Targeted Marketing versus Mass Marketing
Now, we should target those segments we can serve most efficiently and effectively: Market Targeting. After having distinguished between the separate segments in a This may be based on a strong relation between the segment in Following an undifferentiated (mass) market targeting strategy, the. The success of mass-marketing depends on whether it is possible to reach enough A differentiated marketing strategy is one in which the company decides to . so the alumni organization decides to capitalize on classmate relationships. Building Differentiation through Mass Customization / Relationship Marketing. Definition of Collaborative CRM by ECR Europe: “Collaborative CRM is an.
A variety of tools and research techniques can be used to segment markets. Government agencies, such as the U. Census Bureau, collect and report vast amounts of population information and economic data that can reveal changing consumption trends. Technology is also making it easier for even small companies and entrepreneurs to gather information about potential customers. The great product idea you had? You can locate potential customers by looking at blog sites and discussion forums on the Web.
Do you have a blog? Your own personal experience and talking to would-be buyers is an important part of the puzzle. Go where you think would-be buyers go—restaurants, malls, gyms, subways, grocery stores, daycare centers, and offices—and ask questions to find out what they do during the day, what they talk about, what products or services do you see them using, and do they seem to be having an enjoyable experience when using those products or are they frustrated?
Healthy Choice frozen dinners were conceived as a result of questioning potential customers. Two years after the Healthy Choice line was launched, it controlled 10 percent of the frozen-dinner market by concentrating on the health conscious segment Birchall, Once you decide on a particular salon, you have to find it and explain to the new hairdresser how you want your hair cut and hope he or she gets it right.
You also have to figure out what type of credit cards the new salon will accept and whether tips can be put on your credit card. InBackroads, a California company focused on adventure-based travel increased its revenues by creating a personalized marketing campaign for people who had done business with them in the past.
In addition to studying their buying patterns, firms also try to get a better understanding of their customers by surveying them or hiring marketing research firms to do so or by utilizing loyalty programs. A good source for finding marketing research companies is http: For example, if you sign up to become a frequent flier with a certain airline, the airline will likely ask you a number of questions about your likes and dislikes.
This information will then be entered into a customer relationship management CRM system, and you might be e-mailed special deals based on the routes you tend to fly. British Airways goes so far as to track the magazines its most elite fliers like to read so the publications are available to them on its planes.
- Market Targeting – Target Segments efficiently and effectively
Twitter is another way companies are keeping in touch with their customers and boosting their revenues. Many firms, even small ones, are using Facebook to develop closer relationships with their customers. Hansen Cakes, a Beverly Hills California bakery, has about two thousand customers who visit its Facebook page.
Consequently, you will want to interact with some customers more than others. The knife cuts both ways, though. Not all firms are equal in the minds of consumers, who will choose to do business with some companies rather than others. To consumers, market segmentation means: The book described what life would be like after mass marketing.
We would all be able to get exactly what we want from sellers, and our relationships with them would be collaborative, rather than adversarial. Are we there yet? Not quite, but it does seem to be the direction the trend toward highly targeted marketing is leading. Steps in One-to-One Marketing Establish short-term measures to evaluate your efforts.
Determine how you will measure your effort. Will you use higher customer satisfaction ratings, increased revenues earned per customer, number of products sold to customers, transaction costs, or another measure?
Thus, we arrive at the actual core activity of market targeting. Market targeting can take different forms. These are referred to as levels of market targeting. A firm can target very broadly, which is called undifferentiated marketing.
5.1 Targeted Marketing versus Mass Marketing
Market targeting can also be very narrow, which is called micromarketing. If it is somewhere in between, it might be differentiated or concentrated market targeting. We will now look at these four different market targeting strategies that go hand in hand with the segments we choose. Four Market Targeting Strategies Undifferentiated Mass Marketing — Broad Market Targeting If we look at the whole market as a pie, following the undifferentiated market targeting strategy, we would focus on the whole pie.
We would not select the slice that appears to be most delicious, but try to eat all of them. Thus, there is actually no targeting at all. Following an undifferentiated mass market targeting strategy, the company decides to ignore differences between market segments and to focus on the whole market with one offer.
