Market Targeting Options
Before engaging in marketing campaigns and promotions businesses need to decide who they would like to aim their products at. This involves analysing and splitting (segmenting) the market into different sectors. The most effective way to segment the market will depend on the product and the business producing the product. After segmentation firms can adopt one of three strategies to target customers.
Option 1 Undifferentiated Marketing
Undifferentiated Marketing is marketing that does not target a particular segment of the market. Instead the firm adopts one marketing strategy and hopes that it will appeal to as many people as possible. Sometimes referred to as mass marketing, Undifferentiated Marketing usually involves targeting the whole market with one product. Coca Cola's original marketing strategy was based on this format when they offered one product, which they believed had universal appeal. However now that Coca Cola has introduced other products, it has changed its marketing strategy to Differentiated Marketing. An Undifferentiated Marketing strategy can be cheaper than the other strategies because their is only one product to produce, distribute and market. It can also be cheaper because the firm is not targeting multiple market segments. The disadvantage is the challenge involved in producing a product (and marketing campaign) which is universally appealing enough to make it profitable.
The Undifferentiated Marketing Diagram below shows that Undifferentiated Marketing, targets the entire market and not particular segments of the market.
Option 2 Differentiated Marketing Strategy
If a firm decides to target several segments of the market, it is engaging in a differentiated marketing strategy. Under a Differentiated Marketing Strategy, a firm will develop products and services with separate marketing mix strategies for each of the segments chosen by the firm. An airline company offering first (segment 1), business (segment 2) and economy class tickets (segment 3) , with separate marketing programmes to attract customers for each of the ticket types is an example of differentiated marketing strategy.
The Differentiated Marketing Diagram below shows that a Differentiated Marketing Strategy, targets marketing at different segments of the market