Determinants of vertical integration and control in distribution channels

Abstract

Current theories of marketing channel structure have stressed product and industry characteristics. We develop a theoretical framework which emphasizes the importance of the markets for each of the functions required by the distribution channel. This framework was used in an extensive and in depth case study for 23 companies in 6 industries in Venezuela. Imperfections in the market for loans, lack of specialized markets for certain channel functions, spatial monopolies enjoyed by retailers and agency problems were identified as crucial elements affecting vertical integration and control in distribution channels