When channel members are linked by legal agreements that specify each member's rights and responsibilities, ____ exists.
A. a corporate VMS
B. a channel captain
C. an administered VMS
D. a contractual VMS
E. horizontal channel integration
A contractual VMS is a Vertical Marketing System that is formed by the individual firms operating at different channel layers.
Has integrated operations at a contractual basis and each layer helps in the achievement of the economy of scale by the integration of their operations.
Hence they share their rights and responsibilities be it the producer, the wholesaler, or the retailer thus having all the elements of production and distribution channel fall in a single ownership in their legal agreements.
