In tional industries, there are three common forms of vertical marketing sys in tems: corporate, administered, and contractual.
-Corporate Vertical Marketing Systems
A corporate vertical marketing system combines both the production and distribu corporate vertical system combines both the production achieve tion marketing Companies can of a product or under one corporate umbrella. this result by integrating either forward or depending on their position in backward, channel from which they evolve, Strauss, example, was originally a manu- facturer of clothes. The company creared a corporate vertical marketing system by stores to sell its merchandise. integrating forward and opening its own retail A similar strategy has been used by the University of Michigan Hospitals o Ann Ar bor. This tertiary center has almost 30 locations around the state of Michigan outside of Ann Arbor .
FIGURE 10-3 shows several alternative vertical marketing systems. 10-4 examples of several vertical marketing systems being developed in health care. These called integrated delivery systems coordinate and de- liver care at the needed level of intensity. One such system, referred to as a closed health system model, is composed of physicians, hospitals, and an insurer who are all vertically integrated into one system so that functions are delivered at the optimum point and centrally managed.
In Miami, Florida, Affiliated Health Providers consists of eight hospitals with multiple physician group practices. This network plans to contract with several in surers to be able to assume risk.12 This enables the network, in conjunction with the insurance companies, to act as a prepaid health care plan. The physicians in the hos- pital will be responsible for managing the care and will accept the premiums for the coverage of that care from subscribers. This arrangement is represented in Figure 10- 4 as the closed health system.