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(Article first published in Dec '09. It has been modified slightly to suit its publication on our site)
The majority of marketing carried out across the world is 'horizontal' in nature. This means that it tries to address the needs of a broad range of potential customers, whether they are domestic or business. However, some companies often choose a more 'vertical' marketing approach. Vertical marketing is another way of saying 'industry-specific' marketing, whereby you pick an industry and market your product or service to potential customers within it.
Vertical Marketing is similar in nature to 'targeting', which is a method for segmenting your potential customer-base and then promoting those features of what you are promoting that most suits their needs. However, targeting is used more typically in a Business to Consumer environment, whereas vertical marketing is a Business to Business approach.
Give Me Some Examples!
Imagine you manufacture printers and you are launching a new model that does everything. In this case you could:
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Run an ad in a newspaper outlining its top highlights - This is horizontal marketing.
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Run an ad in a photographic magazine highlighting the fact that it produces the very best quality photo prints - This is target-based marketing.
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Run an ad in a women's magazine that talks about the benefits and says that it's available in pink - Still target-based marketing.
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Run an ad in a solicitors' magazine that talks about the speed of the print, how cheap the cartridges are and how the print is guaranteed for 2,000 years - This is vertical marketing.
Why Choose Vertical Marketing?
In some cases a product/service only applies to a particular market; there would be no point advertising a hospital theatre cleaning service in The Times! However in other cases a decision can be made to specifically target an industry at a time. For instance if you created a factory clocking system, you might target all meat production facilities first and then target computer manufacturing companies, then target cleaning companies, etc.
The reason for this is that generally, the costs of marketing to a vertical sector is a great deal lower than going broad and you are able to focus your advertising and print materials on a core message that suits that industry. In terms of the numbers, I call this the "Selective Pyramid", whereby your broad customer base is at the bottom and the vertical customers are at the top. By the time you get to the top block of the pyramid, you will have reduced your target pool of customers to a fraction of the potential total, but your ad will have something to say to almost every single one! Couple this with the reduced advertising costs and then run the same ad (with different text perhaps) in a different vertical market and your pool of customers starts to get bigger and bigger.
The end result should be that although you might end up spending the same amount in marketing, your cost per acquisition is significantly lower, which means more revenue from your spend!
In summary, some companies will use a vertical marketing approach after they have run their horizontal campaign to squeeze out extra sales, while in others they will run it instead of a horizontal approach. The decision you take depends on your business, products/services and goals.
Franco De Bonis has worked in the
field of sales and marketing promotion since 1990 and was most recently
the global marketing manager for a major international technology
company before setting up The DG Group in January 2007.
The DG Group is dedicated to
delivering all the marketing solutions any company may require. Whether
it's a website or leaflets and brochures, or even some product
packaging; The DG Group will manage the whole project and even provide
guidance along the way.
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