictions of new freedom for manufac-
turers correct or should the Continental T.V. case be viewed
simply as a refusal to extend Schwinn to another type of
situation?
Mr. Justice White in his concurring opinion believed that
Continental T.V. was distinguishable from Schwinn because
there was less potential for restraint of intraband competition
and more potential for stimulating interbrand competition
(Continental 1977, p. 58). In other areas of antitrust law, the
court based per se illegality in part on the defendant's market
power. There were two major factors that would justify a
refusal to extend Schwinn to a vertical restraint imposed by
a "faltering" Sylvania type manufacturer. First, when the
ability of consumers to obtain product substitutes provides
a significant check on the exploration of intrabrand market
power; and second, when potential benefits resulting from
vertical restraints are significant when used to enter a new
market or expand an existing small market share. The loca-
tion clause imposed by a manufacturer with negligible mar-
ket power has an impact sufficiently less restrictive than
Schwinn to justify a rule of reason standard. This was all
that Mr. Justice White felt was necessary to decide the case
(Continental 1977, p. 66). Overruling Schwinn was unnec-
essary. The majority of the court, however, was unable to
distinguish Continental T.V. from Schwinn.
The second question raised concerns about the future di-
rections to be taken by the court. If the court has indeed
retreated from Schwinn, then manufacturers may have won
a victory of unknown proportions. However, the present po-
sition of the court has left manufacturers with a great deal
of uncertainty..Under the Schwinn ruling, vertical territorial
restraint was illegal per se, and p e r se rules have the advan-
tage of certainty. Manufacturers knew what they could not
do, even if they did not know what they could do. That
certainty is now gone. Vertical restraints are now subject to
the rule of reason which may be interpreted differently.
There is also a possibility of future p e r se rulings.
Court Reaction to the Continental T.V. Decision
The courts have reacted to Continental T.V. in different
ways. In the case of Pitchford Scientific, Etc. versus Pepi,
3 SPRING, 1986
VERTICALTERRITORIALRESTRAINTSRULESOF LEGALITY
AND GUIDELINESFOR CHANNELDESIGN
Inc. (1977), a district court in Pennsylvania stated t h a t " . . .
it is probable that the Continental T.V. case will produce as
much confusion and controversy as the Schwinn case which
it superseded" (Pitchford 1977, p. 687). The court then
went on to determine that the alleged vertical restraint in the
case was, in reality, a horizontal restraint because of an
explicit agreement between the parent company and each
dealer to divide territories as distinguished from the "loca-
tion clause" in Continental T.V., since sales were forbidden
to customers located outside the dealer's assigned territory.
However, the Seventh Circuit Court of Appeals, in the case
of General Beverage Sales Co. v. East Side Winery (1978)
strongly disagreed with the Pitchford decision and said that
Continental T.V. was not so narrow that it covered arrange-
ments "attempting to restrict a retailer's freedom as to where
and to whom it will resell the products" (General Beverage
1978, p. 1153). The court then quoted Justice Powell's re-
mark in Continental T.V.: "The fact that one restriction was
addressed to territory and the other to customers is irrelevant
to functional antitrust analysis . . . " (General Beverage
1978, p. 1153).
Additionally, the courts have continued to give credence
to some of the court developed exceptions to the Schwinn
doctrine, before Continental T.V. became a reality. In La-
Fortune versus Ebie (1972), a California court, in 1972,
justified exclusive territories since the product in question
was perishable (chicken). Shortly after the Continental T.V.
decision, another court upheld territorial restrictions im-
posed on dealers in the distribution of newspapers which, in
a sense, could be considered a perishable product since news
becomes dated in a short period of time (Newberry versus
Washington Post Co. 1977). The court rendered this decision
in spite of the fact that the paper in question had a near
monopoly in the general morning newspaper market in the
Washington, D.C. area. The court found that the purpose of
the restriction "was simply the furtherance of a legitimate
marketing objective: to accomplish maximum market pene-
tration and prompt, efficient, undisrupted delivery to home
subscribers" (Newberry 1977, p. 475). Furthermore, given
the nature of the newspaper business:
The system adopted was reasonably necessary
to achieve this o b j e c t i v e . . . It was not the only
system possible, as subsequent events demon-
strated, nor was it necessarily the least restric-
tive alternative imaginable, but such a showing
need not be m a d e . . . The efficiency generated
by this system facilitz low retail prices and
wide circulation in comeiete harmony with both
the purposes of the antitrust laws and the public
interest in an informed citizenry (Newberry
1977, p. 475).
Likewise, profit passover arrangements received judicial
support subsequent to Schwinn and prior to Continental T.V.
In Superior Bedding Co. versus Serta Associates, Inc.
