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Advantages
• It is easier to control channel behavior
• It is easier to eliminate conflicts that results when independent channel members
pursue their own objectives.
• It improves distribution efficiency by combining the efforts of individual channel
member
• The economies of scale through the size, bargaining power and eliminating of
duplicating services can be achieved
Disadvantages
• Involves some cost
• Marketers lose some flexibility
Horizontal Marketing Systems
In which two or more unrelated companies put together resources or programs to
exploit an emerging marketing opportunity. Each company lacks the capital, know-how,
production, or marketing resources to venture alone, or it is afraid of the risk. The
companies might work together on a temporary or permanent basis or create a joint
venture company.
Advantages
• Horizontal integration of related businesses allows them to achieve economies of
scale by selling more of the same product through geographic expansion.
• Horizontal marketing system includes the economies of the scope through
synergies achieved by sharing of resources common to different products, and
reduction in the cost of international trade by operating factories in foreign
countries
Disadvantages
• Integration of business may result in problems related to size such as lack of
coordination.
• Conflicts between members
• Decrease in Flexibility
Integrated marketing channel system - is one in which the strategies and tactics of
selling through one channel reflect the strategies and tactics of selling through one or
more other channels.
• Exclusive dealing - only certain outlets are allowed to carry a seller’s products.
Requiring that these dealers not handle competitors 'products
• Exclusive Territories - The producer may agree not to sell to other dealers in a
given area, or the buyer may agree to sell only in its own territory.
E-Commerce Marketing Practices
• E-commerce uses a Web site to transact or facilitate the sale of products and
services online. Online retail sales have exploded in recent years, and it is easy
to see why.
Types of E-Commerce
• Pure-click companies - are ones that conduct their business operations only
online and do not do business offline. These companies have launched
themselves only on Internet without any previous existence as a firm.
• Brick-and-Click Companies - is a business model in which a company operates
both an online store (the clicks) and an offline store (the bricks) and integrates
the two into a single retail strategy.