Undifferentiated targeting occurs when the marketer ignores the apparent segment differences that exist within the market and uses a marketing strategy that is intended to appeal to as many people as possible.
What is Undifferentiated Targeting Strategy?
Undifferentiated marketing is one of the three target market strategies. In other words, it’s an approach to marketing that classifies potential buyers of a product or service only by age, income level, gender, geographic region, education level, etc. With undifferentiated marketing, the nationalities, ethnicities, religions, social standing, lifestyles, hobbies, favorite sports, etc are not taken into account in how the people are categorized.
Undifferentiated Targeting Strategy
According to Peter Todd, a Harvard Business School marketing professor: “A marketer with an undifferentiated strategy thinks in terms of broad customer groups, but he knows little about what’s going on inside the customers’ heads.”
Undifferentiated targeting can be a simple and straight forward strategy. It may be very effective for some companies. For example, some national brands are marketed to the general public in an undifferentiated manner. These are companies that have determined that their products have a broad enough consumer base for them to gain significant market share, regardless of who their customers are. The marketing strategy can be summed up as “if you don’t know who your customers are, you might as well treat everyone the same.”
When marketers employ the undifferentiated target market strategy, they are essentially saying: “We think we have the solution to a problem that a lot of people have. We don’t know who those people are, but we hope that if we build it they will come.”
Benefits of Undifferentiated Targeting Strategy
The users of this marketing strategy may have a very clear idea of the type of person they are going to market to, but they don’t generally take the time to create a mental picture of what those people look like. By not going beyond the basic demographics, the company is able to avoid the time and costs of targeted segmentation research. After all, the company is trying to appeal to as many people as possible. Therefore, to focus on the “picture” would be a waste of time.
The company just markets to the masses, and cans the idea of specific group targeting.
Undifferentiated Targeting Strategy
When a company employs an undifferentiated strategy, it pretty much relinquishes any control over the uniformity of the products or services it offers. When the company doesn’t focus on how the product or service correlates with the customers’ unique wants and needs, does that mean that they cease doing any research on their target market? Not at all.
For instance, they may post a survey on their website. They ask this question, because they don’t know who the undifferentiated target market is. They simply want to gauge the level of market demand for their product or service idea.
Disadvantages of Undifferentiated Targeting Strategy
Sometimes an undifferentiated strategy can be costly for a business. When a company fails to focus on the unique needs of different market segments, then the chances of a breakdown in customer service increases dramatically. If the business can’t meet the needs of its customers, then it will likely to have a lot of unhappy people.
A study by the NPD Group revealed that “70 percent of adults say they are loyal to brands, yet 50 percent also say their loyalty to brands has decreased in the past year.” There is no doubt that the way in which loyal customers are treated does have something to do with their loyalty. If a company employs an undifferentiated strategy, it may find it difficult to satisfy its customers, simply because there is no one to serve.
It Sa | Undifferentiated Targeting Strategy
Marketing to the masses may be a gamble for a company. In fact, it may be so risky that potential investors would turn away from the company. What would the investors do if there is no niche market available to the business? For all they know, the company might be on a downhill spiral, and it may not recover. Also, investors may feel that the company doesn’t have the research capabilities to segment the market properly and effectively.
Apparently, there are some very good reasons for a business to not move forward with an undifferentiated strategy. It is important for all marketers to give some thought to the fact that the customer is not always right. It is just as important for all businesses to invest some money and some time to research new opportunities and additional markets. This is one of the cures to the “undifferentiated strategy” disease.
Undifferentiated Targeting Strategy can be a very good way to test the market and what, if any, gaps exist. Sometimes it is better to go into an underserved market with an undifferentiated strategy to gauge interest. If the interest is high, then the company can start segmentation and transformation strategies.
Undifferentiated Targeting Strategy | Use it or Lose it
It is true that using an undifferentiated strategy will allow a corporate division to assess the overall interest in the product or service. Sometimes, it is necessary for businesses to do a little bit of market research to get a better picture of the market demand. Undifferentiated targeting can be effective and it is not the most unreasonable strategy out there.
However, it is also important to remember that a business is working on behalf of the consumer. It is important to remember that the business is operating in a free-market economy, and is answerable to the consumer. Undifferentiated targeting will work for some businesses, and will not work for others. If a company is going to embark on a plan to market on a nation-wide or global scale, then it should do its research. If the research is supporting the undifferentiated strategy, then give it a shot.
If a company has a business plan that includes a list of products that they are going to sell to everyone, then they better make sure that they are ready to deliver. If they can’t, it may be time to modify the business plan.
Undifferentiated Targeting Strategy
If a business has an idea of what it wants to do with different products and groups of people, then it should take the time to do the research and figure out what the people want. This will help the business to stay on the cutting edge of business innovation.
Undifferentiated targeting may work for some businesses, but it may not work for all. It might take some time to get the right idea. It is important to remember that transforming a business is not an overnight process. However, when a company effectively and correctly targets a market segment, it will have a competitive edge over the business that doesn’t do any research at all.
The customer is not always right, but the customer is always there to reward or punish a business through their buying choices. Therefore, it is up to the business to take the time to research the needs of the market before going out and declaring to the public: “We will market to everyone!” It might be a good idea to think twice.
Undifferentiated Targeting | Is it a Strategy of Last Resort?
These days, it can be very difficult to market to a niche market with success. Market segmentation has been a successful strategy for most businesses that have gained success by targeting specific groups.
Remember that the consumer doesn’t always know what they want, because they don’t know what they want until they see it. Sometimes the consumer may not comprehend the difference between a product for $1.99 and one for $2.00. They may just be willing to pay the price difference between the two products.
However, many people don’t realize that the market is changing. Undifferentiated targeting has been used as a weapon against big business, so they have responded by segmenting the market. The appearance of Amazon and other online retailers has created a market place where people can go in search of the products and services that they want. There is a smaller percentage of the market that is interested in national brand products.
National brands are now taking the local store approach, and focus their marketing on the local market. The local market is a market segment that was once alienated because of the distance from national brand national stores. Now, the local market is being recognized as a viable market segment because a citizen can access it with a few keystrokes. It is still the potential segment market of the future. After all, judging a book by its cover can be risky business.
Undifferentiated Targeting| Conclusion
The fact is, the Internet has created markets that corporations did not necessarily want. However, the market has spoken and there were many companies that adapted and rose to the challenge. Undifferentiated targeting has a role to play. It may be the way for a company to test the market. If there is market support, then the company will know that it can take the time to do the research.
After all, it is better to know what the market wants before a company invests its money in a product or service line. There are already some incredibly successful businesses are using the undifferentiated target strategy. However, it can be important for a marketer to keep many fingers on the pulse of the market.
The target market has spoken, and they want to be treated as a group. Undifferentiated targeting doesn’t treat one group any different from another. Sometimes, it is just too hard to see past the differences. This strategy works when a business is serving all demographics, all races, and all ages. It can still be very effective.
However, this strategy doesn’t give a business much opportunity to learn more about the consumer and what marketing approach they respond to best. It is understandable that a business might want to make the most minimal effort to produce the most income. However, if a marketing department is doing their job, then they shouldn’t just market to the biggest market. If a business wants to maximize its marketing efforts and its marketing dollars, then it needs to take the time and money to research the market that it is hoping to target.
Remember, it is a free market, and the consumer responds to products that satisfy their needs. Undifferentiated targeting is the easiest way for a company to test the waters. If it is the right course of action, then it works. However, if it doesn’t work, then it should be modified. A business should be responding to, and anticipating the needs of the marketplace.