VERTICAL MARKETING SYSTEMS: A cost˜benefit approach to channel marketing decisions

Continued inflation at a high rate for some time seems to be inescapable. In this situation management must bring ever closer attention to bear on the issue of cost control, and particularly cost‐benefit analyses of their operations. One activity likely to come under close scrutiny is that of distribution. For some time physical distribution has been subject to rigorous examination in terms of “total” costs and “system/cost benefits”. By expanding the analysis to include channel considerations it is possible to consider all influences within a distributive process. This article therefore seeks to determine an approach to channel management which considers all the functions, activities and institutions comprising a distribution channel.