For your business to be successful, you need to identify your target market. Some businesses strive to cast a wide net. These are defined as horizontal markets. A horizontal market does not focus on a particular industry and is not concerned about a particular niche.
You have likely also heard of vertical markets, but what are verticals in business? Verticals describe where a business caters to a niche market. Their products and services are uniquely designed to meet the needs of a specific audience.
Meeting The Needs Of Vertical Markets
E-commerce businesses have a low overhead. This allows them to cater to niche markets. They can focus on vertical markets because the internet allows them to sell their products around the world. While their customer base may be small, their reach is wide enough and their overhead is low enough to make focusing on a niche market profitable.
If you are still wondering what are verticals in business, consider the example of an online store. An online store that sells sporting goods of all kinds represents a horizontal market. Their focus is wide, looking to attract people from all walks of life who have any interest in anything sports-related.
Conversely, a sporting store that only sells racquetballs, racquetball racquets, and racquetball equipment represents a business that focuses on a vertical market. Going back to the example of the online store that sells sporting goods of all kinds, if within their organization there are separate departments focused on separate sports or separate types of sporting attire, they represent a narrower vertical market.
How Defining Vertical Markets Leads To Vertical Business Solutions
Identifying vertical markets makes it easier for customers to shop. They know that there is a business that specializes in addressing the specific needs they have.
Defining vertical markets can lead to vertical business solutions that make it easier for your business to grow. From an advertising perspective, you can create a unified advertising message that can be transmitted to all of your advertising media, including social media, your website, and print.
Defining vertical markets allows your company to specialize in creating a niche service or product. With all of your organization’s energy being focused in one direction, you can perfect the service or product that you offer.
Focusing on a niche market allows for specialization, which typically reduces competition. If you are the only one offering a particular product that your customers need, you can charge a higher price and the market can support that higher price.
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At Fusion CPA, we want to help you grow your business. We do this by offering tax planning, financial advisory, and bookkeeping services to small and medium-sized enterprises. Let us help you identify your niche market and then create a financial plan that is focused on growth. If you need assistance tackling finance-related challenges, click the discovery button below to talk to an expert CPA today.
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