At the inception of every business, there will be a point where business owners will have to make a crucial decision. This decision is whether to channel the business in the vertical space or the horizontal space. There are various types of opportunities that are available for both markets. However, it is important to choose which is best for your business in whatever space you are going into. Now at this point, you have already decided to channel your products and services in the horizontal space. This is where this article comes in. In this article, we will be providing you with insights and information on how you can grow your business. Not only that, we will also be breaking down how you can expand your business horizontally with our marketing insights.
What is a horizontal market?
A horizontal market is a market where several products and services are produced to serve different industries. The horizontal market can be found in a wide range of businesses serving different groups of people. Any business that is performing its operations in a horizontal market will accommodate different groups of people. These people who are its customers are distributed across several categories or segments of buyers and consumers. Therefore, the term horizontal market is used to describe any business that markets its products or services to different varieties of industries.
A typical example of a business in the horizontal market will be office supplies. The office supplies market sells its products to all kinds of offices in different industries. A medical laboratory equipment market will be categorized as being under the verticals because only medical laboratories purchase supplies from this market. The coffee market will also be another eminent example since various people from around the world take coffee. These people of course cut across different industries. Now before we go into how you can expand your business horizontally, let us quickly see the benefits and advantages you stand to gain in the horizontal market.
Benefits of Horizontal market to your products and services
There are several advantages when you decide to sell your services and products in the horizontal space. We are going to touch on some of them:
Businesses have a Wide Customer Base
This is one of the major benefits of selling your products and services in a horizontal market. Businesses will always have a wide customer base. This way there will hardly be a situation where there is scarcity of demand. There will always be a customer who needs the products you sell.
Multifaceted goods and services
Any product, be it goods or services, sold in a horizontal market are often multifacetedin nature. They are multipurpose and can be used according to a wide range of industries. Unlike vertical markets, they are not restricted or limited to one specific group of customers. Almost everybody everywhere can make use of the product of one particular company in a horizontal market.
Low negotiating ability
Since horizontal markets involve a wide range of customers in different industries, there will be a low negotiating abilityfor those who buy the goods and services. As there is a broad customer base, the demand for that product will be high, hence making customers have no choice but to buy the product since they are in need of it. In the case of products in the vertical markets, the market provides a high negotiating ability to those who buy the goods and services. This is because the products are focused on a particular niche or group of people. The products and services are limited to the customer base that they are focused on.
Sellers have the opportunity of Preferential Pricing
This simply means those who sell their products in the horizontal market are able to adopt the process of preferential pricing. The sellers can sell the products to the purchasers at different rates in different industries. There is a wide range of customers that the product is being sold to. Because of this, the amount a seller sells the same product to Niche A can be different from the amount it sells the same products to Niche B. That makes it one of the benefits of choosing to market your products and services in a horizontal market.
Expand Your Business Horizontally
You have an edge with these marketing strategies to expand your business horizontally. The methods of marketing your products and services in a horizontal market is not specialized. There isn’t a restricted group of audience as that of the vertical market. Those who are your purchasers are from different varieties of industries. You have an impact in a wide range of niche which makes your customer base a large one.
The profit margin may be low when compared to some of the businesses operating in the vertical space. It also depends on how you can leverage the benefits listed above. You can grow your profit margin by having a good relationship with your purchasers. This way they can always make sure to get their products from you. They can also influence their colleagues and ensure they purchase from you.
It is important to decide what industry you will be marketing your products to, if possible from inception. This will help you strategies and have a good grasp of what strategy will be suitable for marketing your product and services. The digital world is one the increase and marketing has taken a new form. There is lots of data available on the internet for improving your business. As a business owner, you can leverage on this opportunity to rightly target your customers. You are able to know who they are and what they want. Thereby satisfying their needs in the best way possible.
This is very possible in the horizontal market. When you decide to market your products in the horizontal market, you will have a more general access to information. You can use this information to your advantage, to expand your business horizontally. As a business owner in a horizontal market, you can make use of traditional means to promote your business. The use of billboards, television ads and other traditional methods will also help you to reach your customer base.