Introduction

The business world has been very dynamic in the recent years as a result of increased globalization and enhanced technological advances. Consequently, many businesses in the last few years have embraced the need to conduct their businesses electronically (Mohr, Sengupta, & Slater, 2010). As a result, the issue of e-commerce has become an important aspect of the modern business. The most prevalent forms of e-commerce include Business-to-business (B2B), Business-to-consumer (B2C), Consumer-to-Business (C2B) and Business-to-Business-to-Consumer (B2B2C). All of these firms may opt to either use vertical or horizontal marketing strategy in their attempts to enhance their productivity as well as their profitability.  A vertical market mainly focuses on a specific industry or a market. In essence, a vertical market model deals with a single segment of products (Cant, 2006). On the other hand, horizontal market concentrates on a particular business function or a business process. In essence, horizontal marketing model mainly focuses on a single target that shares other characteristics. In this paper, we will have an analysis of both vertical and horizontal marketing using case studies of different e-commerce companies. Essential aspects of these strategies will be discussed at length and also make recommendations on the necessary improvements to make the different companies maximize their potential.

Horizontal market

As mentioned earlier, horizontal market mainly focuses on a particular function or business process. It is prudent to note that a horizontal market is not industry specific, and the company can market their products or services to customers in different industries (Hair, 2013). The collaboration between Apple and Starbucks is a good example of a horizontal marketing strategy. The cooperation between these firms allows Starbucks Wifi users to download and buy songs from Apple Itunes store. As a result of this strategy, the company has been able to increase the sales of its Itunes as it benefits from the great number of loyal customers owned by Starbucks. It is essential to point out that Starbucks has millions of loyal customers who take their time to visit and enjoy the Starbucks experience (Mohr, Sengupta, & Slater, 2010). Over the years, Apple has registered improvement in Itunes sales, and much of these improvements can be attributed to the strategic alliance with Starbucks. For example, when Apple introduced its iTunes stores, it hoped to sell one million songs in half a year. However, to their surprise, the company made over one million sales in its first six days of the Itunes sales. The collaboration with Starbucks can explain these fast developments.

It is prudent to note that a horizontal marketing strategy must involve companies that will gain synergy after alliance. For instance, Apple has maintained a leading role in digital music while Starbuck enjoys a good number of loyal customers. The combination of these two companies has been able to give their clients a world class digital music experience (Keillor, 2007). It is prudent to understand that the alliance is not only beneficial Apple but is also of great importance to Starbucks. The two firms have benefited from increased sales, an increase in market share as well as enhanced customer loyalty.  It is essential to note that the collaboration between the two companies has offered a new market opportunity for the two companies. In essence, Starbucks and Apple have achieved greater success which they would not have achieved if not for the horizontal alliance.

Vertical market

Unlike the horizontal marketing, where firms target customers from different companies and different industries, Vertical marketing targets a market exclusively from a specific industry. In most cases, companies will opt for a vertical marketing strategy to either create products intended for a specific group of consumers or in an attempt to make the existing products more appealing to the consumers. Also, players in a vertical market seek to offer solutions to similar problems with overlapping focuses of the products and services offered to their target market. In essence, vertical markets organize their businesses based on their specialized needs (Malhotra & Majchrzak, 2014). Altra Energy Technologies is a good example of an e-commerce industry where vertical marketing strategy is evident. It is a leading online technology marketplace that recently agreed to an alliance with Epicentric Inc. to enable a vertical market.  Epicentric Inc, on the other hand, is a young technology company that has just ventured into the market and is aware that only an alliance with an established organization will help in the realization of a successful business. The alliance between the two companies will let energy companies set up their privately branded portals, and this will eventually lead to increased synergy.

