Horizontal Markets
Money-Saving Solutions for Companies with Common Goals
Many companies have marketing budgets, many of which are limited, depending on the business. No matter what the size of a company, every business is interested in saving money. By partnering with other companies, a business can generate more sales while saving money. They key is to partner with a company that has a common goal. Horizontal marketing techniques make this type of partnership possible.
What is a Horizontal Market?
A horizontal market occurs when two or more businesses partner together on a new marketing plan. These businesses do not have to be non-competitors. When these companies agree on a new plan, resources, such as money, are shared. Some companies even choose to share distribution and production resources in order to maximize profits. Partnerships between companies are for a common goal: to generate new customers and increase profits.
The greatest benefit of horizontal markets are the money that each participating company saves, since resources are shared. A horizontal market it also the easiest way to market a business. Small companies that are just starting out can partner with bigger companies to gain more business without having to put as much money and other resources into it than they would alone.
Types of Horizontal Markets
Partnerships can stem from doing an event together to generate new customers. Some companies offer coupons, products, and discounts that another company can give out as an incentive to draw customers. A business can even share its property with another business that has a common goal. An example of this would be the partnership that McDonald’s and Wal-Mart share. All of these types of horizontal markets help both parties while each saves money.
Smaller businesses engage in horizontal markets to generate business with little money. An example would be a women’s clothing store partnering with a cosmetics store for a customer appreciation event. The cosmetics shop can offer free product for the customers that attend the event at the clothing store. The sales personnel at the clothing store can advertise this as an incentive for customers to come to the event. Hence, both stores will likely profit from this partnership.
An example on a larger scale would be the partnership that Starbucks and Barnes & Noble stores have. Customers who shop at Barnes & Noble are more likely to buy a beverage from Starbucks than to leave and purchase a drink from another store. On the flip side, Starbucks patrons are more likely to purchase goods from Barnes & Noble than if they had visited a freestanding Starbucks store.
Horizontal Market Goals
Horizonal markets are designed for companies to share resources and save money as they achieve common business goals. Such partnerships are ideal for any company, but especially for those with limited financial resources and for those just starting out.
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