Channel Systems

Here are three types of channel systems

1.   Vertical,

2.   Horizontal

3.   Multi channel

Vertical Marketing System

It comprises of producer, wholesaler and retailer acting as a unified system. One channel member – the channel captain owns the others or franchises them

Types

Corporate VMS

combines successive stages of production and distribution under one ownership –  Apple

Administered VMS

Successive stages of production and distribution is coordinated through the size and power of one of the members – Dominant brands secure distribution in this manner – Wal-Mart

Contractual VMS

Independent firms at different levels of production and distribution integrate their programs on a contractual basis to obtain more economies or sales impact that they could achieve alone. Its types are –

1.   Wholesaler sponsored

2.   Retailer sponsored

3.   Franchise organization

Horizontal Marketing Systems

Two or more unrelated companies put together resources or programs to exploit an emerging marketing opportunity. IOC – ICICI petro card, McDonald- Walt Disney

  Multi channel Marketing Systems

It occurs when a single firm uses two or more marketing channels to reach one or more customer segments.