Before selecting target markets, the firm must decide on their market coverage strategy.
Market coverage strategies
Three market coverage strategies are possible.
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Undifferentiated marketing - mass marketing - one marketing mix for the whole market
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Differentiated marketing - target marketing - separate marketing mixes for each distinct segment to be targeted
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Concentrated marketing - niche marketing - one marketing mix tailored to the needs of one or a few market segments.
Undifferentiated marketing
Having segmented the market, the firm may decide that an undifferentiated or mass- marketing approach is relevant. This would infer that the needs and wants of various market segment do not differ enough to warrant the development of a unique marketing mix for each segment. Therefore, the firm focuses on developing a marketing mix that caters for the common needs and wants of the market. This approach relies on mass production, advertising and distribution. Provided the needs of the market are not differentiated, this strategy can be quite cost-effective. For example, your local service station would probably take this approach. it is becoming increasingly harder for me to think of examples of mass marketing. I used to use things like energy and postal services. However, while Ergon Energy takes this a mass marketing approach with its consumer market, it uses a differentiated strategy for rural, business and large commercial clients. Likewise, Australia Post now serves a variety of market segments, including the market for personalised stamps!
Differentiated marketing
A differentiated marketing approach acknowledges that different target markets require a different marketing mix. This approach involves selecting a few key target markets and developing separate marketing mixes to cater for those needs of those distinct market segments. Provided the segments are meaningful and distinct, this can be a very profitable strategy. Rolex watches takes this approach by catering quite specifically to the needs of their various markets. Which Rolex watch would best suit you - click on About You? Pepsi-Cola also takes this approach with a wide range of products to meet the various needs of its target markets.
Concentrated marketing
Concentrated or niche marketing involves selecting one or a very few segments and developing a unique marketing mix that really caters to the specific needs of that market. Jaguar motor company takes this approach as it focuses on the prestige segment. Can you think of some other examples?
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