Which vertical marketing system gives complete power to the parent company?

Which vertical marketing system gives complete power to the parent company?

• A. Administrative VMS
• B. Corporate
• C. Franchise-based VMS
• D. Contractual VMS

Answer: (B)

Ownership and control determine who directs channel activities. The corporate VMS gives the parent company complete power because the entire channel—in manufacturing, distribution, and retail—is owned and managed under a single corporate umbrella. With ownership across all stages, the parent can unilaterally set policies, pricing, and distribution practices without needing consent from independent partners. Other forms rely on influence or contractual agreements rather than ownership, so control is not centralized. Administered VMS relies on the size or influence of one member, while contractual and franchise-based systems bind independent operators through contracts, leaving some autonomy to those members. So, only the corporate VMS places full authority in the hands of the parent company.

Ownership and control determine who directs channel activities. The corporate VMS gives the parent company complete power because the entire channel—in manufacturing, distribution, and retail—is owned and managed under a single corporate umbrella. With ownership across all stages, the parent can unilaterally set policies, pricing, and distribution practices without needing consent from independent partners. Other forms rely on influence or contractual agreements rather than ownership, so control is not centralized. Administered VMS relies on the size or influence of one member, while contractual and franchise-based systems bind independent operators through contracts, leaving some autonomy to those members. So, only the corporate VMS places full authority in the hands of the parent company.