6 Types of Marketing – Explained! (2024)

1. Marketing Segment and Marketing Mix:

There is close alliance between market segments and marketing mix. There are two possibilities of relationship between marketing-mix and marketing segmentation. In the first possibility, the direction is from market segmentation to marketing-mix.

Here, the company assumes certain things about a segment and then prepares a marketing-mix based on these assumptions. For instance, it is safe for stereo manufacturers to assume that the young singles segment of the music market will need the latest in Hi-Fi equipment and will be willing to pay for it.

In case of second possibility, the direction is from marketing-mix to the market segmentation to revised mix. It implies that the company already has the product in hand and that the market is crowded with similar items. The company studies the market to see if there is any correlation between certain buyers and certain brands of products, instead of taking a blind plunge in the fray.

For instance, if the company finds that college students wear mainly one brand of baggy pants, it has then a better idea of how to plan an effective marketing strategy. The company revises the product several times to meet the needs of new target market.

2. Target Marketing:

Market segmentation is the process of matching the needs of consumers with company suffering by grouping into relatively hom*ogenous groups. Segmentation is the stepping stone to the market targeting or target marketing. It enables the marketing manager to target his market that selecting among the segments market parts bases on some definite criteria market targeting is the process of deciding and preparing the marketing program for market or markets.

Segment profiling is a major and constructive step in this direction of market targeting. For understanding the size of segment, growth potential, segment’s structural attractiveness, company objectives and resource. In fact, size and growth potential of a segment are more important.

However, deciding about size of segment is more difficult. It may so happen that small segments may not be of much interest but small companies may prefer small segments. The size and the amount of sales volume expected from a given segment help the company in thoroughly analyzing the segment for successful targeting.

Naturally, all companies expect an above average increase in sales and profits. That is why; they prefer segments with growth potential. It is equally true that competitors are equally tempted by increased sales and profits.

The factors that play significant role in the process of targeting are:

(1) Segment’s attractiveness which focuses its attention on profitability.

(2) Keeping competitors at bay is more important, at times and therefore profitability and profit get second place.

(3) The company objectives and its resources.

It may so happen that a particular segment may offer wide range of opportunities to the company but company may not have resources; then it should limit the selection of segmented markets. The objective of the organisation is also to decide the selection of segments. If the segments do not allow the company to realize its objectives, it has no option but to limit the targeting.

After evaluating and selecting the market segments, the company may now decides as to how cover segments selected as target market. Thus, successful segmentation leads the way for sound and effective targeting of market or markets.

Target market is one which the company serves or decides to serve. Target market implies selecting one or more market segments or consumer groups for marketing approach and deriving marketing programs and policies. Target market lends a definite orientation to marketing decisions which finally helps in positioning the products of its own.

3. Alternative Market Targeting Strategies:

Although the present day theory of market segmentation seems clear, its practical application is not that simple. A successful segmentation involves a number of steps which makes consumer motivational research mandatory.

A great deal of knowledge about the market is a must. The second step is the application of segmentation theory. It is to do with collection and analysis of data concerning each market segment. Third step is to apply the criteria of a good segmentation namely, its identification and measurement, its importance, economic accessibility, divergence in response to marketing effort and stability.

The fourth and the last step are to develop action programmes to deliver the benefits that consumers want. This involves the development of marketing programmes for both short and long run. With this back-ground, let us study the alternative strategies.

That way, every market can be segmented to some extent as the buyers are never all alike. However, a firm may or may not wish to shape its marketing policies around these differences.

To a marketer, in fact, three alternative market targeting strategies are open. That is, in planning its marketing mix for a product or a service, a company can choose either to confront the differences among the consumers or to ignore them.

If it ignores such differences, it is said to follow undifferentiated marketing in which a single marketing-mix is used for the entire market.

On the other hand, if it segments the market on the basis of consumer differences, it can choose to practice either differentiated marketing in which a different marketing-mix is used for each segment or concentrated marketing in which all or most of the marketing efforts are focused on one or a few segments.

4. Undifferentiated Marketing:

This strategy puts forth only one product and tries to draw in all the buyers with one marketing programme. The firm chooses not to recognize the different demand curves that make up the market.

Instead, it treats market as an aggregate focusing on what is common in the needs of people rather than on what is different. It is an attempt to design a product and a marketing programme that appeals to the broadest number of buyers.

It relies heavily on product differentiation to protect itself from competition, mass channels, mass advertising and universal themes. It aims to endow the product with a superior image in people’s mind whether or not this is based on any real difference. Side figure 6.3 amplifies undifferentiated marketing.

The best examples can be those of Coca-cola and cigarettes. For many years, for instance, Coca-cola meant only one thing to consumers. It was a patented soft-drink available in a single flavour and bottle size.

Its theme was “Things Go Better with Coca-cola”. Similarly, cigarettes, regardless of brands, the size has been 2.75 inches and wrapped in a white paper and packed in a same soft container with aluminium foil. The ad theme had been “The Pause that refreshes”.

