Collaboration is the key to success in the business world. A marketing system allows companies to work together to achieve their common goals. The concept of a horizontal marketing system (HMS) is one such system, in particular, that facilitates collaboration among companies in the same industry.
What Is a Horizontal Marketing System?
An HMS is a marketing system in which two or several companies at the same level of the supply chain work together to promote and sell products or services to a target market. In an HMS, companies share resources, knowledge, and expertise to achieve common goals. The companies in an HMS may be competitors, but they recognize that working together can achieve greater success than working alone.
How Does an HMS Work?
In an HMS, companies collaborate in various ways to promote their products or services. They may jointly develop and implement marketing strategies, share distribution channels, or pool resources to create new products or services. The objective is to make a seamless experience for the consumer and improve the efficiency of the supply chain.
An HMS requires a high level of trust and cooperation among the companies involved. The companies must be willing to work together and share information openly. Communication is critical in an HMS, and there must be clear lines of it among the companies involved.
Examples of HMS in Action
Airlines work together to create a seamless experience for travelers. They share resources such as airport lounges, baggage handling, and flight routes to provide a better experience for their customers. Airlines also collaborate on marketing campaigns to promote travel to specific destinations. They offer loyalty programs that allow customers to earn points with one airline and redeem them with another.
2. Fast Food Chains
Fast food chains can be considered an HMS because they often operate in shared locations such as malls or rest stops. They also share resources like suppliers, delivery services, and marketing strategies. This collaboration allows them to create a better supply chain and provide customers with a broader range of food options.
Retailers, such as clothing or electronics manufacturers, commonly use the same suppliers for their products—the two team up for marketing strategies, like seasonal sales, to reach a wider audience. By doing so, retailers can streamline their supply chain and provide more cost-effective options for their clients.
Benefits of an HMS
- Increased Market Penetration: When businesses work together, they can expand their customer base and grow their portion of the market.
- Resource Sharing: Companies can share advertising costs, distribution channels, and technology, leading to cost savings and increased efficiency.
- Increased Competitive Advantage: Collaboration among companies can allow them to utilize each other's expertise and abilities. This results in the production of superior products or services, which can give them an edge over their competitors.
- Greater Flexibility: Companies can adapt to changes in the market more quickly by collaborating and sharing resources.
In an HMS, companies collaborate to create a seamless experience for the customer and improve the efficiency of the supply chain. Examples of HMS in action include airlines, fast food chains, and retailers. An HMS can lead to increased efficiency, innovation, and customer satisfaction. As collaboration becomes necessary, HMS will likely become more widespread and essential for success.
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