Abstract

The article presents a discussion of the extent and impact of dual distribution and related vertical integration in marketing organization--particularly with reference to small businesses. In the U.S. economy, the production of finished goods is heavily concentrated in large manufacturing firms; by contrast, physical distribution and marketing activity are more widely dispersed among smaller, independent enterprises. The relationships between these two groups of firms are never static and the development and disappearance of particular organizational forms and interfirm trading relationships is an important subject for analysis. Considerable attention has recently been drawn to a tendency for manufacturers to control, absorb, or compete with their traditional distributive outlets, and-to a lesser degree--a tendency for large distributive firms, principally chain department and food stores, to extend backward control over their sources of supply. These changes in the pattern of firm and market organization take many different specific forms and take place at different rates and even different directions, in different industries and areas. One type of change that has been subjected to extensive recent examination is the growth of "dual distribution," which takes place when a single supplier distributes its products through more than one type of marketing organization or channel.