A vertical marketing system (VMS) is one in which the main members of a distribution channel - producer, wholesaler, and retailer work together as a unified group in order to meet consumer needs. Horizontal Marketing System is a merger of firms on the same level in order to pursue marketing opportunities. By working together, companies can combine their capital, production capabilities, or marketing resources to accomplish more than any one company could alone.

1. Vertical and Horizontal
Marketing System
Presented by:
Priya Soni
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2. Vertical Marketing system
A vertical marketing system (VMS) is one in
which the main members of a distribution
channel - producer, wholesaler, and retailer
work together as a unified group in order to
meet consumer needs.
Vertical marketing systems can take several
forms :
•Corporate VMS
•Administered VMS
•Contractual VMS
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3. Vertical Marketing system
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4. Advantages of VMS
• Eliminate competition and conflict
• A centralized management has direct
control over all aspects of the business
• Provide clear lines of authority and a tight
span of control as a company can control
all of the elements of producing and selling
a product, which can lead to high operating
efficiency.
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5. Disadvantages of VMS
• Employees at the bottom of a vertical structure
may feel less valued than those higher up in
the chain.
• It can also take a great deal of time for top
management decisions to filter down through
multiple layers, reducing the organization's
ability to react quickly to a rapidly changing
business climate.
• Because of the centralized control of power,
weak leadership at the top can hamper the
effectiveness of the entire organization.
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6. Horizontal Marketing system
Horizontal Marketing System is a merger of
firms on the same level in order to pursue
marketing opportunities.
By working together, companies can combine
their capital, production capabilities, or
marketing resources to accomplish more than
any one company could alone.
Companies might join forces with competitors or
non-competitors. They might work with each
other on a temporary or permanent basis, or
they may create a separate company.
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7. Horizontal Marketing system
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8. Advantages of HMS
•Employees may attain greater satisfaction in a
horizontal structure due to greater freedom and
autonomy.
•The use of cross-function teams can also lead to high
levels of cooperation throughout the organization.
•The heavy emphasis on innovation can lead to better
ideas that keep the organization ahead of the
competition.
•The absence of multiple structural layers provides
streamlined communication and reporting processes,
making the organization more flexible and adaptable
to change.
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9. Disadvantages of HMS
• The decentralized structure could lead to a
"loose ship," as the team and project leaders
have high levels of responsibility for achieving
results but little real authority over their team
members.
• A resulting lack of control can lead to finger-
pointing when things go awry, which can
hinder productivity.
• Organizations attempting to convert from a
vertical to a horizontal structure can face
challenges, as management needs to adjust to
a less authoritarian and a more peer-like
relationship with subordinates.
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