What is an Administered Vertical Marketing System?
An administered vertical marketing system is an arrangement of different participants in a distribution channel that work together to achieve common objectives. It is characterized by a single channel member taking responsibility for the coordination of the other members in the system. This is in contrast to an independent vertical marketing system, where participants are not as closely connected. An administered vertical marketing system can be beneficial to all members involved. It allows the channel members to share risks and to maximize the efficiency and effectiveness of the channel. There are various types of administered vertical marketing system, each with its own advantages and disadvantages.
Types of Administered Vertical Marketing System
- Corporate VMS: In a corporate VMS, one company takes control of the whole channel. This company is usually the manufacturer, but it could also be a wholesaler or retailer.
- Contractual VMS: In a contractual VMS, one or more channel members enter into an agreement with one another to coordinate and control activities in the channel.
- Administered Hierarchy VMS: In an administered hierarchy VMS, one channel member takes control of the channel, but other channel members can still be independent.
Benefits of an Administered Vertical Marketing System
An administered vertical marketing system can offer a number of benefits to channel members. Some of the main benefits include:
- The channel is more efficient, as it is coordinated by one channel member.
- Channel members have less risk, as the channel is coordinated and managed by one member.
- Channel members can share resources and expertise to maximize their profits.
- It allows for more control over the channel, which can help to reduce conflicts between channel members.
- It can lead to greater customer satisfaction, as the channel is better coordinated and managed.
Conclusion
An administered vertical marketing system can be beneficial to all members involved. It allows the channel members to share risks and to maximize the efficiency and effectiveness of the channel. There are various types of administered vertical marketing system, each with its own advantages and disadvantages. For more information on administered vertical marketing systems, please visit the following websites: