Where, then, is the retailer to look if he wants to mark out a field for himself in which he will have some advantage over his competitors? He cannot go far in the direction of manufacturing on his own account (vertical integration upwards) unless he is in a very big way of business indeed. And even if he were, conceivably, big enough as a manufacturer to stock up entirely with his own merchandise, he would still be lacking in one essential item -consumer choice, that is, competitors products!

In this battle for the initiative, the manufacturer would seem to have the upper hand -at any rate the big mass-producing manufacturer whose product is among the leading brands. For in this category of merchandise the retailer is forced, in his own commercial interests, to stock the manufacturers`s brand. This statement must be modified, of course, according to the product field concernerd. In furniture and leather goods, for instance, there is still considerable scope for the exercise or merchanting skill, for selling service and personal “know-how”. In other fields, where branding is well-look in other directions to find competitive advantage -such as the position of the shop, service diversification, price competition, or a combination of all these, together with a succesfull measure of “own-branding”.

One can say, therefore, that vertical integration of this kind is less influential than one might suppose. For the most part, the pattern is for the retailer, or retail chain, to buy their stock from manufacturers direct, or from wholesale distributors either acting merchants in their own right or as manufacturer`s agents.

In this situation, with the retailer able to act as a freelance merchant (that is buying on his own account and holding stock at his own risk) the manufacturer is led to try to arrange matters so that the retailer is virtually forced to stock his product. He does this by establishing a strong brand, that is, persuading the public to demand that product in the shop. Further than this, the manufacturer, by means of mass communications, establishes a brand loyalty as a direct relationship between the consumer and himself -with the result that the retailer initiative in the matter is reduced to the minimum.