When a producer owns an intermediary at the next level down in the marketing channel, it is referred to as _________.

Question

Quizplus · Accepted Answer

Forward integration refers to a strategy where a producer acquires or owns an intermediary closer to the end consumer in the marketing channel. This allows the producer to have greater control over the distribution of their products and potentially increase their profit margins. Backward integration refers to a strategy where a producer acquires or owns an intermediary at a higher level in the marketing channel, such as a supplier or manufacturer of raw materials. Vertical channel connection is a broader term that refers to any type of relationship or connection between different levels in the marketing channel. Horizontal channel connection refers to relationships between intermediaries at the same level in the marketing channel. Horizontal integration refers to a strategy where a company acquires or merges with another company at the same level in the marketing channel to increase market power and efficiencies.

When a Producer Owns an Intermediary at the Next Level