(1972), the payment of 7 percent of gross receipts on sales
outside of a licensee's primary sales area to another licensee
JAMS
OSTROM, KELLEYAND JACKSON
having the primary rights to that area was upheld by a federal
district court. The court determined that the profit passover
was equivalent to the primary licensee's fixed selling ex-
penses, advertising costs and goodwill, and still allowed the
outside licensee to recognize a profit. This pre Continental
T.V. decision does not, however, mean that all arrangements
in the nature of a profit passover in the post Continental T.V.
era will be successful under the rule of reason.
In Eiberger versus Sony Corp. of America (1978), a fed-
eral district court in New York struck down an arrangement
similar to a profit passover dressed in the attire of a warranty
plan. In this case, a Georgia dealer shipped Sony equipment
in wholesale quantities to dealers in Florida, who then dis-
counted the equipment in competition with other authorized
Sony dealers. The Florida dealers complained to the parent
company and a warranty system was developed by Sony
Corp. of America, whereby the extraterritorial selling deal-
er's account with Sony was debited in an amount commen-
surate with a predetermined warranty fee schedule, and the
warranty fee was given to the nonselling dealer where the
sale took place. The court found that the primary purpose
was to prevent price cutting and eliminate competition cre-
ated by this type of discount selling. The court further found
that the amount of the warranty fee debit was sufficient to
eliminate any profit which a dealer would make from selling
to unauthorized dealers for resale outside of the dealer's
territory. The court stated:
Judged, as it must be, by the rule of reason
applied by the Supreme Court in Continental
T.V., supra, these territorial restraints imposed
by Sony upon its authorized dealers cannot be
justified as having a valid business purpose.
Whatever slight benefits the plan may have had
in stimulating interbrand competition, these
were far outweighed by its adverse effect upon
intrabrand competition (Eiberger 1978, p.
1282).
Another area in which the court found exceptions to
Schwinn and which appear noteworthy, is that of product
safety requirements. In Tripoli Company versus Wella Corp.
(1970), the court approved a requirement that distributors
limit resale of beauty products to the professional beauty
and barber trade on the grounds that the restriction was
directed towards customers, not territories, and was neces-
sary to prevent personal injuries to consumers and to avoid
product liability difficulties.
The uncertainty created by the court's vacillation on the
legality of vertical territorial restraints has been disconcert-
ing to manufacturers. Distribution channels are long term
policy commitments for most firms and changes in these
policies can have an adverse impact upon a firm's ability to
service its markets. It appears that the courts will now judge
vertical territorial restraints on a case by case basis with the
rule of reason. Under this rule, the courts will weigh the
economic harms and benefits of the restraint and investigate
the possibility of a less restrictive alternative. Recently de-
4 SPRING, 1986
VERTICAL TERRITORIAL RESTRAINTS RULES OF LEGALITY
AND GUIDELINES FOR CHANNEL DESIGN
cided court cases have reaffirmed this conclusion. In three
such cases, Eastex Wholesale Beer versus Adolph Coors
Co., et al. (1982), Valley Liquors, Inc. versus Renfield Im-
porters, Ltd. (1982), Davis Watkins and Amana Refrigera-
tors, Inc. versus Service Merchandise (1982), the courts
reiterated the decision reached in Continental T.V. that ver-
tical restrictions on distributors may be necessary and can
be procompetitive.
GUIDELINES FOR USE OF VERTICAL
TERRITORIAL RESTRAINTS
The ultimate question still remains. What can manufac-
turers do in light of Continental T.V., in designing their
distribution systems? While the use of territorial restraints
or location clauses must be directed to the specific situation,
there are several general principles governing their use
(Grimm 1977; Finkelstein 1982; Cady 1982; Sands and
Posch 1982).
1. Since one of the first questions that the courts will ask
is whether there are less restrictive methods, the vertical
territorial restraint should be drafted in the least restrictive
language necessary to achieve the desired objective. For ex-
ample, reserving the right to approve sales from certain lo-
cations, rather than prohibiting sales from all locations not
designated in the agreement, can reduce the chance of an
antitrust action being brought by a distributor.
2. In franchise situations, the manufacturer should con-
sider it an obligation not to franchise new locations within
an area already serviced by a franchise, unless the area is
larger than reasonably necessary to protect the original fran-
chisee. Such agreements have been held to be lawful in areas
where there is significant interbrand competition and should
provide a valid defense for the refusal to authorize another
location in the area (Elder Beerman Stores Corp. versus
Federated Department Stores, Inc., 1972).
3. Location clauses in agreements between a manufac-
turer and distributor should be defensible if the agreement
requires the manufacturer to prevent other distributors of the
same brands from expanding into the area. In the Continental
T.V. decision, the court majority concluded that if location
clauses were held to be unlawful p e r se, the decision would
conflict with previous decisions that have upheld exclusive
distributorships.
4. Territorial restrictions involving trademark agreements
tend to be more defensible than agreements that merely re-
strict the locations where the product can be sold. For this
reason, manufacturers should consider writing into an agree-
ment a licensing arrangement which restricts the use of the
trademark to authorized locations rather than simply restrict-
ing the locations for the sale of a product. The maintenance
of quality control under a licensing agreement is consistent
with the rule of reason and could serve as the basis for the
establishment of territorial restraints.
