Differentiated marketing
What Is Differentiated Marketing?
Differentiated marketing, also known as segmented marketing, is a strategy where an organization chooses to operate in several distinct market segments (Ayantunji Gbadamosi et al., 2013). Unlike undifferentiated marketing, which treats the market as a whole, this approach requires designing different products and marketing mixes to suit the specific needs of each group (Ayantunji Gbadamosi et al., 2013)(CH Esterhuyse R van der Merwe et al., 2016). It is widely used in industries like automobiles, cosmetics, and fashion to reach diverse customer bases and increase overall market share (Ayantunji Gbadamosi et al., 2013).
Core Mechanism of Differentiated Marketing
The process functions through the STP framework: segmentation, targeting, and positioning (Nirmalya Kumar et al., 2004). Marketers divide a heterogeneous market into homogeneous groups that respond similarly to tactical tools like the four Ps—product, price, place, and promotion (Nirmalya Kumar et al., 2004)(Satinder Dhiman et al., 2012). Deep differentiation is achieved by building competitive advantages into the value network, which includes cross-functional activities like R&D and customer service to provide distinguishing benefits that are sustainable and avoid commoditization (Nirmalya Kumar et al., 2004).
Your digital library for Differentiated marketing and Marketing
Access a world of academic knowledge with tools designed to simplify your study and research.- Unlimited reading from 1.4M+ books
- Browse through 900+ topics and subtopics
- Read anywhere with the Perlego app
Essential Components and Requirements
Implementation requires identifying physical distinctions, such as product features and performance quality, or service distinctions like delivery and customer training. Companies must conduct research to classify customers by needs and analyze the profitability of segment-linked offerings (Dimitris N. Chorafas et al., 2006). While this strategy can lead to higher sales, it also involves higher costs due to the complexity of managing multiple production and marketing activities for different consumer groups (CH Esterhuyse R van der Merwe et al., 2016).
Outcomes and Strategic Significance
Differentiated marketing aims to establish a firm market position and enhance a buyer's willingness to pay higher prices by persuading them to favor one supplier over another (Tony Ellson et al., 2004). By focusing on organizational strengths and relationship marketing, firms can create a distinctive place in the consumer's mind (Dimitris N. Chorafas et al., 2006)(Jean-Jacques Lambin et al., 2012). This strategic approach allows businesses to adapt to changing market demands and satisfy precise customer wants more effectively than traditional mass marketing methods (Satinder Dhiman et al., 2012)(O. C. Ferrell et al., 2018).