Is a vertical, or horizontal marketing system better for your business? Is it better to approach your industry with a refined focus on a specific niche market, or cast a broader net? These are questions that brands ask themselves every day.
When you’re launching your startup or creating a marketing plan for your existing business, one of the first promotional decisions you’ll make is between vertical and horizontal marketing systems. Vertical marketing appeals to people in a specific industry or niche, while horizontal marketing targets numerous sectors at once through clever strategies and partnerships.
Facebook relies on a horizontal marketing system to appeal to customers from almost any background, while Instagram is specifically suited to those with a passion for smartphone photography.
The question is, will a horizontal marketing system, or a vertical strategy take your business to where it needs to be faster? Which direction do you need to go in to achieve the ultimate level of marketing success?
That’s what we’re here to find out.
By the time you’ve finished reading you’ll have a complete horizontal marketing system definition, examples to guide you and tips on how to bring your new promotional plan to life.
Let’s get started.
Why go horizontal? Your horizontal marketing definition
One of the most critical aspects of any advertising strategy involves finding your target audience. A horizontal marketing system focuses on broader audiences rather than narrowing down into specific niches. This means that companies with products or services that have a universal appeal are more likely to ‘go horizontal’.
With horizontal marketing systems, you can afford to be less targeted with your campaigns, which means less time spent personalizing every message, and more time dedicated to reaching as many people as possible. One of the best strategies in horizontal marketing involves using partnerships to grow your industry appeal. For instance, there are many examples of horizontal marketing system solutions out there involving industry-leading tech company, Apple.
In the past, Apple has partnered with Starbucks to bring iTunes music to customers sipping their lattes, and Nike, to support athletic customers hoping to improve their performance with insights from the iWatch. Apple has even created sensors that runners can place directly into their Nike shoes!
More recently, healthcare company Johnson and Johnson partnered with Google this year to develop affordable and efficient robots that can assist with routine surgical procedures. The whole point of horizontal marketing is that you can connect with a wider range of customers through a universal and accessible desire, like the demand for a better quality of life.
While great partnerships can lead to excellent horizontal marketing system examples, collaboration is just one piece of the horizontal market puzzle. There are plenty of other things that you can do to expand your reach, including:
- Taking advantage of new trends: Coca-Cola connected with a new sector of their market in 1982 when they took advantage of the desire for fitness and weightless by introducing Diet Coke.
- Expanding into a new location: If you currently market specifically to a nearby place, then you can develop your strategy by moving into new markets. Look for other areas you can ship or sell to that will help your organisation to grow.
- Take control of the market with acquisitions: Mergers and acquisitions can be hard work, but they’re also an excellent way for your business to grow. Look at Facebook and Instagram for instance. Instagram wasn’t a direct competitor for Facebook, but purchasing Instagram was an opportunity for them to broaden their reach to new customers.
Vertical vs. horizontal marketing: What’s the difference?
Now that you have a horizontal marketing system definition, you may be wondering how horizontal marketing differs from vertical promotion. Both vertical and horizontal marketing system solutions are fantastic opportunities for companies to grow and thrive in their chosen spaces. The key is figuring out precisely how focused you want your promotional strategies to be.
What is a horizontal market?
A horizontal marketing system is all about connecting to a broad audience. This could mean that two or more organizations join together to capitalize on new opportunities. For instance, a supermarket and a bank could agree to have a bank’s ATMs situated at their supermarket locations. Horizontal growth strategies can also involve mergers, acquisitions, and even the development of new products.
As collaboration is the most common horizontal marketing strategy, the challenge for most companies in the horizontal space is finding organizations that they can work with which share their unique user personas. Generally, horizontal marketing involves two companies from disparate industries coming together to develop the services and solutions they can offer their customers. For instance, an athletics company could team up with a technology brand to make it easier for athletes to monitor their performance on the field.
What is a vertical market?
Businesses with a distinct focus on vertical marketing systems seek to reach a very specific demographic. There’s a positive side to vertical marketing. After all, the more niche your audience is, the less competition you have from other companies, and the easier it is to build your credibility as a thought leader in your space.
For instance, companies that sell exercise equipment, athletic apparel, and nutritional supplements are all in the same vertical market, because they focus on customers with interest in health and fitness. However, these businesses are distinct because they solve a specific problem for their customers. If two companies in the same vertical joined together to reach more customers, they would still be engaging in vertical marketing, because they’re not reaching out to new demographics.
