Vertical Marketing Systems

Vertical marketing systems
planned channel system designed to improve distribution efficiency and cost-effectiveness by integrating various functions throughout the distribution chain
forward integration
process through which a firm attempts to control downstream integration
backward integration
process through which a manufacturer attempts to gain greater control over inputs in its production process, such as raw materials
corporate marketing systems
VMS in which a single owner operates the entire marketing channel
administered marketing system
VMS that achieves channel coordination when a dominant channel member exercises his power
contractual marketing system
VMS that coordinates channel activities through formal agreements among participants
retail cooperative
group of retailers that establisha shared wholesaling operation to help them compete with chains
contractual agreement in which a wholesaler or retailer agrees to meet the operating requirements of a manufacturer or other franchiser
supply chain
control of the activities of purchasing, processing, delivery through which raw materials are transformed into products and made available to final customers
upstream management
controlling part of the supply chain that involves raw materials, inbound logistics, and warehouse and storage facilities
downstream management
controlling part of the supply chain that involves finished product storage, outbound logistics, marketing and sales, and customer service
Radio frequency identification
technology that uses a tiny chip with identification information that can be read by a scanner using radio waves from a distance
enterprise resource planning system
software system that consolidates data from among a firm’s various business units
third-party (contract) logistics firms
company that specializes in handling logistics activities for other firms

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