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Evolution of Vertical Marketing System to Conventional Distribution Channels

How might a distribution channel evolve from a conventional distribution channel to a vertical marketing system?

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Distribution channel refers to the path that is used by companies in order to deliver their goods and services to consumers. A distribution channel includes several interconnected intermediaries such as wholesalers, distributors, agents and retailers (Cravens, 2010). It is necessary that each channel member's role must be specified and channel conflict must be managed in order to ensure the effectiveness of channel as a whole. Additionally, the channel will also perform better if it includes a firm, agency or mechanism because all these in a collective form provide leadership and have the power to assign roles and manage conflicts (Havaldar, 2005).

Previously, conventional distribution channels have lacked such leadership and power that further result in damaging conflict and poor performance. This lack of leadership might evolve a distribution channel from a conventional distribution channel to a vertical marketing system (VMS) (Kotler, 2008). The emergence of vertical marketing system has been considered as one of the biggest channel development, as it provides channel leadership and thus, helpful to maximize firm's benefits. A conventional distribution channel consists of one or more ...

Solution Summary

An evolution of vertical marketing systems to conventional distribution channels are examined.