Marketing channels scholars have studied vertical/institutional integration in considerable detail, but have neglected the very important issue of functional integration in marketing channels. Moreover, marketing researchers have explored in depth the relationshp between product quality and purchase price, yet the link between quality and total costs has received little attention. Purchase price may be the tip of the total cost iceberg. This article develops a set of critical antecedents and consequences of product quality. In a step toward answering the Alderson's call for a theory of marketing cooperation, "functional integration" is linked to product quality and total costs. The link between quality and total costs (including price) is also developed.
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