Horizontal marketing: Horizontal marketing system
A horizontal marketing system is a method in which two or more businesses at the same level collaborate to carry out activities in order to achieve economies of scale. In simple terms, it is a merger or collaboration between companies that are unrelated to one another in order to capitalize on market opportunities. Horizontal marketing systems are more common in businesses that lack capital, manufacturing techniques, human resources, and marketing programs and are afraid of incurring large losses. This marketing system enables businesses to overcome all such constraints by combining their resources, allowing them to maximize their profits.Companies usually form joint ventures with large brands, which can be temporary or permanent, in order to survive in a competitive marketplace. In recent years, the horizontal market system has grown in popularity in the market because every business wants to create a positive image in order to generate large profits.
Collaboration occurs in the following ways under this market system:
Two or more manufacturers: This collaboration is formed with the goal of making efficient use of all scarce resources.
Two or more wholesalers: this is done to cover a larger area for distributing goods and services.
two or more Retailers: Retailers work together to provide products in larger quantities in a specific area.
Let"s talk about some examples of horizontal marketing:
Johnson & Johnson, a well-known healthcare company, has partnered with Google. The collaboration aims to create a robotic-assisted surgical platform. It will enable the integration of advanced technologies to improve the overall quality of health-care services.
Nike and Apple, two major brands, have collaborated to create advanced footwear of Nike+ that can be connected to an Apple iPod. The shoe plays music while also displaying information such as calories burned, distance traveled, and heart rate on the iPod screen.
As a result, a horizontal marketing system allows two or more companies to collaborate and capitalize on each other's expertise, allowing them to capture a larger market share. It enables businesses to reduce their overall costs by achieving economies of scale, which supports profit maximization.
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