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Management article
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Reference no. 77111
Published by: Harvard Business Publishing
Published in: "Harvard Business Review", 1976

Abstract

Courts increasingly frown on companies'' efforts to keep markets separate. To avoid conflicts and problems that can arise along the channel or in the laws under which a business operates, and understanding of the various possible combinations of markets, channels, and products is essential. Sellers sending their products through both captive and independent outlets may face the problem of discrimination during periods of supply shortages or a possible "price squeeze". A company that uses separate channels to sell the same product to different markets must often deal with price differentials and contracts. Suppliers using different types of channels when selling in different geographic regions are subject to government intervention through price controls and tax differences.

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Abstract

Courts increasingly frown on companies'' efforts to keep markets separate. To avoid conflicts and problems that can arise along the channel or in the laws under which a business operates, and understanding of the various possible combinations of markets, channels, and products is essential. Sellers sending their products through both captive and independent outlets may face the problem of discrimination during periods of supply shortages or a possible "price squeeze". A company that uses separate channels to sell the same product to different markets must often deal with price differentials and contracts. Suppliers using different types of channels when selling in different geographic regions are subject to government intervention through price controls and tax differences.

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