Simply put, a horizontal marketing system focuses on increasing your exposure and demand within a broader, more diverse market, rather than a specific sector or niche. Vertical promotion, on the other hand, is all about keeping your reach as narrow and refined as possible.
Working in both markets at once
Importantly, you’re not restricted to choosing between vertical and horizontal marketing systems when it comes to promoting your brand. If you have experience in a specific industry, you can look for ways to demonstrate your expertise in that vertical, while appealing to other sectors at the same time. For instance, if you’re a motivational speaker with knowledge in HR, then you’d naturally target HR companies as customers. However, you might also think about teaming up with events companies, or corporate wellness committees to connect with new markets too.
The main thing to remember is that overlapping your vertical and horizontal marketing system can be tricky. It’s crucial to make sure that you don’t lose track of the defining values and goals of your brand.
The benefits of horizontal marketing systems
As mentioned above, there are benefits to vertical marketing.
A refined target audience makes it easier to personalize your promotional strategies and create emotional connections with your customers. For instance, the way you feel when shopping at a local vintage bookstore is nothing like the feeling you get when you’re browsing on Amazon.
What’s more, with a niche marketing strategy, you can achieve exceptional marketing results, without over-spending on things like competitive keywords and PPC.
However, while vertical marketing has its charms, that doesn’t mean that there aren’t benefits to horizontal marketing too. Companies operating in a horizontal marketing system will automatically have a very diverse range of customers. If you’re appealing to a horizontal market, your products and USP are likely to be very versatile – appealing to the needs of various customers. For instance, Starbucks has a very horizontal market, as it sells food, coffee, and all manner of hot beverages, designed to appeal to any customer.
This broad approach to marketing means that virtually anyone can be your customer. You don’t have to spend extra time and money on analyzing your target audience because you can appeal to almost anyone. The versatile nature of horizontal marketing systems leads to benefits like:
- Cost reduction: Having a very simple and diverse offering means that you can operate at a larger scale and connect with more customers at once. This means that you don’t have to spend as much time or money on personalized marketing materials. A broad marketing strategy is often the easiest to implement. However, you may need to pay a little more for your keywords if they’re particularly competitive.
- Unlimited sales opportunities: A horizontal marketing system allows you to connect with customers across a broad range of demographics. For example, by partnering with Starbucks, Apple appealed to the everyday coffee drinkers who like to use their Mac computers and iPhones while they’re relaxing at a nearby café. At the same time, Apple reached an entirely different set of customers by collaborating with Nike, so that they could appeal to consumers on virtually every side of the market. Make the right connections through your horizontal marketing strategy, and there’s virtually no end to the sales you can generate.
- Build brand awareness quickly: When you’re developing a new brand, one of the toughest things you’ll need to do is build trust and awareness for your company. Jumping into a narrow niche and concentrating exclusively on vertical marketing means that you’ll need to spend a lot of time building relationships with a specific audience. However, if you make the right connections with companies pre-established in other horizontal industries, then you can boost your reach much faster. Connecting with new customers and getting your brand name onto the streets is easier when you’re willing to team up with companies from a range of backgrounds.
How to take advantage of horizontal market growth
The purpose of a horizontal marketing system is that it allows companies to take advantage of ‘horizontal growth’. In other words, you expand your service or products into new markets, business domains, and geographies.
Scaling horizontally has its challenges. After all, there’s a good chance that you’ll encounter audiences and customers that you’re not entirely familiar with. The less you know about your horizontal endeavours, the more difficult it will be for you to build loyalty and affinity with your new clients. Additionally, horizontal marketing systems can also face problems with industry-specific regulations and localization commitments.
Despite the challenges, a horizontal marketing strategy still has a lot to offer your company and your brand. All you need to do is find the right way to implement your horizontal marketing systems. Some of the most common options include:
- Delivering your service/ products to new markets: This could be done by enhancing your existing product idea to appeal to different audiences. For instance, a heart rate tracking system for athletes could potentially appeal to the medical sector too with a few system alterations.
- Collaborating with new companies: Connecting with other organizations in different verticals will help you to reach new customers in an exciting way. For instance, a coffee company could partner up with a hospitality brand to delivery luxury coffee to hotel patrons.
- Addressing new geographies: As mentioned above, there are plenty of ways that you can find new audiences if you’re willing to sell in different countries. Usually, this still means partnering with other brands in the locations you want to target so that you can improve your reputation.
One fantastic example of a company with a strong horizontal marketing system is Uber. This travel-focused startup launched its service in a single city before rolling out to locations around the world. As the organization began to recognize the demand for easy and smartphone-oriented services, it also expanded into different horizontal markets with things like ‘UberEats’. The UberEats brand took the core logic of an on-demand travel service and took it into the food delivery industry too!
