Study Notes for differentiated and concentrated marketing

What is undifferentiated marketing?

Undifferentiated marketing occurs when a marketing mix is designed for the general needs of an overall market, without regard for the needs of the different segments in that market.

What is concentrated marketing?

Concentrated marketing is focusing the firm’s market entire offering solely on the needs of one defined target market.

What is differentiated marketing?

Differentiated marketing is the targeting of two or more market segments, with separate and distinct market offerings (that is, different marketing mixes), which have been designed to closely meet the needs of those particular segments.

Advantages of each targeting approach

Advantages of using undifferentiated marketing

  • Good targeting approach for commodity or other generic markets
  • A suitable when there is minor differences between segment needs
  • May be a suitable approach for strong global brands seeking economies of scale, e.g. Starbucks
  • Good approach for smaller markets or emerging sub-markets

Advantages of using concentrated marketing

  • Most suitable targeting approach for small firms and new players
  • Suitable for firms with limited capability sets and a limited product mix
  • Best approach for niche marketers
  • Good to use when the firm has limited resources
  • May be suitable for use during tough economic times

Advantages of using differentiated marketing

  • Usually required when pursuing long-term growth
  • Necessary if the current target market is becoming too competitive or lacks organic growth
  • Often necessary to protect market share
  • As a defensive or aggressive competitive move
  • When the firm has resources or capabilities that can be leveraged into new segments
  • Good to use when there are major differences between segment needs