Question

Because of its size and relative power, Walmart can easily impose controls on small manufacturers, such as Brown Betty Dessert Boutique, but with large, powerful suppliers such as P&G, the control is more balanced between parties. Walmart’s various marketing channel relationships offer examples of different forms of a(n) ________ marketing system.

Answer 1

Walmart’s various marketing channel relationships offer examples of different forms of a vertical marketing system.

Explanation:

In vertical marketing system, the manufacturer, the wholesale distributor and the retail distributor work together to promote and manage huge base of customers. There are three distinguished forms in vertical marketing system namely,

• Corporate- where one member among the distribution channels holds the ownership.

• Administered- where one member among the distribution channels, without any ownership stake hold and coordinates the other members

• Contractual- where independent companies club together for mutual benefit on a contract basis.

Here, the Walmart company imposes control on small producers namely Brown Betty Dessert Boutique for their mutual benefits. The Walmart has the advantage of handling the key holds from the production of the product to the selling of the product. This helps in anticipating the problems priory, making necessary changes and thereby increasing the efficiency.