A differentiated marketing strategy is one in which the company decides to provide separate offerings to each different market segment that it targets. It is also called multisegment marketing. Each segment is targeted in a particular way, as the company provides unique benefits to different segments.
What is Differentiated Targeting Strategy?
To understand the concept of differentiated targeting strategy, it’s important to know the meaning of targeted market segmentation. According to experts, a company can achieve growth prospects by focusing its efforts on targeted market segments. This leads to enhanced customer satisfaction.
This principle of differentiation strategy can be used to effectively reach the target market. The company decides to avoid mass production of similar products or services. The product is modified to suit the requirements of each target market.
When a company adopts this strategy, it chooses to offer its products and services to more than one product-market segment. Such a firm designs and manufactures a separate product for each segment. Each market segment is targeted in a particular way, as the company aims to capture a specific group of consumers. This approach focuses on the needs of each market segment, since each segment has a specific set of needs.
This differentiation strategy can be adopted by a manufacturer that offers different sized products for the same product category. It can also be a firm that sells similar products to different segments through divided marketing channels. The idea here is to provide the same product or service to different sets of customers through separate marketing channels. Some companies create different marketing strategies for each segment. This helps to maximize the profitability of the business.
Target Market Segmentation and Differentiation Strategy
Differentiated targeting strategy is used by a marketer that wants to identify the different wants and needs of consumers to arrive at an understanding. It helps in developing different means to satisfy different sets of needs. The company decides to avoid mass production of similar products or services. A company adopts this strategy by choosing to offer its products and services to more than one product-market segment.
This differentiation strategy can be adopted by a manufacturer that offers different sized products for the same product category. It can also be a firm that sells similar products to different segments through divided marketing channels. The idea here is to provide the same product or service to different sets of customers through separate marketing channels.
Some companies create different marketing strategies for each segment. This helps to maximize the profitability of the business.
It is also important to understand that targeting one market segment, may not be enough to achieve success. In order to capture a wider market, allied segments must also be dealt with simultaneously. The best results are achieved when a company chooses to combine multiple segments in the targeted marketing strategy of the product or service.
The Benefits of Differentiated Targeting Strategy
a) Maximizes profitability
Differentiated targeting strategy leads to enhanced profitability. The company is able to gain the support from the maximum number of consumers. This gives better results from the marketing efforts and marketing campaigns and it helps in maximizing profit.
b) Improves customer satisfaction
Customers always want to feel valued. A company that targets a specific segment of the population with the same product or service stands to gain the satisfaction of those target market segments. As a result, the company gains brand loyalty and it gains goodwill.
c) Gives a competitive edge in the market
Secondary benefits could include precise and clear segmentation of the market, which results in gaining a competitive edge in the market.
d) Improved efficiency
While the company will have to spend extra money to develop a different product for each segment, it can still improve efficiency. The extra investment on research and development is rewarded as it helps a company to realize the full potential of its revenue.
e) Helps in minimizing costs
These benefits include cost efficiency, since a company does not have to manufacture various versions of one product for different customer segments. This helps improve its profitability too.
It is also important to mention that the marketers hope that the different segmented groups will not join hands to eliminate the company from the market. The dangers posed by such a scenario must be part of the business plan from the time of segmenting the market.
Areas of Concern and Caution
A marketer that chooses to adopt a differentiated targeting strategy must focus on the area of segmenting the market. It is important to carefully examine each segment. Otherwise, the marketing efforts will not bear any result.
Differentiated marketing should be carried out with a lot of care and planning. It must be executed with a lot of precision. This can be achieved by thoroughly analyzing the macro environmental conditions prevailing in the market. With a right marketing strategy, money can be saved and at the same time competitive advantage can be gained.
Differentiated Targeting Strategy in Business
The application of this strategy cannot be limited to business only. It can also be applied to other areas such as politics, military, etc.
Suppose that a country decides to invade another country in the name of striking terror among the enemies. It chose to attack in a different way in each area. While some areas were attacked one after the other, some areas were attacked all at once. This kind of military strategy is an example of differentiated targeting strategy in action.
Benefits of Target Market Segmentation
A marketer that segmented the market could gain extra benefits like:
The potential customers or prospects could be classified into groups and the company could be in a better position to satisfy their wants and needs.
Segmenting the market helps a company to create value for all groups of targeted market segments.
The above given comparative study of different types of marketing strategies aims at bringing out their effective features. Based on the present need of the organization, marketers must go for the type of strategy. A company must develop a complete business plan to know well about the pros and cons of each of the strategies. With the right knowledge and information, it can be able to win the support of maximum possible market customers.