Vertical Marketing: Vertical marketing system

Vertical marketing is a marketing in which vendors offer goods and services specific to an industry, trade, profession, or other group of customers with specialized needs. Imagine that 3 different companies: company A - a manufacturer, company B - a wholesaler, and company C - a retailer make many purchases with each other. However, the logistics work between A and B companies is performed by another company, and the logistics work between B and C companies is performed by another company. In this case, the service quality and prices of those logistics companies are different. Later, these 3 companies - A, B, C decide to systematically cooperate. So, if they cooperated with 2 logistics companies before, now they start working with only one logistics company. In such a case, the orders received by that logistics company doubles, and that company naturally starts offering services to the mentioned companies at lower price.
From these short examples of 3 companies, we saw that the systematic cooperation of those companies had a positive effect on their costs and reduced the cost of the final product. This in itself means a more profitable result. That is, as a result of these collaborations, they can become more competitive by reducing the price of the final product they present on the market.
In our previous videos, we have talked about some topics related to marketing and marketing. Marketing performs a number of important functions such as introducing and selling the product to the buyer. Today's topic is also related to marketing.
In simple terms, marketing is a tool to deliver the product to the user. The paths through which the product is produced until it reaches the consumer are called marketing channels. For example, the manufacturer of a product, the company that sells it wholesale, and finally the company that retails to the consumer are all considered part of this marketing channel.
Those marketing channels mainly come in two forms: traditional or horizontal and vertical marketing systems.
The main topic of today's video is the vertical marketing system. Simply put, a vertical marketing system is when companies that produce products in the same market work together to deliver the product to the buyer. The components of this system are the manufacturer, distributor and retailer of the product. The manufacturer produces the product, the distributor buys the product from the manufacturer and distributes it to the retailers, and finally the retailers transfer the product to the consumer. All three companies work together to maximize their profits. I should also note that the term distributor, which I used earlier, and which you will hear frequently throughout the video, refers to companies that engage in the wholesale sale of products.
It should also be noted that there are three types of vertical marketing system. The first of these is the corporate vertical marketing system. In this vertical marketing system, one participant of the marketing channel controls the whole process himself. That is, the process of product production, market distribution and retail sale is managed by just one center. For example, let's take a look at "ZARA", which has made its owner a billionaire and is one of the most famous clothing brands in the world. This $14.7 billion company uses a corporate vertical marketing system. There are approximately 3,000 ZARA stores around the world. The products sold in these stores are first designed in the center in Spain, and then the production process begins. The products produced are still distributed by "ZARA" to its official stores. In the end, those products are delivered to the buyer through ZARA's own stores. As you can see, all processes are managed by a center. This makes ZARA a suitable example of a corporate vertical marketing system.
Another vertical marketing system is the contractual system. In this system, which is called a contractual vertical marketing system, each of the companies involved in the production, distribution and retail sales manage themselves separately. But all three try to increase their income by acting together according to the agreement between them. Franchise companies work under this type of vertical marketing system. If I explain franchising in the shortest way, I can say that franchising is a license, rights and information about the working mechanism of this business given by one business party to another party to establish this business elsewhere. For example, the Hilton hotel, which has branches in many countries, is an example of franchising. If you want to open a Hilton hotel, you can get a license by paying $75,000. In addition, if the number of rooms in the hotel you open is more than 250, you must pay $400 for each additional room.
#marketing #verticalmarketing #vertical marketing system
🚀 Explore Your Industry-Specific Marketing Course: easymarketings...

[@easymarketingfree]

🚀 Explore Your Industry-Specific Marketing Course: easymarketingschool.org/courses/

[@gawni1612]

dude thank you for helping me with my homework

[@easymarketingfree]

You are welcome! We will post new videos every week! You can help our channel and your colleagues by sharing our channel with your classmates

[@qoqoboyy]

thanks it helped me understand it better than what my teacher explained

[@easymarketingfree]

Thanks! Keep going 💪🏻💪🏻💪🏻

[@sabkuchkrtahu4322]

couldnt find a nice video on the topic till i saw this . ty

[@easymarketingfree]

Thanks a lot!