DECADECA Travel and Tourism Practice Exam

What is a type of vertical marketing system that involves successive stages of production and distribution under single ownership?

1. Corporate VMS

2. Franchise System

3. Retail Network

4. Distribution Chain

The correct answer is: Corporate VMS

A type of vertical marketing system that involves successive stages of production and distribution under single ownership is referred to as a Corporate VMS. This system integrates different levels of the supply chain, allowing a single entity to control the entire process from production to selling to consumers. By having ownership over the various stages, such as manufacturing, wholesaling, and retailing, a company can achieve greater efficiency, streamline operations, and maintain more control over the quality and pricing of its products. For instance, if a manufacturer also owns the retail outlets that sell its products, it can better manage inventory, coordinate marketing efforts, and enhance the overall customer experience. This structure can lead to cost savings and increased profit margins as it eliminates the need for intermediary partners. Other options like a Franchise System and a Retail Network involve different business structures where ownership and control may be distributed across multiple entities. A Distribution Chain typically refers to the flow of goods through various intermediaries but does not imply single ownership over those stages. Therefore, the Corporate VMS stands out as the type that embodies the idea of a unified ownership across production and distribution phases.