Research
Getting to know your consumer means that you are better able to offer products and services that are more in tune with his or her needs. With more and more products becoming increasingly similar in their physical makeup, competitive advantage is achieved through finding out exactly what the consumer wants and meeting those needs precisely.
We believe that consumer needs are becoming increasingly diverse. These needs can no longer be satisfied by mass strategies that are often used. In this context, market research is the first step to effective and efficient strategies.
A key factor to success in today's market place is finding subtle differences to give the business a marketing edge. A business that targets specialty markets will promote its products more effectively than a business aiming at the "average" customer. What makes the business unique? How can these unique features be promoted to "targeted" customers?
Market Segments
Marketing opportunities increase when customer groups with varying needs and wants are recognized. A business must analyze the needs and wants of different market segments before determining its niche.
Market segmentation is dividing a larger market into submarkets based upon different needs or product preferences. A key factor in competitive success is focusing on little differences that give a marketing edge and are important to customers. Market segmentation matches consumer differences with potential or actual buying behavior. It may prove more profitable to develop smaller market segments into a target segment.
Undifferentiated Marketing
Some businesses treat the market as a whole, focusing on what is common to the needs of customers, rather than on what is different. Often called undifferentiated marketing, this technique relies on mass advertising and is implemented on the basis of cost savings to the business. Undifferentiated marketing is successful when the competition is scarce or the product has mass appeal.
Differentiated Marketing
Differentiated marketing builds greater loyalty and repeat purchasing by considering customer needs and wants. Differentiated marketing creates more total sales with a concentrated marketing effort in selected areas. Concentrated or target marketing gains market position with specialized market segments. Target marketing of products or services reduces the cost of production, distribution, and promotion.