Understanding the Differentiated Targeting Strategy

How will you reach your customers? Should you use the same strategy to reach everyone? These are the questions that marketing professionals grapple with daily since there are so many types of target marketing strategies out there. Especially since not all types are right for all businesses.

The issue of whether or not to use differentiated marketing or undifferentiated marketing is a complex issue. Is using a one-size-fits-all approach the right approach? It’s important to consider the potential benefits and drawbacks that come with differentiated marketing.

What is Differentiated Marketing?

Differentiated marketing is not a one-size-fits-all solution for marketing. In some cases, undifferentiated marketing is the wiser choice. But, unlike undifferentiated marketing, differentiated marketing aims to target a very specific subset of customers.

With any business, knowing your target customer is a must. But how much should you know? How aggressively or precisely should you target your customers through advertising, social media campaigns, and the like?

The differentiated marketing approach proposes that the more information you have, the better.

With this approach, customers – or prospective customers – are grouped into sub-categories for marketing purposes.

Market Segmentation in Differentiated Marketing

These sub-categories of customers or would-be customers are called market segments. Differentiated marketing places a high emphasis on these market segments. After all, if you can classify your current – or prospective – customers into these segments, you can potentially identify their needs and wants, which can lead to increased sales.

This is a huge factor in differentiated marketing. Differentiated marketing can help increase sales and increase your customer base.

What Is a Market Segment?

A market segment is a group of customers that share similar characteristics. Think of this as an even more detailed look at your target market. A market segment is a group within a group of your target market.

This group of people might share traits that you can see – such as age or gender. Or, they may share other traits such as their income, educational status, marital status, or parental status.

There can be other traits or preferences for classifying customers. These can include a concern for sustainability, or a preference to buy organic or free-trade products. A food company might segment its market into customers who have certain taste preferences. Business-to-business marketing might split their market based on the industry or profession of their market segment.

Benefits of Differentiated Marketing

Enhancing Brand Loyalty

When businesses employ a differentiated marketing strategy, they cater to the unique needs and preferences of distinct market segments. By addressing these specific needs, companies can establish a stronger connection with their customers.

This connection often translates to enhanced brand loyalty. Customers tend to gravitate towards brands that resonate with their values and understand their requirements. Brands that do this are viewed as more authentic and trustworthy to those customers. Ultimately, that creates longer and more meaningful relationships with their audience.

Potential for Greater Profit Margins

Closely tied to the deepening brand loyalty is the possibility of enjoying higher profit margins. However, it’s crucial for businesses to approach differentiated marketing with the right intentions. The prospect of increased profits is appealing. However, businesses should prioritize understanding and meeting customer needs above merely aiming for financial gain. This genuine approach naturally elevates profitability over time.

Broadening the Customer Reach

The beauty of market segmentation lies in its precision. By meticulously analyzing the market and segmenting it, companies can tailor their marketing efforts to appeal to varied groups more effectively. Over time, these refined strategies can captivate a wider audience. All of which lead to a more diverse and expanded customer base. It’s a testament to how understanding the intricacies of one’s market can significantly drive growth.

Opportunity to Offer Diverse Product Lines

One of the remarkable aspects of a differentiated marketing approach is the opportunity it presents for brands to introduce and promote multiple products. By identifying specific market segments, companies can recognize varied needs and demands, allowing them to diversify their product range. This not only satisfies a broader range of customer needs but also fortifies the brand’s position in the market. By offering multiple products that cater to different segments, a brand can enhance its reach, relevance, and resilience in an ever-evolving market landscape.

 

Risks of Differentiated Marketing

Elevated Marketing Expenses

Adopting a differentiated marketing strategy involves crafting tailored campaigns for distinct market segments. It may be necessary to use many different advertising techniques, platforms, or messages to get the desired results. Diversifying these methods often comes with a higher price tag. Because of this, while reaching out to specific target groups can generate significant rewards, it also means incurring heightened marketing expenses.

 

The Fluidity of Consumer Desires

Success in differentiated marketing is not set in stone. This approach which hinges on catering to specific customer preferences, also means these preferences can shift over time. Trying to balance the need to evolve with the preferences of new market segments, while keeping your current customers loyal, can be a tightrope walk. Staying attuned to changing demands without alienating long-time patrons is a nuanced endeavor.

 

Navigating Negative Feedback

As brands pivot or expand their offerings, they inevitably risk alienating a portion of their customer base. For example, if your company is changing its product or approach to appeal more to families with kids, customers without kids might lament that the experience is less appealing than what they’re used to. 

 

Examples of Differentiated Marketing

Marketing by Gender

Let’s say your target market is adults between the ages of 18 – 35. You can segment the market in two and split it by gender. This equips you to create separate marketing strategies for men and women so you can analyze the needs and desires of each group and act accordingly.

Marketing by Educational Status

A local bar owner is discouraged to find that the middle of the week is slow. The owner identifies two distinct, separate market segments: college students and business professionals. Evaluating the potential spending power of each group, the owner makes a strategic decision. With the desire to increase revenue, the owner makes a change. The slowest day in the middle of the week will be designated as “college night.” 

Marketing by Preferences

A local winery wants to increase sales. It begins to segment its customer list, identifying two main distinctions: casual customers who visit at least once a year, and those who visit at least once a month. It begins drafting a plan for the Wine Club, a loyalty program designed to encourage repeat business. The Wine Club will also feature exclusive offerings that only Club members will have access to.

Conclusion

There’s a lot to consider when planning how to reach your target customer. Identifying the sub-groups within your target market is a step you can take to further analyze your target market. However, differentiated marketing isn’t always the right approach. It takes careful, thoughtful consideration to determine if this is the right approach for your product.

Also read:

Understanding Location-Based Marketing

The Niche Marketing Strategy Explained

Understanding Behavioral Marketing and Its Benefits

Find Your Way · Grow Your Business · Marketing · Sales