What is Differentiated Marketing?
Differentiated marketing is a marketing strategy where companies create campaigns targeting two or more market segments or customer groups. These market segments can just be different customer segments that are split into groups through benefit segmentation or by segmenting between different attributes.
For example, a retail store will definitely sell a set of different products for different user bases. Now, a single marketing campaign can't be designed to target all the demographic user groups. So in that case, the retail store will create campaigns targeting 2 or more segments of customers that in the particular season will bring in maximum sales.
This will ensure that the store targets relevant but selective segments and at the same time gets good conversions.
Differentiated marketing is one of the three main marketing strategies which include undifferentiated marketing and concentrated marketing. The goal of these marketing strategies is to reach customers in a meaningful way that powers a generic marketing campaign and brings in more revenue.
Steps to create a Market Strategy
There are a few simple steps that can be used to create a comprehensive market strategy. We have listed them down below.
- Define your customer - start by determining your target audience for your products. Any information about the target customer attributes is helpful here. You can define your customer's age group, gender, location, preferences, etc. More precisely you define your customer group the better campaign you can build.
- Identify customer needs - next, determine all the customer needs of your target user base. You can find the customer's needs by directly conversing with the customers or through brainstorming sessions. Feedbacks, surveys can be really helpful in this case.
- Segregate customers into different segments - based on your target customers, you can further segregate them into different groups.
- Create strategies for each segment - this bit is straightforward, next you will have to create offers or discounts for each segment group. A typical offer can be a “Buy 1 Get 1 Free” package on a set of products.
- Promote the product - now that you have all the essentials, the final step is to effectively promote these products. Here, brands can use promotional channels that their target audience frequently uses.
Differentiated Marketing VS Undifferentiated Marketing
The strategy of creating one or more marketing campaigns targeting one or more segments of customers is the differentiated marketing strategy. The strategy by nature is focused on a targeted audience group that has certain characteristics.
The undifferentiated marketing strategy, on the other hand, aims for mass appeal. The goal here is to reach as many customers as possible. So the campaign or the advertisement part of the campaign will be generic.
Both these strategies can be used for different use cases. A new brand looking to sell a product that is highly popular among a large pool of customers can use the undifferentiated marketing strategy. Here, there is no need for focused campaigns as a variety of customers can find the use of that product.
One example of an undifferentiated product can be toothpaste brands. With a product like this, the brand can sell unlimited toothpaste, with a fixed price and singular marketing campaign.
Differentiated marketing can be used by brands that have a range of products that all target a specific demographic segment. For example, there are different types of beauty care products for different skin groups. The messaging for each of these products can be different. So, brands will create different campaigns to target each one of them.
Differentiated Marketing VS Concentrated Marketing
Concentrated Marketing is the 3rd marketing strategy that, as the name suggests, concentrates on only one segment of customers. The strategy is midway between differentiated marketing strategy and undifferentiated. Here, the strategy is focused but only on a singular segment.
For example, a product specifically designed for teenage girls should focus on appealing to that demographic itself.
The marketing campaigns in the case of concentrated marketing will be much different than differentiated marketing. The campaign will have to focus on a singular segment here, so the campaign will be very specific.
An example here could be personal hygiene products. These products are built for a specific age group with a specific problem area. So, demographically, a bunch of different segment groups can be targeted here. But in the case of teen fantasy novels, targeting teenage girls, the audience group rarely expands beyond the main base.
In both cases, the campaign in their scope and reach will be built differently. One will be lased focused and more specific than the other.
Differentiated Marketing Strategy Example
The scope for implementing differentiated marketing is endless. Here are a few examples.
Let’s consider a books store selling a range of books in a variety of domains. The store has books for children and adults all divided into shelve based on genre. The categories here can be very specific. For example, books can range from parenting newborns to teenage parenting guides. Although books stores don't go all out with marketing campaigns to promote their products. You can understand from this example how a single store can sell such a diverse set of highly targeted products.
Similarly, let's consider a vegan restaurant. The restaurant serves both healthy and not-so-healthy food items all recreated to be vegan. Now although the restaurant focuses only on vegan food, a variety of different customers can visit the restaurant. Healthy vegans, vegans looking for vegan sweets, customers looking for a vegan burger, among others.
Finally, let’s consider a shoe store. The store makes highly specialized sports shoes targeting professional players in different sports. The lineup has shoes for outdoor sports, indoor sports, shoes for specific weather conditions, and terrains. But on the other hand, it also targets customer groups that are looking for a high-quality product with a good brand value. The store can target both groups of people.
Overall, each of these examples demonstrates how a company can divide its audience segment into different groups to fulfill each of their needs without ignoring any particular group.