Vertical Market

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DEFINITION of 'Vertical Market'

A group of companies that serve each other's specialized needs and that do not serve a broader market. A vertical market is tightly focused on meeting the needs of one specific industry. Vertical markets are focused on a single niche, such as creating payroll software for start-up Internet companies. A horizontal market, by comparison, is able to sell its goods and services in more than one industry, and is therefore focused on a wider range of business segments.

BREAKING DOWN 'Vertical Market'

A company that manufactures automobile parts would belong to a vertical market. It would have a limited market of - auto manufacturers and mechanics - for its products. A furniture manufacturer, on the other hand, would belong to a horizontal market because its customer base could include homeowners, apartment dwellers, offices, hotels, restaurants and more.

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