A horizontal market is a market so diversified that its products and/or services are broad enough to meet the needs of multiple industries. The audience for horizontal markets shares characteristics across industries. Based on the scope of horizontal markets, the marketing efforts that support them must reach this spectrum of buyers and prospective buyers.
Horizontal Market Examples
Some examples of horizontal markets are automotive, banking, healthcare, real estate, telecommunications and travel. But since horizontal markets are broad to meet the needs of multiple industries, there are many other examples of horizontal markets.
Within each horizontal market can be other horizontal markets. A telecommunications company (telco), for example, may launch a horizontal marketing effort to support the sale of Internet services to homeowners. This is a broad umbrella consisting of all homeowners in a specific region. This category of homeowners represents a horizontal market.
Segmenting Horizontal Markets
Because horizontal markets are broad, marketers often segment them into subsets. These groups are typically based on demographic factors such as the prospect’s income, location or job title.
To use telcos as an example again, they will even further segment their buyers and prospects to address specific needs. To increase sales of home Internet services, they can target a specific subgroup, such as senior citizens, low income users or parents with school-age children.
B2B Horizontal Marketing
For business-to-business companies, another example of marketing horizontally is to target specific job titles across industries. A recruiting firm may want to reach human resources directors at companies across the country. This marketing effort may not take into consideration the industries these directors represent, but is focused purely on their job title.
When a Horizontal Is a Vertical
In contrast, a vertical market is a single specific industry where products or services can be marketed using similar methods. However, an industry that reaches a horizontal market can also be a vertical market. This occurs when the industry is on the buy side instead of the sell side. Telcos can represent vertical industries for a company selling products or services directly to them. For a corporate interior design firm, for example, telcos, banks and real estate firms may be vertical industries.
Combining Both Strategies
Horizontal companies can and do use both vertical and horizontal marketing strategies. Sometimes broad strategies can be effective based on economies of scale. Other times it pays to target specific audience segments and speak directly to them.