Model of Vertical Marketing System in Retail Distribution
AbstractFierce market competition among leading retailers asserts different models of market appearance and cooperation with suppliers. Vertical integration, as a kind of cooperation could range from one-hand transactions to mutual investments in specific assets. From a theoretical point of view the stages of integration at the end of distribution channel reflect on retailer's power and his need for resources. The importance of the paper is set by contemplation on integration factors by the modeling method. The factors like costs, responsibility, risk, margin, and function performance in the channel will be examined. The position of the partner that can be settled in the model could range from conventional contracting to full vertical integration, depending on the volume of the execution of marketing activities. The contribution of descriptive model could be a kind of recommendation to leading retailers in a way to introduce more proper forms of cooperation with suppliers.
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Bibliographic InfoArticle provided by Faculty of Economics in Osijek, Croatia in its journal Interdisciplinary Management Research.
Volume (Year): 5 (2009)
Issue (Month): ()
distribution channel; vertical marketing system (VMS); retailer; channel power; cooperation;
Find related papers by JEL classification:
- L80 - Industrial Organization - - Industry Studies: Services - - - General
- M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing
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- Oliver Hart & Sanford Grossman, 1985.
"The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration,"
372, Massachusetts Institute of Technology (MIT), Department of Economics.
- Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
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- Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
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