Undifferentiated marketing. Undifferentiated marketing to a mass consumer audience

21.09.2019

Types of Marketing

The main types of marketing are:

Undifferentiated Marketing does not provide for dividing the market into segments. The company ignores the differences between market segments and enters the market as a whole with one offer, focusing its attention and efforts on the common needs of customers that unite them, and not on what distinguishes them. This means reaching as many customers as possible.

Advantages:
- a limited range of goods ensures a low level of costs for production, inventory and transport.
- an undifferentiated program of advertising events allows you to keep their costs low.
- the lack of segmentation also determines the low level of costs for marketing research and development of new products.

Flaws:
- it is difficult to develop a product or brand that can satisfy all or at least the majority of consumers.
- When several firms focus their efforts on the largest segment of the market, the inevitable result is fierce competition.
- large segments may become less profitable as a result of price wars.

It originated in the 60s, when market segmentation became the most important attribute of marketing. Using a differentiated marketing strategy, the company focuses its activities on several market segments and develops separate offers for each of them.

Advantages:
- differentiated marketing, as a rule, gives greater turnover than undifferentiated marketing.
Flaws:
- you have to develop marketing plans, conduct market research, make forecasts, analyze turnover, development plans and advertising for each brand and market segment separately. Consequently, an increase in turnover leads to an increase in costs.

The point is to deepen the target character not at all market segments, but on one (several) of them. Instead of seeking a small share of a large market, the firm seeks a large share of one or more small markets. Particularly attractive to companies with limited resources. By resorting to concentrated marketing, firms achieve a strong market position in the segments they serve due to better knowledge of the needs of those segments.

Advantages:
- the company saves on operating costs due to the specialization of production, distribution and promotion of the product
- if the company has chosen the segment well, it will achieve a high return on invested capital

Flaws:
- concentrated marketing carries a lot of risk.
- the selected market segment may suddenly shrink.

For these reasons, many companies choose to operate in two or more markets simultaneously.

Choosing the type of marketing should be carried out taking into account the following factors:

Company resources. If a company's resources are limited, concentrated marketing is the smartest strategy.

The degree of homogeneity (homogeneity) of the product. A more suitable strategy for homogeneous products is undifferentiated marketing. Products with distinct designs, such as restaurants and hotels, are more suitable for a differentiated marketing strategy.

Phase life cycle product. When a firm introduces a new product to the market, it is wise to launch only one version of it. Most intelligent types Marketing here will be undifferentiated or concentrated marketing. In the maturity phase of the product life cycle, differentiated marketing becomes more feasible.

Homogeneity (homogeneity) of the market. If customers have the same taste, if they buy the same amount of a product, and if they respond similarly to marketing techniques, then undifferentiated marketing is appropriate.

Competitors' strategies. If competitors resort to market segmentation, undifferentiated marketing can be very dangerous. When, on the contrary, competitors use undifferentiated marketing, a firm can gain an advantage over them by using a differentiated or concentrated marketing strategy.

The company gains popularity thanks to competent marketing and following a plan for building its business. A significant role in this is played by the concept of segmentation, i.e. the choice of a specific market with a specific buyer and assortment of goods. But how to choose the right direction, by what principles and factors to determine it, and what coverage option to use?

Segmentation in marketing

Before moving on to the types of strategy and focusing on any specific type, you should look at the segmentation methods that every company should know. Although there is no single division of the market into groups, and, as a rule, for some time the company experiments and tries to interact with different categories of customers, changing the parameters.

There are several basic variables used in segmenting the consumer market:

Geographical principle which requires dividing the market into district, city, region, country and states. Everything will depend on the direction of development and start-up capital.
Demographic principle implies division of the market by gender, income level, family composition, age, etc. This is one of the most popular parameters, allowing you to divide all consumers into groups. It is also the easiest principle to measure and count, and is closely related to all the others.
Psychographic parameter- considers buyers from the point of view of belonging to social class and lifestyle.
Behavioral features are one of the most important characteristics because they help to divide buyers into their attitude towards the product, their knowledge about it and their reaction.

Defining the target market

A company should definitely know its buyer; this is why segmentation is carried out, where a portrait is drawn according to certain parameters. After this stage has been passed, the choice of undifferentiated, differentiated or concentrated marketing strategy begins.

