What Are Vertical-horizontal Marketing Systems and How Are They Classified?

What Are Vertical-horizontal Marketing Systems and How Are They Classified?

Marketing is a very important factor in companies and different organizations, since it is not only used to generate sales. If not, at the end of the day, it takes into consideration what the public to whom the product or service offered is directed to.

In other words, it helps to better meet people’s needs and wants. Generating with it a greater experience, hence the importance of the systems that are applied for it.

What is the official definition of marketing systems?

For sure, there is no precise concept that makes it easier for us to understand these systems. Since both words separately have their own meaning , while when put together they manage to define themselves much better. However, in marketing there have been numerous authors recognized for their contributions and studies in this field. And therefore, the definition obtained is varied.

The term system is a set of parts that interact and relate to each other . To achieve certain purposes or objectives in common, it can be the structure of an organization . While, marketing is what is responsible for the production, price, promotion and distribution of products or services. This based on the tastes or preferences of consumers.

Therefore, marketing systems manage to be those that collect information, do customer analysis, project and apply subjectivity. So that corporations can provide greater and better attention to the public , creating different channels and strategies that allow the desired ends to be achieved.

What is the difference between vertical and horizontal marketing systems?

vertical and horizontal marketing systems

The variations between these two types of marketing systems are very marked, since both allow to obtain very similar results . But the way of operating is different and that is the first difference. On the one hand, in vertical marketing it can be seen that the strategies are more focused and defined to a target audience.

Whereas, in horizontal marketing, they try to address a much larger population . Including the target market, but also others that are associated with it. Success in sales is closely related to this type of marketing, transaction processing systems , among other aspects.

Another distinctive factor is that the vertical handles or works jointly with three components . Which are the manufacturer, the wholesaler and the retailer, for its part, the horizontal focuses on only one of them.

In addition to this, among the discrepancies that exist in both systems, there is the particularity of competition. That is, the vertical system competes with each other to seize the market it seeks to serve. While the horizontal does not care about competing. If not, it focuses on a cooperative technique to obtain the benefit among all market participants.

How are the different types of marketing system classified?

Each of the two systems that we have mentioned, is classified or subdivided into other classes or categories. It all depends a lot on the focus on how we want to reach the end user. Also of the characteristics of the product (defines the marketing system to use), the market that you want to cover.

In this sense, we will mention how each of the systems are classified. It does not matter if it is vertical or horizontal, since they have their own classification. Next, we specify what they are , when you should use them and how you can apply them to your company.

Types of Vertical Marketing Systems

In this case, three main types can be identified , which are contractual, administrative and corporate. Starting from the first case, referring to a vertical system of a contractual type.

Which, it is understood that they are those strategies that manage to coordinate the entire chain of production and sale of what is offered. This implies, from the manufacturing process to the way it should be sold, a clear example of this is franchises.

On the other hand, we find the administrative type. Which specifies that one of the members of the vertical chain is dominant or exercises a certain leadership over the other components. As an example, it is a place similar to Walmart, which requires small producers how they want the products to sell.

While, the corporate vertical system indicates that all the components of the chain are made by the same company. In other words, it would be this one who produces, distributes and dispatches to the final consumer . For example, Apple, which manufactures and sells its products in authorized stores. In general, knowing what Marketing is and its strategies are fundamental pillars in the success of any company.

Horizontal Marketing Classification

For its part, this system does not have a classification as such. Since it is based on a type of strategy that generates the most profit, in general, it is what is known as the creation of synergy . Although, this same can be achieved through some types of alliance, here we will tell you what they are.

The most common is that there is mutual cooperation between two or more companies in the same sector. In order to cover as much of the market demand as possible. This alliance improves sales and more equitable participation of the companies, as long as they are of equal size.

Links may also exist between wholesalers or retailers in the chain, in order to achieve mutual benefits and better distribution of products. In the same way, new companies could even be created, thus achieving greater advantages for all.

What is the type of marketing system that you should use in your company?

There is no single formula to know which of the marketing approaches you need to apply in your company. This may vary depending on the objectives that you set as a company.

For example, if you want to reach people who do not know you, cover more market or introduce functions. Then you must go through the horizontal . Although if you want to minimize costs in the chain, it would be better to use the vertical.

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