MKTG10001 Lecture Notes - Lecture 17: Toothpaste
3 Jun 2018
School
Department
Course
Professor
MKTG10001 Semester 1 – Channels of Distribution – Conflict & Context
Channel Behaviour
• Conflict can emerge between manufacturer & intermediaries
• Horizontal conflict
o Conflict between firms at same level of channel
o E.g. fast food industry - a particular store can diminish brand due to
quality, result in poor performance
• Vertical conflict
o Between different levels of same channel
o E.g. Coles v Arnotts
Channel Organisation
• Conventional marketing channels
o Channel members acting independently
o Maximising own profits even at expense of maximising profits for
system as a whole
• Vertical marketing systems
o Have structures in place so that channel members acting as a unified
system
Vertical Marketing System
1. Corporate VMS
o Combines successive stages of production & distribution under single
ownership - easiest way to ensure members act as a unified system is
to own all of the stores, but also expensive e.g. Apple trying to buy all
of JBHIFI stores, etc. Still have to rely on goodwill of retailers