The alliance between Altra Energy and Epicentric Inc could be seen as an advantage to the young software company. This is because Epicentric Inc will have access to Altra Energy contacts which will serve to increase the firm’s market. This form of vertical marketing strategy mainly pursues indirect sales channels that help in market expansion and is critical for such a young company like Epicentric. Vertical marketing approach has been essential to Epicentric Inc in its attempts to become an established e-commerce company. As a startup company, the speed at which it expands its footprint is of critical importance to the success of the company now and in the future. Use of direct sales may not be a good strategy for a firm that intends to grow rapidly, and hence, indirect sales play a significant part in realizing this objective. The alliance between these two firms will enable their customers to get real-time information on matters relating to prices, news, weather reports, and energy consumption. Development of private sites from the portal will enable enhanced customer and employee attention from the individual firms. The collaboration between the two companies has also lead to reduced overhead costs per company since there will be cost sharing especially when it comes to the employees’ salaries.

Recommendations and justifications

Both vertical and horizontal marketing strategy can be essential for success in e-commerce. Nevertheless, the players in e-commerce must be proactive to ensure that this strategic approach meets the goals of the firm. For instance, in this case, Apple Inc can use the approach used by Altra Energy Technologies to improve its horizontal marketing strategy. On the other hand, Altra Energy can adopt some elements used by Apple in its vertical marketing and improve the success of its strategy (Cant, 2006).  In essence, the effectiveness of either vertical or horizontal marketing will highly depend on planning and implementation.

For example, an indirect sale is one of the most notable elements in the vertical marketing strategy that Apple should utilize to enhance its performance. It is evident that the Altra Energy and Epicentric Inc collaboration has created a favorable environment that allows for indirect sales.  It is important to point out that if a firm is using direct sales as its distribution channel, then it may not be sale fast enough, and the company may fail to reach its maximum.  Although Apple and Starbucks are internationally recognized brands, indirect sales of Apple’s Itunes will register increased sales (Solomon & Stuart, 2001). Overreliance on the Starbucks as the only market place for the Itunes will hinder the firm from achieving its potential. It is, therefore, recommendable for the Apple-Starbuck collaboration to consider incorporation of indirect sales to enable them to achieve their maximum potential.

On the other hand, the Epicentric-Altra Energy collaboration can have something to adopt from the Apple-Starbucks collaboration. It is important to note that the marketing strategy used by Apple is considerate of internationally recognized brands. Apple’s digital music is internationally recognized brand while Starbucks experience is also recognized internationally. This has therefore made it easy for these two entities to get the desired levels of synergy. Collaboration with an already established brand will enable a new firm to achieve rapid growth and perpetuity (Solomon & Stuart, 2001). For instance, it is said that Apple hoped to sell one million songs within half a year. Nevertheless, this target was achieved within its first six days after the collaboration with the Starbucks. Although Altra Energy Technologies is not a small firm, it would be recommended that Epicentric Inc looks for a more established entity that will help achieve the organizational goals and objectives. Every organization’s goal is to maximize profits and business growth, and this will only be achieved through the appropriate marketing strategies that will ensure business synergy.

Conclusion

In a nutshell, the business world has become dynamic and competitive in the recent years. Increased globalization and technological effects have played a significant role in this experience. Nevertheless, the firms have strived to remain competitive and profitable in these markets. One of the most notable trends is increased popularity in e-commerce where most businesses, including retail firms, have embraced the use of the internet to conduct their daily business (Hair, 2013). Consequently, vertical and horizontal marketing strategies have become rampant in the business world as firms try to achieve a competitive edge and cut on operational costs.   It is essential to note that the decision between vertical or horizontal marketing strategies will determine the firm’s operating strategy (Keillor, 2007). Therefore, it is prudent for the players in e-commerce industry to ensure that all the decisions they make will lead to the ultimate goal of increasing efficiency and productivity of the firm.

References

Cant, M. (2006). Marketing management. Cape Town, South Africa: Juta.

Fisk, R., Grove, S., & John, J. (2014). Services marketing. Mason, Ohio: South-Western.

Hair, J. (2013). Essentials of marketing research. New York, NY: McGraw-Hill/Irwin.

Keillor, B. (2007). Marketing in the 21st century. Westport, Conn.: Praeger.

Malhotra, A. & Majchrzak, A. (2014). Enhancing performance of geographically distributed teams through targeted use of information and communication technologies. Human Relations, 67(4), 389-411. http://dx.doi.org/10.1177/0018726713495284

Solomon, M. & Stuart, E. (2001). The brave new world of e-commerce. Upper Saddle River, NJ: Prentice Hall.

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