Dynamics of Marketing Distribution Channels

Just as the science of marketing are constantly evolving and dynamic distribution channel continues to evolve along with the emergence of many new channels system. Marketing system that has developed a marketing system that is vertical, horizontal, and multi-channel.

Vertical Marketing System
Vertical Marketing System (VMS) is comprised of manufacturers, wholesalers, and retailers, which is an integrated system and they work together. There are three types of Vertical Marketing System (VMS), namely corporate, and contract administration.

1. Corporate VMS combines a series of stages of production and distribution under single ownership. Vertical integration can be achieved by integration backwards or forwards. Examples of corporate VMS is a Giant Food Stores which operates the ice making facilities, bottling soft drinks, and bakery and then supplied to the Giant store. So they make and also have a shop to sell their products.

2. VMS administration, coordinating a series of stages of production and distribution not through common ownership, but through the great and the power of either party. So powerful producers can preserve a strong partnership that has the support of the retailer. For example the brand Kodak, Gillette is an example of products that simply dominates the market.

3. VMS contract, an independent company in the production and distribution of different merge programs based on an agreement that is more profitable than doing it yourself. Corporate VMS is divided into three types, namely: network-sponsored voluntary wholesalers. Cooperative retailers and franchise organizations wholesaler-sponsored voluntary help wholesalers to compete effectively with larger organizational network. Cooperative retailers is the place of purchase by members of the product that will provide a return in accordance with the amount of purchase. The third VMS contract is a franchise organization. Development of the franchise is very fast at this time as many fast food restaurants that come from abroad. This franchise has three forms, namely the manufacturer-sponsored retailer franchise, like Ford is giving license to the dealers to sell cars. Second is the wholesaler-sponsored franchise manufacturers such as coca cola bottling entitling the purchase cider syrup to be sold to local retailers. Third-sponsored retailer franchise services company.

Horizontal marketing system
Horizontal marketing system occurs when there are two or more firms that do not relate to use of resources together to gain an advantage in the marketplace. These forms of cooperation such as joint venture.

Multi-channel marketing system
Since the development of an increasingly large segment of the market, many companies use multiple marketing channels or multi-channel marketing. Benefit from the use of many channels is increased market coverage, reduced cost of distribution, and sales are increasingly focused on the customer. In addition to the benefits, there are also disadvantages such as the emergence of conflict between the channel and an increasingly difficult to control. To resolve the conflict, the company can use different channels to target customers for example, direct sales to large customers while telemarketing to customers being.