Difference Between Vertical and Horizontal Market Answer by Rick Wemmers, BOL Guru Guru Bios Question: Can

you please explain the difference between a vertical market and a horizontal market? Answer: A vertical market at a bank might be Senior Citizens. The bank would build a group of services specifically of interest to this population segment and market it to them. A vertical product might be a debit card for teens which has a cash limit. A horizontal marketing effort is broad and general. For example a checking account. It is good for most anyone. A bank's market positioning might be horizontal, offering to be the best at all financial services. This is of course hard to manage.

Horizontal Marketing Definition: When two companies producing different products jointly market their products. Sometimes horizontal marketing is referred to as symbiotic marketing.
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Vertical marketing focuses on developing solutions to user problems within specific industries. In contrast, horizontal marketing provides generic one-size-fitsall offerings.
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What is vertical marketing? Simply put vertical marketing is promotion targeted at specific industries. The benefits of vertical marketing are immense. Vertical marketing can open new doors and touch niche markets, where there maybe little competition. Usually, when somebody refers to vertical marketing, they are referring to tageting a specific demographic. Like, in Baron's Marketing, the hypothetical company designs and markets a software specifically to architects. (I believe - haven't read it in a while.) HP does a lot of broad market marketing. But they are also doing an aggressive vertical marketing campaign right now with a computer designed specifically for Photographers. It has media card slots for every major memory stick on the market, along with advanced photo-editing software. That is vertical marketing.

Business Definition for: horizontal marketing system (HMS)

Dictionary of Marketing Terms horizontal marketing system (HMS) joining of two or more corporations on the same level for the purposes of pursuing a new marketing opportunity. Usually a horizontal marketing system is established so that the individual members can combine resources to make the most out of the marketing situation. Products from each member can

be marketed and/or distributed together, such as a bottle manufacturer combining with a producer of dehydrated salad dressing preparations. The two products are marketed together, allowing the two companies to combine their marketing resources and accomplish much more than either one might accomplish alone. Corporations in a horizontal marketing system also have the option of combining their capital and production capabilities, in addition to their marketing and distribution resources, to produce synergistic benefits for all members. See also vertical marketing system

Related Terms:
vertical marketing system joining producers, wholesalers, and retailers in the production and distribution of products. There are three major types of vertical marketing systems, and each uses different means for setting up leadership and power in the system: (1) corporate, where coordination and conflict management are attained by common ownership; (2) contractual, where coordination and conflict management are attained through contractual agreements among members of the system; (3) administered, where leadership is assumed by one dominant system member. The purpose of a vertical marketing system is to eliminate conflicts arising from each company's pursuit of its own financial objectives.

Vertical marketing
This relatively recent development integrates the channel with the original supplier producer, wholesalers and retailers working in one unified system. This may arise because one member of the chain owns the other elements (often called `corporate systems integration'); a supplier owning its own retail outlets, this being 'forward' integration. It is perhaps more likely that a retailer will own its own suppliers, this being 'backward' integration. (For example, MFI, the furniture retailer, owns Hygena which makes its kitchen and bedroom units.) The integration can also be by franchise (such as that offered by McDonald's hamburgers and Benetton clothes) or simple co-operation (in the way that Marks & Spencer co-operates with its suppliers). Alternative approaches are 'contractual systems', often led by a wholesale or retail cooperative, and `administered marketing systems' where one (dominant) member of the distribution chain uses its position to co-ordinate the other members' activities. This has traditionally been the form led by manufacturers. The intention of vertical marketing is to give all those involved (and particularly the supplier at one end, and the retailer at the other) 'control' over the distribution chain. This removes one set of variables from the marketing equations. Other research indicates that vertical integration is a strategy which is best pursued at the mature stage of the market (or product). At earlier stages it can actually reduce profits. It is arguable that it also diverts attention from the real business of the organization. Suppliers rarely excel in retail operations and, in theory, retailers should focus on their sales outlets

rather than on manufacturing facilities ( Marks & Spencer, for example, very deliberately provides considerable amounts of technical assistance to its suppliers, but does not own them).

[edit] Horizontal marketing

A rather less frequent example of new approaches to channels is where two or more noncompeting organizations agree on a joint venture - a joint marketing operation - because it is beyond the capacity of each individual organization alone. In general, this is less likely to revolve around marketing synergy.