Differentiated marketing is a strategy companies use to blanket different markets with multiple products. The most common strategy is to find a niche in several markets or demographic segments and fill the niche with corresponding products. In some cases, the product itself may contain the basic components with alterations made for each segment. Differentiating may be expensive, especially for smaller companies that have fewer resources than large organizations. Filling market niches, however, can be a highly lucrative business strategy.
Companies often spend copious dollars defining the different markets and demographic segments in an overall economy. Differentiated marketing depends on a company finding multiple market niches, many of which may be small and difficult to define at times. Once a company discovers the market niche, information on the type of product that will fill the niche is the next step. In some cases, the product choice may be quite obvious, while in other niches, consumer research is necessary to define the best product for the niche. Costs may be different for each market niche and its related product.
Other issues may also present themselves under a differentiated marketing strategy. Industry profiles may be necessary to determine the current stage of the industry’s market. For example, dying industries that have a market niche may not be profitable for an extended time period. High competition can also be a part of industry analysis. Even though a niche exists, the level of competition may be such that a large, flexible company can quickly alter operations in order to snuff out new competition, even in a niche market.
Market strategy is also a part of differentiated marketing, much like strategies are a part of any business operation. The distribution of goods into each market niche is one major component of market strategy. Retail locations for selling goods, product prices, and advertising packages can also comprise the entire differentiated marketing strategy. Again, each niche may require a different approach for accomplishing high sales and profits. For example, an upscale industry and market niche will most likely require a different approach to sell goods.
Companies that engage in large-scale differentiated market strategy techniques can quickly find themselves in dire financial straits. Offering specialized products to multiple markets is often expensive. Product flops or inappropriate price schemes can result in a swift loss of profits and precarious financial footing. Companies must be able to start differentiated marketing strategies slowly and work their way into multiple markets, ensuring success for each market at a time.