Best Practices For Transition to Vertical Solutions Marketing – Part 4

Vertical Marketing System is a distribution channel structure in which producers, intermediaries and retailers agree to act as one to serve their agreed-upon target segment(s). There is clear value in having a single source of expertise that can provide an end-to-end, fully reliable, fully integrated solution which is also forward, backward and horizontally compatible with its current and emerging technology standards. A Vertical Solutions Marketing (VSM) approach has the potential to increase market share within the target segments, and total revenues, profit margins and customer loyalty, compared to the more traditional approach.

The transition to an ideal vertical solutions marketing organization cannot be accomplished in one step. Here are some of the best practices that need to be followed to do so:

Management style should allow flexibility and encourage dynamic thinking

Successful parent companies can assist in the transformation

Parent companies can assist if: 1) the subsidiary firms in a multi-business corporation have some opportunity to improve performance; 2) the parent possesses some special capabilities or resources that will enable it to improve the subsidiary’s performance or exploit a parenting opportunity (growth through vertical solutions marketing); and 3) the parent has sufficient understanding of the critical success factors in that business (vertical industry) to make sure that it does not influence the business in inappropriate ways.

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