A marketing channel in which multiple segments are owned by the parent company is known as a(n)

• A. Contractual vertical marketing system
• B. Administered vertical marketing system
• C. Corporate vertical marketing system
• D. Franchised vertical marketing system

Answer: (C)

Ownership and control across different stages of a distribution channel define a corporate vertical marketing system. In this setup, the parent company owns multiple levels of the channel—manufacturing, distribution, and even retail—so planning and operations are tightly coordinated under a single organization. This yields stronger alignment, faster decision making, cost savings from economies of scale, and reduced channel conflict because everyone shares the same ownership.

The other forms rely on contracts or influence rather than ownership. A contractual vertical marketing system involves independent firms at different levels that work together through contracts or licenses to achieve scale, but no single company owns multiple levels. An administered vertical marketing system is controlled by one powerful channel member through influence rather than ownership. A franchised vertical marketing system involves a franchisor and franchisees operating under the brand, with ownership spread across different entities. Since ownership of multiple channel levels is the hallmark here, the correct term is corporate vertical marketing system.