There are three different types of vertical marketing systems : a corporate system , a contractual system , and an administered system .
VMS Types . There are three major types of VMS: corporate, administered and contractual .
a system of distribution channel organisation in which the orderly flow of products from producer to end-user is controlled by common ownership of the different levels of the system .
“The main advantage of VMS is that your company can control all of the elements of producing and selling a product. In this way, you are able to see the whole picture, anticipate problems, make changes as they become necessary, and thus increase your efficiency .
Broad examples of vertical markets are insurance, real estate, banking, heavy manufacturing, retail, transportation, hospitals and government.
A vertical market is one in which all of your customers are in one particular industry , regardless of where in the food chain they are. A horizontal market is one in which all of your customers use your product to do the same thing, regardless of what industry they are in.
When professionals talk about industries , they are referring to a broad group of companies that operate in the same general space. An industry vertical , however, is more specific and describes a group of companies that focus on a shared niche or specialized market spanning multiple industries .
There are basically 4 types of marketing channels : direct selling; selling through intermediaries; dual distribution ; and reverse channels .
A marketing system is a set of procedures and practices that allows companies, including corporations, to market their products and services. The marketing system defines how the company accomplishes its marketing tasks, including advertising, promotion and sales.
A horizontal conflict refers to a disagreement among two or more channel members at the same level. For example, suppose a toy manufacturer has deals with two wholesalers, each contracted to sell products to retailers in different regions.
The three types of vertical marketing systems are contractual, corporate and Administered.
While members of a conventional distribution channel seek to maximize their own profits, members of a vertical marketing system all cooperate because either one member owns the others, one has contracts with the others, or one wields more power than the others.
A distribution channel represents a chain of businesses or intermediaries through which the final buyer purchases a good or service. Distribution channels include wholesalers, retailers, distributors, and the Internet. In a direct distribution channel , the manufacturer sells directly to the consumer.
Backward Integration. When a retailer owns a manufacturing operation .
Under a conventional system, each piece in the distribution channel functions as an independent business and tries to increase its own profits, often at the expense of other businesses in the channel . Vertical marketing systems help to reduce these kinds of conflicts to the mutual benefit all parties.