Horizontal vs. Vertical Markets in Business

Businesses can be placed into two kinds of markets: horizontal and vertical. Both are vital for marketing and company-building purposes. Here are some ways to differentiate horizontal markets from vertical markets and understand how you can use them.

Horizontal markets are:

• Defined by a demographic feature that can be common across different kinds of businesses
• Always broader than vertical markets
• Usually cooperative and seeking joint opportunities
• An opportunity to market to a general audience

Vertical markets are:

• A group of businesses that share the same industry
• Always specific and cannot cross industries
• Often competing against each other
• An opportunity to market to a specific audience

Although the two market types are contrasting, businesses can usually be categorized into both horizontal and vertical markets at the same time. For example, a shoe company could market horizontally to the area in which it is located. It could also market vertically to anyone considering a new pair of shoes. A children’s book publishing company can market horizontally to literate people or vertically to children and parents.

Knowing which horizontal and vertical markets your company wants to serve can be helpful to its marketing success. By defining your markets, you can better advertise and serve your markets’ needs, whether generally or specifically.

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