The bottom line is that the firm needs to decide what share to cover, choosing from three options:

Undifferentiated Marketing- the choice of a company when it determines that it does not need to differentiate its activities and will offer its product to everyone.
Differentiated Marketing- a company chooses this option when it decides to act in several segments and understands that it cannot satisfy all consumers with one product, and more often it happens that the buyer himself does not want to purchase a product like everyone else due to his status. Very a shining example are cars with different price categories. In addition, this type of market coverage helps people remember it, which means they will come to this company again for the second and next product.
If the company is not suitable for differentiated and undifferentiated mass marketing, then the third option remains - concentrated. This strategy, for example, is suitable for a company with limited capital, which is developing in one direction and thereby ensures itself a strong position in this market. Another option is when a company directs all development to creating goods for rich people, such as the Aston Martin company.

The concept of undifferentiated marketing

This article will examine in more detail the first option of market coverage, when the company does not focus on the differences between clients from each other, but looks for something common among them.

There are several definitions of this concept:

This is a strategy that ignores differences and uses mass distribution systems and massive advertising campaigns.
This is the direction when they come to the market with one offer.
This is the development and creation of a product that will meet the needs of the majority of buyers.

Advantages

Undifferentiated marketing with customer centricity implies that the company with this option will receive much more profit and satisfy more customers than segment its potential customers.

Besides this direction has its advantages:

The range of products is very small, so production costs are not high.
From the first point it follows that if little is spent on production, then the product will be cheap.
Ability to cover wide market boundaries.
The product is intended for the masses, which means that marketing, advertising and research costs will be low.
Due to the low price of the product, there is greater freedom of action than competitors who segment their activities.

Flaws

Every strategy in any area of business has both pros and cons so that a company can understand what it needs to be prepared for. Undifferentiated marketing has the following disadvantages:

The costs of creating the product are small, which results in a low price. But if there is an increase in the cost of raw materials, electricity and wages, this may lead to a narrowing of the price gap with competitors.
It is not so easy to create a unique product that can satisfy every customer and maintain the bar for a unique product.
There is fierce competition in this segment because many firms want to cover a large segment of the market.

Influencing factors

Having decided on a market coverage strategy, such as undifferentiated marketing, you should definitely take into account the factors that influence the promotion of the product:

The company's resource must be large enough, since this is a consumer product, which means production will be in large quantities.

Choosing different competitors' strategies. Here, a company that has chosen undifferentiated marketing cannot compete with other manufacturers that produce the same product but have chosen segmentation.
The product must be homogeneous and suitable for each consumer, for example, wood or other building material.
This option is best suited when only the first stage of the product life cycle begins and the company produces only one product.

Terms of use of the strategy

Whatever strategy the company chooses, there will always be positive aspects, and negative. You should definitely set priorities and understand that this direction will be relevant (undifferentiated marketing) if:

the product on the market is unique, unlike others and will be in demand;
if the product is new and will be of interest to the consumer;
if competitors use the same strategy.

Examples of undifferentiated marketing

Large companies most often try to select and divide their consumers into segments in order to satisfy their needs to the maximum. But there are also companies that are looking for common features. The most striking example is Coca-Cola, which at an early stage of development created one drink, bottled it in one size and sold it to everyone without exception.

An interesting example is the Japanese company Fukubukoro, which produces sealed boxes with different goods. Although consumers do not know what they are buying, this does not make their desire any less. The essence of such a “magic chest” is that if the buyer purchases all the goods separately, it will cost him much more.

This idea has now been picked up by cosmetic companies and their representatives, such as Glamor, which sends out beauty boxes to its clients every month, containing various care products and decorative cosmetics.

Another example where undifferentiated marketing is used is the situation with the development of microbreweries in the United States, which in the main market could not compete with such giants as Miller or Budweiser. These companies spent a lot cash on advertising, which allowed them to become popular. Then small breweries began to “take over” certain territories and districts of the city, and this allowed them to develop successfully.

Conclusions

Before a company decides which market coverage option to choose and whether to opt for undifferentiated marketing, it should be understood that the product must be heterogeneous and original. That this option is suitable if there is a new release of a product that every consumer will appreciate.

This strategy is good for its cost-effectiveness not only in the field of marketing. This reduces transportation costs, reduces the advertising budget, less various equipment is needed, etc. However, powerful competition may arise, which not every company can cope with.

