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What is Differentiated Marketing?

It is a market coverage strategy where a firm decides to target more than one market-segment and creates separate offers for each segmentation.

Differentiated Marketing vs. Other Target Marketing Strategies

By firms offering product and marketing variations to different market segments, the company is hoping for a strong position within each segment and higher sales. By developing a stronger market position within the various segments, the company generates more total sales than undifferentiated marketing.

The downside to this market coverage strategy is that the cost of business increases. Companies find it more expensive to develop and produce multiple units of different products than create numerous units of just one product. Additionally, the firm must create separate marketing plans for separate segments, which increases the cost of marketing research, sales analysis, forecasting, promotion planning, and channel management. Promotional costs may increase due to different advertisements required for different market segments.

Firms need to weigh the costs of doing business against their potential earnings when deploying a differentiated marketing segmentation strategy.

Other target marketing levels include undifferentiated marketing, concentrated marketing, and micromarketing.

differentiated marketing segmentation chart

Example

The Coca-Cola company has many branded beverages; a few examples include Coke, Sprite, Schweppes, Fanta, and Dasani water. 

Coca-Cola’s differentiated marketing strategy helps generate over $34Bn per year for the company. Without its differentiated approach, the company would struggle to try to sell multiple products to a mass market with different tastes. 

 

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