Discuss marketing systems

What will be an ideal response?

Answer: To minimize costs and the potential for channel conflict, channel partners can take steps to work out issues of organization and control. Without some degree of coordination, the various companies involved will pursue their own economic interests, often to the detriment of the channel as a whole. Producers and intermediaries can achieve this coordination through marketing systems, in which the channel participants agree to operate as a cohesive system under the leadership of one of the participants. The agreement can be brought about through ownership (when the production and distribution firms are owned by a single company), contracts (when the participants have formal agreements that specify their rights and responsibilities), and economic power (when one player is so big that its economic presence is enough to encourage or even force cooperation from the other participants in the channel).