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Problem solving

Before using any one type of strategy, a company must solve the following problems before entering the market:

If it is assumed that the company's products will become attractive to the majority of consumers, then the optimal solution would be to use the undifferentiated marketing technique.

The company ignores the differences in segments and enters the entire market as a whole offering one product.

Therefore, both the product and marketing program should be of interest to most consumers. In the early stages of their existence, the strategy of undifferentiated marketing was used by such famous companies as Ford, British Airways and Coca-Cola.

Economic aspects

Choosing this type marketing, the company assumes that identical products will differ from its own products mainly in cost. Marketing will be aimed at ensuring that the product is fixed in people’s minds as the best in comparison with other types of products.

The company's strategy in this case will be aimed at reducing all possible costs: advertising, sales, production and service.

Due to the small range of goods produced, the cost of their production is significantly reduced. Also, inventory storage and transportation become relatively small. There is no need to research and analyze market segments separately, and costs for production management and marketing activities are also reduced.

Under such market conditions, it will be relatively easy to beat competitors with similar products.

Advantages and Disadvantages

Undifferentiated marketing is chosen by a company that finds it difficult to identify the target segment of consumers in the market based on formal criteria, or the segments can transform over time. For example, in an area such as Fashion, preferences change extremely quickly, so the use of undifferentiated marketing is necessary.

Advantages of this type of marketing:

low level of production costs due to mass production;
practically unlimited boundaries of the potential market;
marketing activities require minimal costs;
easy entry to the market;
When similar products appear, low costs at all stages of the business process create advantages over competitors.

Disadvantages of undifferentiated marketing:

if a new product has flaws, its value can be significantly reduced;
cost reduction methods can be copied by competitors;
the company's attention is constantly focused on reducing costs, which often makes it difficult to respond in a timely manner to changes in market conditions;
Unforeseen increases in costs, for example for electricity or raw materials, may lead to a decrease in competitive advantages goods at the cost level;
developing new products that could presumably be in demand among consumers is difficult.

Examples

A textbook example is marketing activities of Coca-Cola. The company is present on the market as a single product in the expectation that among huge amount consumers, there are quite a lot of buyers who are ready to purchase their product without effort on their part. Although during many years sales of goods may vary appearance, aroma and other things.

Japanese magic chest fukubukoro is a sealed box containing a wide variety of products. Buyers purchase a chest based on the recommendations of sellers, since everything inside separately costs much more. Thus, people buy a box cheaply, but what is in it is unknown.

General Motors cars. The manufacturers of these cars claim that they produce equipment for any person, any wallet and any purpose. Indeed, the company counts on everything age categories, and this calculation is justified. In addition, the corporation places bets on repeat purchases of its cars, which is also justified in practice.

Hardware and software from IBM. The company's variety of products is aimed at a variety of market segments. IBM technologies are known all over the world and are widely in demand.

Farm Journal. Has a global audience, releasing 1134 various options their issues, which scrupulously take into account the needs of readers. Thus, magazines are published not only in a highly specialized manner (for cotton farmers, for pig farmers, for dairy cattle breeders, etc.), but the publication options take into account all 26 regions of the United States.

Selecting a strategy type

When choosing a market strategy, an enterprise needs to consider the following factors:

company resources;
level of product variety;
marketing strategies chosen by competitors.

If a company has limited resources and buyers in a given market have similar tastes and respond to incentives in the same way, then it is more rational to choose a strategy of an undifferentiated type.

If products are differentiated in design, the market is clearly segmented, and competitors employ a differentiated or concentrated type of strategy, undifferentiated marketing can be disastrous for the enterprise.

Do not forget that the total strategy of undifferentiated marketing, that is, full market coverage, is available exclusively to large companies.

Practical assignment on marketing

1. Answer the questions:
1) Can students of Nizhny Novgorod universities represent market segments? Why?

They can, because can be classified according to different criteria of segmentation (geographical, demographic, psychographic, socio-economic, behavioral), on the basis of which it is possible to identify groups of students who respond similarly to marketing influences.

Explain what target segments it is aimed at and why?

Stores household appliances"El Dorado". "Eldorado - territory low prices" The advertisement is aimed at economical people with middle and low income levels.

Tefal pressure cooker. “Tefal - we can’t do without your ideas.” The advertisement is aimed at young housewives with high incomes who care about the quality of their products and the healthiness of their dishes.

3) What are the differences between undifferentiated, differentiated and concentrated marketing. Give examples.

