Vertical marketing channel-systems, in which the whole channel focuses on the same target market at the end of the channel, could best be described as which of the following?
A. A corporate channel system
B. An administered channel system
C. A contractual channel system
D. It could be described by both (A) and (B).
E. It could be described by (A), (B), or (C).
Answer: (E) Vertical marketing channels of distribution can be a corporate channel (A) where the corporation owns the entire channel of distribution. However, this is not the best response. It can be an administered channel (B) where the channel members informally agree on which services the channel members will perform; however, this is not the most correct response. A vertical channel system could also be contractual (C) where the members agree, by contract, to cooperate with each other, and also which functions should be provided by each of the members. This, however, is not the most correct response. (D) is true, both corporate channels and administered channels could provide or develop a vertical channel system, however, so could a system under contract, which (D) leaves out. Thus, this is not the best response.