What is vertical branding? What is horizontal branding?

Published by Colin Finkle on

A vertical branding strategy strives for better products, while horizontal branding strategy pushes for different.

Executive Summary | Abstract | TL;DR

Vertical branding is when a company differentiates itself as “better” on an objective scale like miles-per-gallon, megapixels, etc. For example, Hyundai chose a vertical brand strategy for its IONIQ hybrid car touting it as “the most fuel-efficient car in America” with it’s 58 combined mpg.

Horizontal branding is when a company differentiates its product as “different” and subjectively more appealing to some people. For example, MINI plays up it’s fun and quirky perception to appeal to stylish people.

These strategies are not mutually exclusive. Most companies start with a vertical brand strategy and move to a horizontal brand strategy when the marketplace is established.

3 minute read | 650 words.

Vertical Branding Strategy

Vertical differentiation or a vertical branding strategy is when a brand differentiates its product as “better.”

A company with a vertical brand strategy utilizes a technology, material, structure or process that makes the product better in some objective measurement. These objective measurements include horsepower, gigahertz, miles per gallon, etc.

For example, Nikon’s D4S features a sensor capable of 100 to 25 600 ISO. A camera’s sensitivity, or ISO, is an objective measure of performance in low light, regardless of other subjective features of the camera, like position and feel of the buttons.

Nikon D4S - ISO 100-25600 video still

Advantages:

  • Simple sales proposition
  • Free promotion in media
  • Halo effect to other products in the brand’s portfolio

Disadvantage:

  • Hard to maintain
  • Never a permanent strategy
  • May be a measure your potential customers are not concerned over

Examples:

  • Hyundai IONIQ having better fuel economy than all other hybrids
  • Samsung making a 2.5in Solid State Drive with 30 TB of storage
  • Verizon FIOS offering 950 Mbps internet download speed

Horizontal Branding Strategy

Horizontal differentiation or a horizontal branding strategy is where a brand differentiates its product as “different.”

I company with a horizontal brand strategy uses design, engineering, or associations to make their product more appealing to the needs of certain types of people. There is no objective way to rank their product; some people will like them, others will not.

For example, GoPro made a rugged camera. Ruggedness is a subjective measure; it depends on the person whether they would define a rugged camera as a better camera. An action sports enthusiast will appreciate a tough GoPro, while a portrait photographer wouldn’t.

Advantages:

  • Customer loyalty
  • Market less sensitive to price
  • Defensible position

Disadvantage:

  • Requires media spending
  • Subject to ups and downs of the category
  • Innovation can whipe out your position
  • Consumer tastes change
  • Demographics will force you to change.

Examples:

  • Beats headphones having a bass-rich sound
  • MINI making a quirky and fun small car
  • Basically everything in the fashion industry

I visualize it as cartesian access (see below). The vertical access, i.e. the y-axis, is the quality of the product which is generally the same as the cost. The horizontal axis, i.e. the x-axis, is for taste or preference. Some people may like something on one side, and other people may like something from the other side.

Not mutually exclusive

Vertical branding and horizontal branding are not mutually exclusive. Many products have high-performance measures that they promote, but also subjective aspects that they also mention.

Historically, most brands have followed an upside down “L” pattern. A startup company makes a product with better technology and shouts that advantage from the rooftops. When they are established in the marketplace, and their competitors have caught up, they pivot to a horizontal brand strategy and make themselves different while still trying to be better.

For example, early Apple came out with the first color personal computer, but they quickly moved into a strategy of appealing specifically to creative professionals.

Another example is Samsung Galaxy. For the first decade of the smartphone revolution, Samsung was out front in objective measures like processor speed, screen resolution, and camera sensor resolution. That was a grand marketing strategy when a faster phone translated into a better experience, but now the technology has slowed down, and any improvement in speed is just icing on an already tasty cake. They have now pivoted to court the video content creators, social media influencers, and in turn millennials.

References

Vertical branding according to brandUNIQ

Forbes: Vertical Brands Crash. Horizontal Brands Fly. All You Have To Do Is Ask.


Colin Finkle

Colin Finkle is a brand marketer and designer with ten years of experience helping Fortune 500 companies tell their story at retail. You can see his work at finkle.ca

2 Comments

David Wilson · August 1, 2019 at 12:48 pm

Very interesting, thanks for explaining the concepts. I created an elastic belt, different than the typical braided elastic belt, and named it the Betta Belt (because it was supposed to be “better”). So in retrospect, I suppose I was trying a vertical brand strategy, but in actuality it was a horizontal brand strategy, because my belt was not objectively better, just different (since comfort is subjective). Now that there are numerous generic Chinese competitors, should I be trying to position my brand as better (e.g. higher quality) than those, or different (e.g. American company, custom designed parts, etc.)? Additionally, I wasn’t able to trademark BETTA, so ended up transitioning to BESTA, which seems to imply a permanent vertical branding strategy 🙂

    Colin Finkle · August 12, 2019 at 10:47 am

    Hi David. I am so thankful you shared your story of the BESTA belt. Don’t get discouraged about the Chinese competitors. I would not even acknowledge the knock off belts in your messaging; as soon as you do, you go down to their level in the minds of the consumers. You want to be comparing your belt with other premium, more standard belts so that you are the “different” option on the top end of the market.

    I am sure you know about them, but just in case, check out Mission Belt. https://missionbelt.com/ They have done a great job creating a branded moat to protect themselves from knock offs.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.