A group of small grocery shops forms a new business entity to buy products directly from manufacturers. The group buys products in bulk that are then distributed among members. This helps the shops obtain better profit margins. Which of the following types of vertical marketing systems can be observed here?
A) contractual
B) corporate
C) administered
D) controlled
E) regulatory

Question

Quizplus · Accepted Answer

This scenario describes a contractual vertical marketing system, where independent firms at different levels of production and distribution join together through contracts to achieve economies of scale, thereby improving their profit margins.

A Group of Small Grocery Shops Forms a New Business