No Such Thing as a Functional Vertical

July 29, 2008

Generally it is not considered polite to correct someone’s grammar in public. So forgive me for this post.

I’m starting to hear even seasoned marketers use the term ‘functional vertical’. That’s a contradiction. There many types of market segmentation, but three big ones come to mind:

  • Vertical Segmentation – segmenting by industry. Why is this called vertical? For the same reason that vertical integration is called vertical integration – it refers to acquiring companies or competencies in the value chain for a given industry
  • Functional Segmentation – segmenting by role or function within a company
  • Geographic Segmentation -segmenting a market by region

Why say ‘functional vertical’ when ‘functional segment’ is easier? And you have the added benefit of not contradicting yourself.


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