Since the late 1960's there has been an increasing
tendency to analyse marketing channels as social systems
rather than as economic systems. Despite this, the
relationship between vertical integration and performance
in marketing channels has continued to be analysed
from an economic perspective. In this study, not only
is a social systems approach adopted to examine the
relationship between vertical integration and performance,
but certain additional features are also included
to refine this approach.
There are a variety-of social systems, each with
distinct characteristics. This study argues that the
marketing channel can be interpreted as an Interorganisational
Collectivity, a form of interorganisational
system.
The model of vertical integration and performance that
is proposed, and subsequently examined, is based on a
combination of theoretical and empirical analysis. This
work involved a series of in-depth interviews, reference
to studies of interorganisational networks other than
marketing channels, and a consideration of certain
behavioural themes from the channels literature.
In addition to the social systems approach, this model
differs from previous models in several other respects.
These are the separation of vertical integration and
co-ordination, -the multi-dimensional view of channel
performance and the introduction of channel atmosphere
as a principal factor.
A detailed analysis of marketing channels in the egg
industry is used to test the appropriateness of the
model, and to identify some modifications to its
operational elements. These modifications allow for
further validation to take place. Although the empirical
examination of the model was affected by a fundamental reorganisation
within the industry during the course of the
work, the results do serve to indicate the usefulness of
the concept of channel atmosphere and the need to take
account of the size of channel members whenever the.
relationship between vertical integration and performance
is considered