Posted in Marketing and Strategy Terms, Total Reads: 544
Definition: Vertical Marketing
In a vertical market, many vendors provide the goods and services which are need specific and related to some particular industry for example, banks, hospitals, insurance etc. It is also known as niche market. Mostly companies that are highly specialised into some products use the vertical marketing to target those niche segments/ target demographics.
For example, if some company wants to build medical lab equipment, it would only like to advertise and promote the equipment to its right target group, which is the medical industry. There would be no use of promoting the same to the general public as they would neither have the willingness or the ability to purchase lab equipment and hence the company only uses those mediums to promote which directly reaches the target customer through medical industry magazines, portals and medical conferences.
Vertical market is in contrast to the horizontal market which serves the broader market by providing a variety of goods and services. It is competitive because many vendors are involved in providing similar or same kind of services in the market. Even the activities performed by the members of the vertical market overlap due to the combined focus on particular goods and services in a given segment.
An automobile spare parts company will be working in a vertical market as the main customers would be auto manufacturers and mechanics. Competitors in the same segment will also be serving the same customers.