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Vertical marketing systems (VMS)



Category: Marketing

So far, we have concentrated upon conventional marketing channels composed of several independent organisations, often with competing objectives and often with much room for conflict. Such consensus or conventional channels represent one extreme on a spectrum of degree of centralised control. In conventional channels there is often virtually no degree of centralised control. At the other extreme lie a range of different types of Vertical Marketing Systems (VMS) in which there is total centralised control. Between these two extreme positions is a range of partially integrated distribution systems exhibiting varying degrees of centralised control.

degree of centralised control

Varying degrees of integration in marketing channels are possible, by both forward and backward vertical integration:-

Vertical integration

Vertical integration

Vertical integration

A VMS is an extreme form of either backward or forward vertical integration

A VMS is an extreme form of either backward or forward vertical integration

Three distinct types of VMS are generally recognised:

— Administered VMS

— Contractual VMS

— Corporate VMS


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