Therefore, the firm has to focus on what the whole market has in common in terms of the needs of consumers, rather than focusing on what is different. Since the company wants to address the whole market, it needs to design a product and a marketing programme that will meet the needs of and appeal to the largest possible number of buyers.
There might be some doubts whether this market targeting strategy is the right one. Certainly, difficulties can arise in developing a product that is capable of satisfying all consumers. In addition, companies that follow this strategy often struggle to compete with those companies that pursue a more focused strategy. Those focused companies simply do a better job at satisfying the unique needs of specific segments and niches, whose presence cannot be denied.
Difference Between Mass Marketing and Differentiated Marketing | relax-sakura.info
Differentiated Segmented Market Targeting A differentiated market targeting strategy means that we decide to target several market segments and also design separate offers for each.
To return to our previous example, the pie, we would now select the most delicious ones and focus on eating these.
Most large companies follow the differentiated market targeting strategy. For instance, a car company produces several different models of cars, and often even offers different brands. Fiat, for example, consists of more than the core brand Fiat. Think of Ferrari, Alfa Romeo and Lancia.
Each brand targets its own segment of car buyers. Thus, we select several segments to serve and design separate offers for each. The reason of pursuing this market targeting strategy is that higher sales and a stronger position within each segment can be the consequence.
Certainly, a strong position within several segments generates higher total sales than an undifferentiated marketing across all segments. However, differentiated market targeting strategies also increase costs.
Difference Between Mass Marketing and Differentiated Marketing
These come from the fact that different offerings have to be developed for each segment. Instead of producing one product 10, times, the company has to produce 10 products 1, times each. Also, the development of separate marketing plans for each segment involves additional research, analysis, planning and forecasting.
Consequently, the company should weigh increased costs against the benefits when deciding on a differentiated market targeting strategy.
Concentrated Niche Market Targeting To stay with our example: If we do not want to eat the whole pie, neither several slices, but only one small slice that has a special criterion others do not have such as a nut on top, we go for the concentrated niche market targeting strategy.
Following the concentrated market targeting strategy, the company focuses on one or a few segments or niches in a market. The aim is then to reach a large share in this segment or niche, instead of going after a small share of a large market. Why should a company do so? Clearly it will be able to achieve a stronger market position in the chosen segment because its knowledge of the consumer needs in the niche is larger. Also, it may acquire a special reputation for delivering exactly what the consumer wants in that niche.
The company can fine-tune its products, marketing programmes and prices to the specific needs of consumers in the niche. Therefore, its marketing becomes more effective. But marketing may also become more efficient, because the company can tailor its offerings, channels and programmes to the needs of those consumers it can serve best and most profitably.
The difference between a niche and a segment is the size. While a segment is rather large and will in most cases attract several competitors, a niche is quite small and may be focused on by few competitors only. Niching thus allows especially small companies to focus their limited resources on serving niches.
The key is to find those niches that are overlooked by larger competitors.
Market Targeting - Targeting Market Segments effectively
Micromarketing — Narrow Market Targeting In our example, micromarketing would mean to eat the nut on the already special slice only. In fact, micromarketing means nothing else than tailoring the marketing programmes and products to the needs and wants of individual consumers or local customer segments. This is the narrowest market targeting strategy possible.
Instead of seeing a customer in every individual, we see the individual in every customer. We can tailor our products and programmes to suit the tastes of specific locations of specific individuals.
Therefore, micromarketing can take the form of local marketing and individual marketing. Under the local marketing strategy, we tailor brands and promotions to the specific needs and wants of groups of local customers.
These may be cities, neighbourhoods etc.
The most extreme market targeting strategy option is individual marketing. Then, we tailor our marketing programmes and products to the needs of individual customers.Advantages And Disadvantages Of Relationship Marketing
This is also called one-to-one marketing, markets-of-one marketing and mass customisation. Today, this customisation for individual customers is facilitated by new technologies, such as databases, robotic production and flexible manufacturing. In micromarketing, relationships with the few customers the company focuses on is of utmost importance.
The company can simply not afford to lose one of the few, but highly profitable customers. Factors influencing the Choice of the Market Targeting Strategy Which market targeting strategy is chosen depends on many factors. None of the strategies above works best in every situation. Rather, the market targeting strategy depends on several characteristics of the company. When choosing a market targeting strategy, the company should consider: