Horizontal marketing system is a distribution channel arrangement whereby two or more organizations at the same level join together for marketing purposes to capitalize on a new opportunity. For example: a bank and a supermarket agree to have the bank’s ATMs located at the supermarket’s locations, two manufacturers combining to achieve economies of scale, otherwise not possible with each acting alone, in meeting the needs and demands of a very large retailer, or two wholesalers joining together to serve a particular region at a certain time of year.
According to business dictionary.com: Horizontal
Marketing System is a merger of firms on the same level in order to pursue
marketing opportunities. The firms combine their resources such as production
capabilities and distribution in order to maximize their earnings potential.
Example: A real time example is of Apple and Starbucks
announced music partnership in 2007. The purpose of this partnership was to
allow Starbucks customers to wirelessly browse, search for, preview, buy, and
download music from iTunes Music Store onto their iPod touch, iPhone, or PC or
Mac running iTunes. Apple’s leadership in digital music together with the
unique Starbucks experience synergized a partnership to offer customers a world
class digital music experience.
Q: Distinguish between Horizontal and Vertical Marketing System
In conventional marketing systems, businesses can run into conflicts, as each of the firms in the supply chain aims to maximize its profits on the expense of the others. This can subsequently reduce profits for the entire sector. Vertical and horizontal marketing systems help to address this problem. In the horizontal marketing system, members at the same level in the supply chain come together in alliances or joint ventures to pursue a new marketing opportunity