Undifferentiated marketing involves offering mass products to the population (everyone), maximizing efforts on the general needs of the consumer.

For example: A laundry detergent company, using an undifferentiated marketing strategy, offers a standard laundry detergent for any wash. This strategy may be justified by cost factors. For a unit producing standard laundry detergent, it is especially important to have mass production and the resulting cost savings. For product promotion, this strategy also offers savings because... Promotion costs are not spread across different products and segments.

Differentiated marketing is used when a company works on several segments and develops an action plan for each.

In the case of washing powder, the application of such a strategy means that the company produces various types powder: for soaking, washing wool, colored laundry, etc. By selecting several different segments, the company must provide almost the entire market with the most suitable products. Obviously, in this case the turnover is much greater than in the case of undifferentiated marketing. The differentiation strategy, however, means relatively higher production costs and a more complex organization of production and management. This is mainly due to the fact that the costs of production, product development, advertising, and sales are distributed among many products. Therefore, this strategy is usually used by large companies.

Another example, the Lyubava company produces clothes for people with disabilities. different levels income. By offering a variety of products, it hopes to increase sales and penetrate deeper into each of its market segments. The company's management believes that by simplifying its position in several market segments, it will be possible to identify a company with a certain product category in the consumer's mind. In addition, the company expects to increase repeat purchases as the product meets consumer desires.

Concentrated marketing is focused on producing a product that best satisfies the requirements of specific consumers (a specific segment).

Used by organizations with limited financial resources. At the same time, the company concentrates its efforts on a certain segment (s) of the market, ensuring a long-term position in it, since it knows the needs of this segment better than others and has a corresponding reputation. Thanks to the specialization of production, distribution and measures aimed at stimulating sales, the company achieves savings in many areas of its activities.

However, concentrated marketing is associated with increased risk; you need to know the selected segment well and predict the demand for the company’s product for many years to come.

Volkswagen focused its efforts on the market for small cars, Hewlett Packard focused on the market for expensive calculators, and the publisher of this book, Richard D. Irwin, focused on the market for textbooks on economics and economics. entrepreneurial activity. Through concentrated marketing, the firm ensures a strong market position in the segments it serves because it knows the needs of those segments better than others and enjoys a certain reputation. Moreover, as a result of specialization in production, distribution and sales promotion, the firm achieves savings in many areas of its activities.

2. Complete the practical task:

Process the results and check the survey parameters according to data options (Table 1).

Table 1

Age**

Group options

1. Determine the average values of survey parameters for groups of answers:

= (Р1 + … + Рn)/n,

where P1, …, Pn are survey parameters; n - number of respondents.

average values

d = vУ(p - Їp)2/n

3. Estimate the mean square error of absolute indicators:
- ? =d/vn
- ?A =1.161
- ?B =1.162
- ?С =1.162
4. Calculate the confidence interval of values at 95% probability:

Рд = ЇP ±Н0 vn .

RdA = 8.1 ±1.96*1.161 = 8.1 ±2.3 or 5.8...10.4

RdV = 9.1 ±1.96*1.162 =9.1± 2.3 or 6.8...11.4

РдС= 9.4 ±1.96*1.162 = 9.4± 2.3 or 7.1...11.7

5. Checking the forecast.

Confidence error

(8,1 - 5,8)/1,6 = 1,4.

For the selected confidence interval (95%), an error of 1.4 is acceptable.

6. Check calculations by absolute value and percentage.

Verification steps:

calculation of average values of parameters Їp;

comparison of calculated and predicted values;

determining whether the calculated data corresponds to those predicted by the formula

Gp = (Їp- Pп)/Sp,

where Pп - predicted values of parameters in absolute value; clarification of the forecast and determination of deviations.

where Sc is the column sum; Sp is the sum of the series; So - total amount.

initial interest data;

percent by columns;

percent by row.

9. Construct parameter graphs (bar graphs, etc.) and formulate conclusions. The research results are presented in the form of a note.
6. Calculation of the frequency of expected events. Frequency of the number of young men spending less than 10 minutes on food:
8 * 26/50 = 4,16.

Similar calculations are carried out for the remaining groups.

7. Calculation of percentage data.
1) Initial percentages (Table 2)

Table 2 - Percentage by row

	Answer options

Table 3

	Answer options

Figure 1 - Initial data graph

Figure 2 - Comparison of calculation options by columns and rows