Answer questions 1, 3, and 7 (page 273), Chapter 9 of the text.
Conflict is normal among marketing channels as each member of the channel has a specific goal that is generally unique from the channel member preceding or following it. The goal of the manufacturer is different than the goal of the wholesaler and also different than the goal of the retailer. This is intuitive as each channel member performs a different task. However, these channel members are interdependent and will need the cooperation of the other channel members in order to achieve each others goals. Vertical integration fails to remove conflict, as conflict is essentially a constraint on limited resources. Resources are generally money and each channel member is trying to maximize their efficiency and many times that means reducing costs for the individual channel member even if that means increased cost for other channel members. This situation is not alleviated when vertical integration occurs. Vertical integration does not remove the constraint of limited resources and a vertically integrated channel would not seek to limit constructive conflict either. Conflict in marketing channels equates to a system of checks and balances leading in a thesis, antithesis, synthesis convention. .
2. This statement has some validity. As the market matures it will be necessary to understand how the different market segments are being established and what channels are going to serve the market best. Brokerage operations were mentioned as an example of this situation. Traditionally investors were dependent on brokers in order to carry out their stock transactions. However, it is now possible make these transactions without a broker via online trading. Brokers resisted this new channel but after the channel is established the role of the broker may be redefined as more informed consumers and now able to consult a broker following some experience with online trading.