Marketing Management: Undifferentiated Marketing vs Concentrated Marketing vs Differentiated Marketing

Question (MBA 2016) - Explain how Undifferentiated Marketing, Concentrated Marketing and Differentiated Marketing differ from each other. Explain with examples.

Answer: Once a company evaluates different segments and decides which segments it can serve the best and then market-targeting strategies are laid out. Based on target-market, it can be of the following types:

① Undifferentiated Marketing (or mass marketing)

② Differentiated Marketing (or segmented marketing)

③ Concentrated Marketing (or niche marketing)

Let us take an example of tourism company which wants to market tourism using branding and events. Here are the important differences between the three marketing strategies:

Strategic Factors	Undifferentiated Marketing	Differentiated Marketing	Concentrated Marketing
Target Segment	A broad range of customers.	Two or more well-defined consumer groups, market segments identified.	A well-defined consumer group, niche segment
Product or Service	Ignores market segments and offers a single product or service to the whole market.	Offers a separate brand of product or service for each consumer group (sizeable and distinctive).	Offers one particular brand or service, tailor-made or personalised catering to one particular market segment.
Alternately called	Mass Marketing	Segmented Marketing	Niche marketing
Promotion	All types of media. Newspapers, radio or tv advertisements, billboards	Suitable media based on market segments e.g. local advertisements, pamphlets	Suitable media based on the identified segment e.g. sending emails or tele-calling persons of certain income-groups
Distribution	All possible outlets e.g. kiosks, retail, intermediaries etc.	Suitable for different segments e.g. product available through online stores or retail outlets.	Suitable for that particular segment. e.g. A fashion company offers personalised tailer made dresses for office goers via its website.
Price	One popular price range	Distinct price ranges for different segments	One price range for tailored for the particular segment.
Challenges	Difficulties arise in developing a product or brand that will satisfy all consumers. Very often have competed with more-focused companies.	Increases the costs of doing business e.g. have to manufacture and manage 10 different products for 10 different segments.	Increases risk considerably. If that niche segment fails, business suffers greatly.
Suitability	More suited for uniform products e.g. fruits, steel	Products that can vary in design e.g. laptops for business purpose, graphics artists etc.	Products that can vary in design. e.g. cars, mobiles
Example	Tourism company offers cheap air tickets to Kerala.	Tourism company offers different Kerala package tours.	Tourism company offers honeymoon Kerala package including houseboat stay in backwaters.