Contractual VMS
Category: Marketing
More concerted co ordination is possible if there is a contractual agreement. Several variants have been developed.
The Co-operative Movement represents a very particular kind of contractual VMS. Owned by its customers the Co-op has its own supply organisation which even does some manufacturing and farming.
Voluntary associations between intermediaries are attempts by independent firms to gain some of the advantages enjoyed by multiple chains in terms of buying power promotion of store image and increased professionalism in some aspects of management. Examples in groceries include Spar, VG and Wavy Line, and there are similar organisations in many other branches of retailing.
Voluntary associations in the service sector include hotel marketing consortia.
Franchise systems usually involve a more rigorous contractual arrangement and can cover a complete trading format sometimes with strictly enforced requirements on operations and sourcing. During the 1980s there was rapid growth in the number of franchise arrangements in the UK.