DECADECA Travel and Tourism Practice Exam

What type of marketing system involves independent firms joining through contracts to enhance economies or sales impact?

1. Vertical Marketing System

2. Corporate Structure

3. Distribution Network

4. Horizontal Marketing System

The correct answer is: Vertical Marketing System

The type of marketing system that involves independent firms joining through contracts to enhance economies or sales impact is known as a Vertical Marketing System. This system is characterized by the collaboration between different levels of the production and distribution process. It includes manufacturers, wholesalers, and retailers who work together towards a common goal, often leading to reduced costs, improved efficiencies, and better coordination in the supply chain. In a Vertical Marketing System, the firms maintain their independence but are interconnected in a way that allows them to leverage resources, share information, and stay aligned in their marketing and sales strategies. This collective effort helps to streamline operations and can lead to competitive advantages in the marketplace. For instance, in a retail context, a manufacturer may coordinate closely with retailers to create promotional strategies that benefit both parties, which ultimately drives consumer sales. This collaborative approach is distinct from other types of systems that do not emphasize this level of inter-firm cooperation and coordination.