Undifferentiated marketing is primarily defended on the grounds of cost economics. A narrow product-line minimizes production, inventory, administrative and selling and distribution costs.

Large-scale approach makes available discounts, research and development costs lowered, providing the largest profit in the short-run.

In spite of these plus points, an increasing number of marketers have expressed strong doubts about the optimality of this strategy. The firm practicing undifferentiated marketing, typically develops a product market programme aimed at meeting requirements of the entire market.

When several firms in the industry do this, the result is hyper competition for the largest segment and under satisfaction of the buyers of smaller areas. This strategy is more vulnerable to competition than the other targeting strategies. Sometimes, appealing to the largest market results in what is known as ‘majority fallacy’.

Such an approach may provide the largest profits in the short-run; however, in the long-run, the market opportunities for smaller segments do make undifferentiated target marketing quite vulnerable.

The finest example of this kind is that of American car manufacturers. American manufacturers produced only large cars while foreign firms capitalized on this smaller segment needing small cars. The successful company is one that cares for buyers of both large and small cars.

5. Differentiated Marketing:

Under differentiated marketing strategy, a firm decides to operate in several or all segments of the market but designs separate products and marketing programmes for each. That is, differentiated strategy involves a different marketing-m/x for each segment.

By tailoring their market offerings to many different segments, marketers hope to achieve additional sales and increased consumer identification with a brand or company name. Such firms work by long-standing rule of thumb.

If a product is successful within a certain market segment, they move over to another product altogether to a newly created segment, leaving aside that successful product. Picture 6.4 configures differentiated marketing.

The best example is that of General Motors of America that tries to produce car for every ‘purse, purpose and personality’. Similarly, the cereal companies carefully differentiate among the health conscious adults working women, fussy teenagers and sweet-toothed children while planning new cereals.

Each group has a cereal carefully designed especially for its needs, though the company name is always in the foreground in ads and packaging. So is the case with soaps and shampoos.

In India, Hindustan Lever Limited and Godrej Limited have used this effectively. Even known Tea Companies namely, Brooke Bond and Liptons have taken full advantage of this alternative.

By offering product and marketing variations, the firm hopes to attain higher sales and a deeper position within each market segment. It hopes that a deep position in several segments will strengthen the customers overall identification of the company with the wide range of product field.

It hopes for greater loyalty and repeat sales because, firm’s offerings are bent to the desires of customers than otherwise.

Good many firms have moved out of undifferentiated marketing strategy to differentiated marketing strategy. The result is multiple product offerings and channels to reach consumers. Thus, today, Coca Cola is sold in different bottle sizes as well as in cans. Cigarettes are manufactured in variety of lengths and filter types.

Chevrolet is no longer a single style low priced car but a set of cars matched distinctly to different market segments varying in cost-size and features. This greater willingness to customaries their products results in net increased total sales. At the same time, marketing and production costs increase.

Thus, product modification costs, production costs, administration costs, inventory costs, promotion costs multiply. In view of this double sided effect, nothing can be said about its optimality. It is definitely sales oriented.

6. Concentrated Marketing:

Both differentiated and undifferentiated marketing alternatives to segmentation strategies imply that the firm goes in for the whole market. However, good many firms see a third alternative namely concentrated marketing. This alternative becomes a must when the firm’s resources are limited.

Instead of going after a small share of a large market, the firm goes after a large share of one or two or a few sub-markets. Rather than pursuing the entire market or most of its segments-as is the case with the other two alternatives-the concentrated marketing focuses on only one or a few segments.

Put in another way, instead of spreading itself thin in many parts of the market, it concentrates its forces to gain good market position in a few areas. The Figure 6.5 demonstrates concentrated marketing.

The world class examples are that the Rolls Royce Automobile Company of United Kingdom has appealed only to the wealthiest highest socially positioned automobile buyers. On the other hand, Volkswagen Company of West Germany has not attempted to trade outside the low price range. This practice is more popular with publishers of textbooks.

Thus, some specialize at primary level-some at high school level and others at college and university levels. Further, specialisation is also possible. For instance, Richard. D. Irwin Incorporation has specialized in Economics and Business titles while John Wiley and Sons in Mathematics and Statistics.

The major advantage of concentrated marketing is that the organisation can become a specialist in the needs of its selected market segment. This firm achieves a strong market position in a particular segment or segments it serves, owing to its greater deeper knowledge of the segment’s needs and special reputation it acquires.

Further, it enjoys many operating economies because of specialisation in production, distribution and promotion. This enables savings in costs through large runs of a small number of products; at the same time, it has positive impact on advertising and distribution.

The firm can earn high rates of return on its investments provided the segment chosen is right. It is worth noting about the dangers of concentrated marketing. It involves tagging the company’s future growth to one segment of the market and it means obvious risks.

Putting all the eggs in a single basket restricts the growth opportunities and makes vulnerable particularly to a successful competitive attack or if there is a sudden dipping down and thus reducing its market share. Further, a firm that concentrates too much forgets or neglects other segments that are otherwise profitable.