Concentrated marketing is a strategy that involves a brand directing all effort and resources to develop and market a product for one specific segment of the target audience. This strategy is especially effective for small businesses as it helps obtain a good position in one marketing segment.
Advantages and Disadvantages of Concentrated Marketing
Concentrated marketing, the main purpose of which is to create an offer for one specific segment, comes with several benefits for small companies. The strategy allows small businesses and startups to function even with limited resources. Some other advantages of concentrated marketing include:
- the opportunity to analyze and understand the needs and wants of a select audience segment;
- a company can become a professional in meeting the needs of a certain segment of customers;
- cost-effectiveness due to the absence of mass production and mass advertising;
- more loyal customers if their needs are met.
However, the strategy also has disadvantages. They are as follows:
- high dependence on customers’ preferences, a shift might result in decreased effectiveness for your marketing campaigns;
- risk of neglecting other profitable segments;
- risk of brand failure in the event of decreased product demand.
Now that you know the advantages and disadvantages of concentrated marketing let’s compare this strategy with another one — differentiated marketing.
Differentiated vs Concentrated Marketing
The major strategies include differentiated, undifferentiated, and concentrated marketing. Next, we’ll take a closer look at differentiated and concentrated marketing to explore each of them and find the distinctive features.
By using differentiated marketing, companies can appeal to two or more segments of their target audience or marketing segments through their campaigns. Brands target various well-defined customer profiles to create a wider customer base, increase brand awareness, communicate personalized messages, and meet customers’ needs.
After creating special approaches for different segments of the target audience, company messaging is more likely to resonate with the unique needs of clients and you can expect even more benefits including higher customer loyalty, better business-customer relationships, and even more.
Like any marketing method, this strategy has pros and cons. The benefits of differentiated marketing include fulfilling customers’ needs, increased customer reach, and more revenue. However, the strategy also has its cons. They are as follows: unstable brand identity and high expenses.
Unlike differentiated marketing, concentrated marketing is presented as a single marketing campaign, single message, and a single product for one specific target segment. This strategy is the best fits startups and small firms as it enables them to find their ideal lead or niche. Also, a concentrated marketing strategy doesn’t require you as a business owner to spend a lot of money. Plus, by focusing on the needs of a very narrow group of customers, you’ll be able to build authority and become an expert in your niche.
Concentrated marketing can be the starting point for your subsequent marketing strategies that focus on a wider target audience. The downside to this strategy is that it only works with one small segment. Hence, businesses might find themselves in a trap when it’s time to grow. This happens because companies typically stick to one unique value proposition and brand voice.
Now you know that the major difference between the two strategies mentioned above is the number of segments they target. So let’s move to the main features of concentrated marketing.
Features of Concentrated Marketing
Concentrated marketing has features that help you understand the business models it best suits. A concentrated marketing strategy:
- can be implemented by small companies;
- helps companies focus, meet the needs and produce goods specifically for one audience segment;
- involves the efficient use of resources for production, distribution, and advertising;
- requires a company-expert in the market that knows the core product necessary to get into the niche market;
- can’t acquire a larger customer base.
We’ve reviewed the features of concentrated marketing, so now let’s proceed to the examples. They’ll show you the successful implementation of this strategy by several world-known brands.
Examples of Concentrated Marketing
In concentrated marketing, brands usually select one audience segment and try to meet the needs of customers. Let’s review some examples from famous manufacturers to see how it works.
The luxurious car manufacturer was established in 1904 in Britain, Rolls-Royce knows a thing or two about concentrated marketing. The brand has customers in more than 120 countries and is well-known for the quality and price of its cars. Rolls-Royce targets customers with liquid assets of at least $30 million. This car manufacturer reaches their clients using personally signed letters. The brand sells approximately 800 cars per year.
The brand founded in 1905 is now considered one of the leading names in the watch manufacturing industry. Their promotional campaigns always include different famous, influential, successful athletes and artists who depict the brand’s target segment. Ads created by Rolex convey that successful, strong people with status wear Rolex watches. This shows that the watch manufacturer is targeting career-orientated people.
The infant and toddler company founded in 1991, Munchkin, specializes in manufacturing and distributing products for children. The brand creates products and chooses parents as their target audience. Additionally, the company creates articles on parenting for their blog. They target moms and dads using different strategies when they search for certain baby products and use mobile-friendly tactics to reach busy parents.
The Swiss watchmaker established in 1848 is famous for making some of the finest watches in the world. Omega is a world-known brand with a great reputation because their products have excellent quality, durability, and resistance. Their ad that features Rory McIlroy, a famous golfer, depicts the brand's ideal client — a successful, influential, and good-looking person. This personality has passion and expertise in sports or other industries. So, Omega targets customers who try to balance their family and career.
Now you know about concentrated marketing, its advantages, and disadvantages which is essential for selecting a target market strategy for your business. The examples above will inspire you and bring your ideas to life.
Last Updated: 22.03.2023
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