vertical market system (VMS) |
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Definition
Formally or informally coordinated distribution channel where its independent members work together to achieve greater efficiency and economies of scale, and to eliminate channel-conflict arising out of disparate individual objectives. Three common types of VMS are: (1) Administered: coordination between production and distribution firms is achieved by the size and influence of the dominant firm, without a formal agreement or ownership. (2) Contractual: independent production and distribution firms formally agree to integrate their resources. Franchising is an example of this type. (3) Corporate: production firm owns a retail chain (forward integration) or a retail chain owns a production firm (backward integration).
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vertical market system (VMS) is in the Advertising, Marketing, & Sales and Distribution & Logistics subjects.
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