The Ultimate Guide to Vertical Marketing System

Companies usually use one of two marketing methods to get products in front of their customers: horizontal and vertical marketing systems. Vertical marketing systems are designed to have everyone work together, allowing them to operate seamlessly and improve their profits.

The Ultimate Guide to Vertical Marketing System

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As you begin to build your company and brand, your digital marketing strategy should ultimately be defined by who your target audience is. 

There are a lot of factors that play a role in determining your audience — who will buy from you and then later advocate for your brand.

But before you dive into all that, you need to determine if a vertical marketing system is ideal for your business. After all, it is typically chosen when you want to focus on a very specific market. 

Let’s learn more about this type of system, shall we?

    What is a Vertical Marketing System?

    A vertical marketing system refers to the teamwork of the different members of any distribution channel. 

    This can include producers, retailers, and wholesalers. 

    All of them need to work with one another in order to successfully deliver products to consumers and achieve the best possible efficiency.

    What are the Main Types of Vertical Marketing Systems?

    There are three main types of vertical marketing systems, each bringing something different to the table. Let’s take a look at these.

    Corporate Vertical Marketing System

    The corporate vertical marketing system consists of a single company that holds ownership over the entire supply chain — from start to finish. 

    While a sole business controls everything, each company within the channel manages the project.

    Let’s look at an example for better comprehension. Amway is a marketing company in America that manufactures health, home care, and beauty products. 

    This is the perfect example of a corporate system due to the fact it manufactures and sells its products only through its own authorized stores.

    Therefore, Amway is the producer and distributor.

    Contractual Vertical Marketing System

    The contractual vertical marketing system is when each member of the distribution channels acts as their own independent entity. 

    They all combine their efforts in an effort to obtain higher efficiency and value for all involved companies. 

    Organizations sign contractors with distributors to sell their products and remain competitive in a cut-through industry.

    An example of a contractual vertical marketing system is working with a franchise. In order to open a franchise store, a license must be purchased. 

    However, the owner must follow all the guidelines, standards, and practices of a franchiser. Some popular examples of franchises include McDonald’s, Pizza Hut, and Dunkin’ Donuts.

    Administered Vertical Marketing System

    The administered vertical marketing system focuses on the size and power of each individual company that is involved in the supply chain. 

    There is no contract, but the largest and most powerful company will dominate the activities of the other companies.

    An example of an administered vertical marketing system is Procter & Gamble. 

    As a powerful consumer goods corporation, they require a serious level of commitment and cooperation from their retailers when it comes to pricing, promotions, shelf space, and display.

    Why Should You Invest in a Vertical Marketing System?

    What can a vertical marketing system offer you as a business? It may or may not be the best option for your company, depending on your business needs, but here is a look at some of the most common benefits.

    Improved Efficiency

    By definition, those who produce, wholesale, and retail within a vertical marketing system are working together to reach a common goal. 

    Because all companies are in it for the same thing, there is a higher desire to create systems with improved efficiency overall.

    More Effective Branding and Messaging

    When you’re able to focus your marketing efforts on certain industries and customers, you have the unique opportunity to identify your main message, increasing the chance for brand recognition.

    Providing a specialized product allows you the chance to position your brand as an expert within the industry.

    In the end, you will be able to showcase an enhanced understanding of the needs of your customers, allowing you to earn their trust, and differentiate yourself from the competition.

    Enhanced Communication

    When all organizations work together, the communication and relationships tend to be better overall. 

    Everyone in the supply chain should be communicating with each other regularly giving updates and following the same guidelines. 

    This can result in better results, more profit, and happier customers.

    Develop Brand-New Ideas

    It is a lot easier for you to learn about customer insights from within your market, giving you the chance to develop new products and/or services. 

    More often than not, it is the brands that are using a vertical marketing system that have the potential to deliver the most innovative ideas.

    How to Start Your Own Vertical Marketing Strategy

    Now that you know what a vertical marketing system is and why you should invest in one, let’s take a look at how you can create your own vertical marketing strategy.