JAMS
OSTROM, KELLEY AND JACKSON
5. A record of fair and equitable treatment of all distrib-
utors should aid the defense in any legal challenge of vertical
territorial restraints due to the rule of reason doctrine
adopted by the court in the Continental T.V. decision. This
is particularly important in cases where the manufacturer
controls a significant share of the market. Highly competi-
tive markets are usually subject to less scrutiny than highly
concentrated markets. The manufacturer should note that the
manner in which a location clause is enforced is often as
important as the language of the location clause, since the
application of the rule of reason doctrine depends upon the
unique circumstances under which each restraint clause op-
erates, and is not necessarily universally applicable to re-
straint clauses in general.
6. The refusal of a request to license or ship a product to
a new distributor in an open territory should be defensible
on the basis of being a purely unilateral action on the part
of the manufacturer. Support for the decision to refuse such
a request can be based on sound business reasons (i.e., bad
credit rating or inadequate servicing of existing areas) (Col-
orado Pump and Supply Co. versus Febrco, Inc., 1973; Ea-
ton Yale and Towne, Inc. versus Sherman Industrial
Equipment Co., 1970).
7. The defensibility of a location restriction is enhanced
if it can be effectively related to the perishability of the
product or the safety requirements in its distribution or use.
Also, in situations where location restrictions have been im-
plemented, profit passover arrangements can be established
to insure equity among dealers whose aggressive marketing
generates sales near other dealers. These profit passover ar-
rangements must be defensible, however, from a cost stand-
point and must not restrict intrabrand competition.
8. A request by an existing distributor for a new location
should always be denied in writing before a dialogue with a
new distributor for the new location is instigated. This prac-
tice should reduce the possibility of an allegation of con-
spiracy by the denied distributor, which is in violation of the
Sherman Act (American Motor Suns, Inc. versus Holiday
Inns, Inc. 1975).
9. If a distributorship is established in an unauthorized
location, the manufacturer must carefully weigh the possible
repercussions before any action is taken. Courts or juries are
likely to be less sympathetic toward the manufacturer's sit-
uation if the distributor is immediately terminated and the
action causes business loans to be accelerated or the foreclo-
sure of a mortgage. If the manufacturer's action takes the
form of economic pressure being applied to the distributor
which eventually forces the distributor to stop selling the
product at a new location, the action may be construed as
evidence of a combination which is specifically barred in
Section 1 of the Sherman Act. An alternative approach in
this situation would be to file a contract or trademark agree-
ment which would leave the franchisee to operate in the
preexisting location and possibly allowing the sale of other
products under different brand names at the new location.
5 SPRING, 1986
VERTICAL TERRITORIAL RESTRAINTS RULES OF LEGALITY
AND GUIDELINES FOR CHANNEL DESIGN
CONCLUSIONS
The foregoing guidelines should provide a manufacturer
with reasonable, conservative guidance in the development
and use of vertical territorial restrictions. It is our belief that,
even in the light of Mr. Justice White's cautious opinion,
the Court in Continental T.V. stands ready to view vertical
territorial restraints as presumptuous of legality rather than
p e r se illegal. In this sense, the Schwinn decision has been
overruled. If Schwinn were once again before the Court and
tested under the rule of reason, the decision may not be any
different, but the analysis used by the court would be.
FOOTNOTES
tIntrabrand competition refers to the brand rivalry which develops be-
tween intermediary outlets that sell identical branded products. Interbrand
competition refers to the brand rivalry among enterprises that sell different
branded products.
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ABOUT THE AUTHORS
LONNIE L. OSTROM is Professor of Marketing in the Col-
lege of Business Administration and Director of Develop-
ment for Arizona State University. He has a BBA from the
University of Wisconsin, an M.S. from Southern Illinois
University and a Ph.D. from the University of Alabama. He
has had articles published in a number of business journals,
including Journal of Academy of Marketing Sciences, Indus-
trial Marketing Management, Retail Control, Journal of
Transportation and others. In addition, he has coauthored
two books and an American Marketing Association mono-
graph, Marketing Profitability Analysis: An Annotated
Bibliography.
CRAIG A. KELLEY is a doctoral student in marketing at
Arizona State University. His research emphasis is in the
area of legal aspects of marketing, and especially channels
of distribution.
DONALD W. JACKSON, JR. is a Professor of Marketing
and Director of Research in the College of Business Admin-
istration at Arizona State University. He is a frequent con-
tributor to the marketing literature with titles in Journal of
Advertising, Journal of Advertising Research, Journal of Re-
tailing, Industrial Marketing Management, California Man-
agement Review and others. In addition, he serves on the
Editorial Review Board of the Journal of Marketing.
6 SPRING, 1986