Conventional Distribution Systems
- Consist of one or more independent producers, wholesalers, and retailers.
- Each seeks to maximize its own profits and there is little control over the other members.
- No formal means for assigning roles and resolving conflict.
- Corporate marketing systems
- Contractual marketing systems
- Administered marketing systems
Contractual vertical marketing system consists of independent firms at different levels of production and distribution who join together through contracts to obtain more economies or sales impact than each could achieve alone.
Most common form is the franchise organization
Administered vertical marketing system has a few dominant channel members without common ownership. Leadership comes from size and power.
Franchise organizations link several stages in the production distribution process.
Conventional VS Vertical system
- Horizontal marketing systems include two or more companies at one level that join together to follow a new marketing opportunity
- Companies combine financial, production, or marketing resources to accomplish more than any one company could alone.
- Hybrid marketing channels exist when a single firm sets up two or more marketing channels to reach one or more customer segments.
Disintermediation
- Disintermediation occurs when product or service producers cut out intermediaries and go directly to final buyers, or when radically new types of channel intermediaries displace traditional ones.
Number of marketing intermediaries
