Vertical market
Encyclopedia
A vertical market is a group of similar business
es and customer
s that engage in trade based on specific and specialized needs. Often, participants in a vertical market are very limited to a subset of a larger industry (a niche market
). An example of this sort of market
is the market for point-of-sale
terminals, which are often designed specifically for similar customers and are not available for purchase to the general public. Vertical marketing can be witnessed at trade shows. The opposite of vertical marketing is horizontal marketing
.
, due to the overlapping focuses of the products and services that are provided to the customers.
The single defining characteristic of the participants in a vertical market is competition within a well-defined segment.
Horizontal market
participants often attempt to meet enough of the different needs of vertical markets to gain a presence in the vertical market. Their similar products/services tend to be less of a fit but also less expensive than specialized, vertical participant solutions.
Vertical market software
is software aimed at addressing the needs of any given business within a discernible vertical market. An example could be software that manages services in hotels - amenities solutions.
manufacturers. It is also known as a niche market
.
A horizontal market is a market which meets a given need of a wide variety of industries, rather than a specific one: for example, word processing
software. On occasion a horizontal market can be highly specialized at the same time, for instance consider the market for converting mainframe databases developed with the tools of a particular company. The market for such a database conversion service might involve many vertical markets (aerospace, manufacturing, banking, etc) but nevertheless be labelled "niche" if the database technology is technically obsolete and no longer mainstream.
Business
A business is an organization engaged in the trade of goods, services, or both to consumers. Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit...
es and customer
Customer
A customer is usually used to refer to a current or potential buyer or user of the products of an individual or organization, called the supplier, seller, or vendor. This is typically through purchasing or renting goods or services...
s that engage in trade based on specific and specialized needs. Often, participants in a vertical market are very limited to a subset of a larger industry (a niche market
Niche market
A niche market is the subset of the market on which a specific product is focusing; therefore the market niche defines the specific product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact...
). An example of this sort of market
Market
A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...
is the market for point-of-sale
Point of sale
Point of sale or checkout is the location where a transaction occurs...
terminals, which are often designed specifically for similar customers and are not available for purchase to the general public. Vertical marketing can be witnessed at trade shows. The opposite of vertical marketing is horizontal marketing
Horizontal market
A horizontal market is a market which meets a given need of a wide variety of industries, rather than a specific one.-Examples:In technology, horizontal markets consist of customers that share a common need that exists in many or all industries...
.
Markets
The activities of participants within any given vertical market are typically similar in that they aim at solving the same or similar problems. These markets are typically competitiveCompetition
Competition is a contest between individuals, groups, animals, etc. for territory, a niche, or a location of resources. It arises whenever two and only two strive for a goal which cannot be shared. Competition occurs naturally between living organisms which co-exist in the same environment. For...
, due to the overlapping focuses of the products and services that are provided to the customers.
The single defining characteristic of the participants in a vertical market is competition within a well-defined segment.
Horizontal market
Horizontal market
A horizontal market is a market which meets a given need of a wide variety of industries, rather than a specific one.-Examples:In technology, horizontal markets consist of customers that share a common need that exists in many or all industries...
participants often attempt to meet enough of the different needs of vertical markets to gain a presence in the vertical market. Their similar products/services tend to be less of a fit but also less expensive than specialized, vertical participant solutions.
Vertical market software
Vertical market software
Vertical market software is aimed at addressing the needs of any given business within a discernible vertical market...
is software aimed at addressing the needs of any given business within a discernible vertical market. An example could be software that manages services in hotels - amenities solutions.
Comparison with horizontal markets
A vertical market is a market which meets the needs of a particular industry: for example, a piece of equipment used only by semiconductorSemiconductor
A semiconductor is a material with electrical conductivity due to electron flow intermediate in magnitude between that of a conductor and an insulator. This means a conductivity roughly in the range of 103 to 10−8 siemens per centimeter...
manufacturers. It is also known as a niche market
Niche market
A niche market is the subset of the market on which a specific product is focusing; therefore the market niche defines the specific product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact...
.
A horizontal market is a market which meets a given need of a wide variety of industries, rather than a specific one: for example, word processing
Word processing
Word processing is the creation of documents using a word processor. It can also refer to advanced shorthand techniques, sometimes used in specialized contexts with a specially modified typewriter.-External links:...
software. On occasion a horizontal market can be highly specialized at the same time, for instance consider the market for converting mainframe databases developed with the tools of a particular company. The market for such a database conversion service might involve many vertical markets (aerospace, manufacturing, banking, etc) but nevertheless be labelled "niche" if the database technology is technically obsolete and no longer mainstream.
Examples
Some common examples of vertical markets:- Automotive
- Banking
- ConsumerConsumerConsumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...
- EducationEducationEducation in its broadest, general sense is the means through which the aims and habits of a group of people lives on from one generation to the next. Generally, it occurs through any experience that has a formative effect on the way one thinks, feels, or acts...
- EnergyEnergyIn physics, energy is an indirectly observed quantity. It is often understood as the ability a physical system has to do work on other physical systems...
- OilOilAn oil is any substance that is liquid at ambient temperatures and does not mix with water but may mix with other oils and organic solvents. This general definition includes vegetable oils, volatile essential oils, petrochemical oils, and synthetic oils....
and GasGasGas is one of the three classical states of matter . Near absolute zero, a substance exists as a solid. As heat is added to this substance it melts into a liquid at its melting point , boils into a gas at its boiling point, and if heated high enough would enter a plasma state in which the electrons...
- Oil
- Fast-Moving Consumer Goods (FMCG)
- FinancialFINANCIALFINANCIAL is the weekly English-language newspaper with offices in Tbilisi, Georgia and Kiev, Ukraine. Published by Intelligence Group LLC, FINANCIAL is focused on opinion leaders and top business decision-makers; It's about world’s largest companies, investing, careers, and small business. It is...
(FinanceFinance"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...
) - FoodFoodFood is any substance consumed to provide nutritional support for the body. It is usually of plant or animal origin, and contains essential nutrients, such as carbohydrates, fats, proteins, vitamins, or minerals...
and beverage - GovernmentGovernmentGovernment refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
- Healthcare
- InsuranceInsuranceIn law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
- ManufacturingManufacturingManufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...
- MediaMass mediaMass media refers collectively to all media technologies which are intended to reach a large audience via mass communication. Broadcast media transmit their information electronically and comprise of television, film and radio, movies, CDs, DVDs and some other gadgets like cameras or video consoles...
- OnlineONLINEONLINE is a magazine for information systems first published in 1977. The publisher Online, Inc. was founded the year before. In May 2002, Information Today, Inc. acquired the assets of Online Inc....
- Real estateReal estateIn general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
- ReligionReligionReligion is a collection of cultural systems, belief systems, and worldviews that establishes symbols that relate humanity to spirituality and, sometimes, to moral values. Many religions have narratives, symbols, traditions and sacred histories that are intended to give meaning to life or to...
- RetailRetailRetail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...
- TechnologyTechnologyTechnology is the making, usage, and knowledge of tools, machines, techniques, crafts, systems or methods of organization in order to solve a problem or perform a specific function. It can also refer to the collection of such tools, machinery, and procedures. The word technology comes ;...
- Telecommunications
- Transportation (TravelTravelTravel is the movement of people or objects between relatively distant geographical locations. 'Travel' can also include relatively short stays between successive movements.-Etymology:...
)