    1. Do Your Homework

    Due to the fact you need to locate the most appropriate audience and refine your sales messaging within a vertical marketing system, you will want to take the time to do your homework ahead of time. 

    In doing so, you will be able to set the foundational work of your campaign and avoid spending your time and money on an unworthy vertical.

    Consider what type of consumer you are wanting to target and why. Are you equipped with specific knowledge that can be taken advantage of? Are you currently in collaboration with leaders that can help you gain the success you are after?

    As soon as you have identified who your audience is, you can create special user personas that will allow you to find solutions to their problems.

    2. Build a Solid Content Strategy

    During your research, you hopefully developed buyer personas and identified areas you should build on. 

    Now, it is time to develop your content strategy, as this is what will connect your brand to your target audience.

    Keep in mind that your goal here is to create tailored and valuable content, which is generally aimed at a B2B market

    Select a tone of voice that will maintain consistency throughout all channels. Further, you need to identify your unique selling points to ensure they’re strategically defined within your content, allowing you to differentiate yourself from competitors.

    In a vertical marketing system, you need specific, focused content. 

    Don’t create content that is vague and broad. Your audience needs to know that your content is speaking to them. 

    Ideally, you should look for questions customers are asking within your specific industry and turn those into valuable content.

    3. Increase Your Online and Offline Presence

    Once your content marketing plan has been developed, you need to begin increasing your visibility. 

    If you are utilizing the vertical marketing system, you can collaborate with your distributors as you determine how to increase your online and offline presence.

    Ultimately, you need to figure out where your audience spends their time, and focus your marketing efforts there. 

    For example, a typical B2B vertical marketing strategy tends to include channels like LinkedIn, industry events, in-person meetings/conferences, and specific forums.

    4. Get in Front of Your Audience

    With all of the above in mind, it is time to get yourself directly in front of your target audience — but also at the right time. 

    A standard marketing strategy is fine, but you will also want to consider utilizing specific marketing channels and associated strategies.

    For instance, a vertical marketing strategy is usually great for live events due to the fact that you are looking to connect with consumers looking for specific help. 

    You have the potential to attract a lot of — and the right kind of — B2B leads by opening a booth or scheduling yourself to speak at an industry conference.

    Figure out where your audience is, and determine the most appropriate time to develop your brand’s position in your particular niche.

    5. Identify Key Issues and Work Around Them

    As part of your content marketing strategy, you will want to define yourself as an expert in your field. 

    In order to do this, your content must prove to be valuable and informative. Vague and broad simply will not cut it, as already mentioned (and worth mentioning again and again).

    When you’re trying to get a leg up on your competition, your content must be of high quality and it must demonstrate your expertise within your industry. 

    This is true whether you are crafting blog articles, white papers, or eBooks.

    Now, make sure to consider long-form content. This type of content can be incredibly valuable for your overall vertical marketing strategy. 

    However, you must know what it is that your customers need answered in your content.

    Familiarize yourself with the buyer’s journey, as this will help you successfully identify what is important to your customers. 

    Once you have identified a potential topic, speak to your audience and not at them.

    In addition, don’t overstuff your content with keywords, although you do want to sprinkle them throughout. You also don’t want to use too much industry jargon, as your audience is unlikely to comprehend your message.

    6. Track Your Performance

    Finally, you must test and measure your campaign’s performance. 

    Within a vertical marketing system space, you will quickly find out how harsh the learning curve can be, which occurs as you are learning what works for your customer base.

    By tracking the performance of your marketing campaign, you can ensure that the content you’ve created is working, you’re sharing your content in the most appropriate places, and you’re reaching out through the proper channels for success.

    Wrap Up

    A vertical marketing system is a unique spin on a traditional marketing system. 

    It ensures that multiple companies (usually) are able to cooperate with one another while meeting the needs of customers, increasing revenue, and reducing expenses.

    When approached properly and with a lot of patience and planning, a vertical marketing system has the potential to take your brand to the next level. 

    Want to go even higher? Make sure your business proposal is on point!


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