Used correctly, a horizontal marketing system can even help you to spread out the cost of marketing. For instance, when two companies collaborate together on a horizontal marketing strategy, smaller companies can reduce some of the strain on their marketing budget. Many young startups use horizontal marketing to help them launch their brand into new industries by taking advantage of the pre-existing reputations that other brands have in that space.
4 Ways to develop your horizontal marketing strategy
There are many challenges involved in developing a horizontal marketing system. However, if you can find one or more companies from a market that you want to connect with, that share the same customer base as you, then you could be on your way to exceptional results.
A well-thought-out horizontal marketing strategy gives today’s organizations the opportunity to reach out to a broader audience without increasing their marketing budget too drastically. In some cases, the company that you partner with may even offer similar products or services to you, without overlapping with your portfolio entirely. The idea is that any business you collaborate with should give you the option to offer customers a wider range of products and services to your clients.
To make sure that your horizontal marketing strategy takes you in the right direction, follow these steps:
1. Define your business goals
For any horizontal marketing system to work, you need to know what you’re trying to achieve by connecting with new companies and customers. While more sales is an apparent goal for a horizontal marketing strategy, there’s often something more guiding your decisions on which industries or organizations to partner with.
As an example, do you want to enhance your brand identity as a forward-thinking and modern company? If so, it makes sense to partner with technology brands and innovators. Do you want your target audience to see you as more ethical? If so, partnering with charities could be a great way to boost your reputation.
Decide where you want your horizontal marketing system to take you in advance, and you’ll have an easier time tracking the success of your campaigns.
2. Get to know your new audience
Some companies investing in their horizontal marketing systems make the mistake of thinking they don’t have to understand their audience because their reach is so broad. However, as you expand into new industries and geographies, you’ll need to come up with new marketing plans and personas to help guide your promotional strategies in this area.
With the above in mind, ask yourself whether moving into a new industry will mean that you need to use specific jargon or language in your sales pitches. Will your current tone of voice match the personality of the customers in your new audience? Are there any language issues that might not translate well if you’re moving into a new country?
The more research you do into your new horizontal market, the better off you’ll be.
3. Focus on strategic partnerships that benefit both sides
Remember that building your online and offline presence through horizontal marketing systems often relies on the partnerships you can make. When you’re deciding which companies to partner with, make sure that you make your decisions based on the long-term goals of your organization, and shared values that will help you to collaborate more effectively.
It doesn’t make sense for an environmentally-friendly company focused on sustainability to team up with an oil mining company and vice versa. While horizontal marketing systems are designed to expand your market reach, you need to make sure that the connections you’re making are appropriate for the brand you’re attempting to build.
At the same time, it’s worth making sure that you can offer something beneficial to the companies you partner with, in exchange for the value that they give you. The best horizontal marketing system examples work because both businesses get something out of the partnership.
4. Develop your plan of execution
Finally, strategy is often the key to success with almost any marketing or promotional strategy. Once you know your marketing goals, who you’re going to partner with, and which audiences you’re going to try and reach, you can begin to develop a plan of execution for your horizontal market. For instance, think about:
- What kind of marketing channels you’re going to use to reach your new audience.
- How you’re going to link your existing promotional strategies to your new advertising campaigns.
- Where can you deliver value for your new partners and help their companies to grow?
- What can you do to make sure that the values and personality of your company shine through as you move into new markets?
Don’t be afraid to brainstorm with your new partners when you’re looking for ways to broaden your reach and connect with new customers. Additionally, remember that corporate events can be a fantastic way to introduce your new horizontal marketing system to the world.
Is your business moving in the right direction?
Ultimately, deciding whether a horizontal marketing system is right for you comes down to one significant decision. Do you think that it’s better to focus your attention on a specific niche, or a general audience?
Horizontal markets are defined by a specific demographic that can stretch across countless industries. For example, a company that sells coffee can appeal to customers from virtually any background. On the other hand, vertical markets are all about specificity. A company selling healthcare technology can only really appeal to people interested in or involved with healthcare.
If you can’t decide whether a horizontal marketing strategy or a vertical system is right for you, don’t panic. There are plenty of businesses that can serve both vertical and horizontal markets at the same time. The key to success is finding a team that can help you take advantage of your marketing strategy and reach as many potential customers as possible.
Do you need help finding the right direction for your promotional practices? If so, reach out to Fabrik today!
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