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Model of Vertical Marketing System in Retail Distribution

Author

Listed:
  • Dario Dunkovic

    (GELI Ltd., Croatia)

Abstract

Fierce 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.

Suggested Citation

  • Dario Dunkovic, 2009. "Model of Vertical Marketing System in Retail Distribution," Interdisciplinary Management Research, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 5, pages 627-637.
    • Handle: RePEc:osi:journl:v:5:y:2009:p:627-637
    as

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    References listed on IDEAS

    as
    1. 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.
    2. Williamson, Oliver E, 1971. "The Vertical Integration of Production: Market Failure Considerations," American Economic Review, American Economic Association, vol. 61(2), pages 112-123, May.
    3. 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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    More about this item

    Keywords

    distribution channel; vertical marketing system (VMS); retailer; channel power; cooperation;
    All these keywords.

    JEL classification:

    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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