Mass and differentiated marketing

A crucial task in the development of marketing strategies is the process of market segmentation.  This is the process of identifying different customer groups within your market.  The process of segmenting your market can take account of various factors such as age, social class, income bracket, education level and cultural differences.  However a market is segmented the identified segments must be:

  • measurable – in terms of size, purchasing power and profile
  • accessible – there is no point in identifying a market you cannot service
  • substantial – it must be of a large enough size to be profitable and to sustain business over time
  • differentiable – conceptionally distinguishable and able to respond to differing marketing mix elements
  • Actionable – you must be able to service the segment appropriately and have the resources to do so.

So once you have audited your market, segmented your customer base and set your goals, you need to develop a marketing strategy.

There are two forms of marketing strategy:

  • Undifferentiated (or mass marketing)
  • Differentiated (or segmented marketing)

An undifferentiated marketing strategy is where your business presents a single, all-encompassing marketing mix to all consumers.  Differentiated marketing is where your business develops different mix elements for different consumer segments and targets those mix elements appropriately.

It is rare to see a modern company using an undifferentiated marketing strategy.  It only works where you can meet the common needs of all consumers.  It is a strategy for lives basics and it leaves little opportunity to add value.  It may also take excessive resources to meet the needs of the mass population.

So most firms apply a differentiated marketing strategy.  They target specific customer groups each of which is presented with a different marketing mix.  For example a single airline jet will have first class, business class, standard and economy.  The basic product is the same, air transport, but there will be huge differences in the price charged and the service offered by the airline.  The promotion of a standard air fare to consumers will differ greatly from the promotional activity used to attract business people or rich celebrities.

Small businesses may have no option but to concentrate on a single market segment. They may not have the resources to do anything else.  This is referred to as concentrated or niche marketing. Rather than trying to attract a small share of a large market; niche businesses try to gain a large share of a small market.   Niche marketing requires the development of a marketing mix which is tailor to select customer groups.

In recent years, the concept of micro-marketing has been developed.  This is a return to the concept of artisan production e.g. when a cobbler would make shoes to fit a particular customer or a cabinetmaker would design bespoke furniture to meet a clients individual needs.  There are two forms of micro-marketing:

  1. Local marketing – where a companies offer will be tweaked to meet the expectations of a customer from a particular area or town e.g. a pub chain ensuring beers from a local micro-brewery are stocked.
  2. Individual marketing – where the marketing mix and the product is designed with a particular individual customer in mind. Often this now involves the use of IT.  For example, Brompton bikes allow customers to choose from 1600 different elements for their folding bike; from colour, to gearing, to type of saddle, etc.  The combination of these factors means that billions of combinations are possible.  In effect the Brompton consumer receives a bike built to their personal specification.

When choosing which strategic approach is suitable for your business, you need to have a good knowledge of the resources available to your business, the technological level of your market, the position of your product in its life cycle, the level of market volatility and much more.

Philmus Consulting can help your business to develop structured marketing plans to ensure you are properly segmenting your market and applying the appropriate type of strategy.