Vertical Marketing System and Oracle CRM
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. In conventional marketing systems, producers, wholesalers, and retailers are separate businesses that are all trying to maximize their profits. When the effort of one channel member to maximize profits comes at the expense of other members, conflicts can arise that reduce profits for the entire channel. To address this problem, more and more companies are forming vertical marketing systems.
The concept behind vertical marketing systems is similar to vertical integration. In vertical integration, a company expands its operations by assuming the activities of the next link in the chain of distribution. For example, an auto parts supplier might practice forward integration by purchasing a retail outlet to sell its products. Similarly, the auto parts supplier might practice backward integration by purchasing a steel plant to obtain the raw materials needed to manufacture its products. Vertical marketing should not be confused with horizontal marketing, in which members at the same level in a channel of distribution band together in strategic alliances or joint ventures to exploit a new marketing opportunity.
The main advantage of VMS is that your company can control all of the elements of producing and selling a product. In this way, you are able to see the whole picture, anticipate problems, make changes as they become necessary, and thus increase your efficiency. However, being involved in all stages of distribution can make it difficult for a small business owner to keep track of what is happening. In addition, the arrangement can fail if the personalities of the different areas do not fit together well.
For small business owners interested in forming a VMS, It will recommend starting out by developing close relationships with suppliers and distributors. “What suppliers or distributors would you buy if you had the money? These are the ones to work with and form a strong relationship,” he stated. “Vertical marketing can give many companies a major advantage over their competitors.”
The more than 900 enhancements included in the new Oracle E-Business Suite 11i.9 contain functionality for several markets, including the automotive, telecommunications, financial services and the consumer packaged goods industries. However, unlike Oracle’s CRM competition, the Oracle has designed the E-Business Suite so that all those functions come embedded and are delivered to every customer, regardless of industry. The features can essentially be turned on or off by individual companies.
While many industries say they have different needs, oftentimes the differences are just a matter of nomenclature. For example, the communications industry will likely improve service order fulfillment with the E-Business Suite’s MACD (move, add, change, delete) processes, but utility companies may want to take advantage of that feature as well,
The enhancements are focused on several key industries: aviation, aerospace and defense; automotive; communications; consumer packaged goods; financial services; government; health care; high technology; and life sciences. The update features enhancements to help customers deal with challenges in federal regulatory requirements and electronic signatures.
As Indian Industrialization has ruled by Automobile Industry, VMS will be future perspective of Automotive World. VMS is either CUSTOMER or PRODUCT oriented.