Co‐operation in Channels of Distribution: Physical Distribution Leads the Way

Abstract

Historically goods and services have been distributed through networks in which loosely aligned firms have bargained at arm's length, negotiated aggressively over price and other conditions of sale, and otherwise behaved autonomously. However, planned vertical marketing systems are rapidly displacing these conventional marketing channels as the dominant mode of distribution in the American economy. These vertical marketing systems tend to be professionally managed, pre‐planned, rationalised, and capital intensive. According to McCammon, over 60 per cent of total retail sales are through firms affiliated with vertical marketing systems.

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