Concentrated marketing

Concentrated Marketing is a strategy in market segmentation when a small part of the market is chosen and a specific offer is created for that audience alone. This type of marketing is especially fitting for small and medium sized enterprises, which do not possess enough resources to grasp a wider portion of the market. Concentrated Marketing allows them to utilize those resources effectively and target them to the dedicated segment of the market. If the strategy is carried out successfully, an organization can become a sole leader in that niche.

Characteristics of Concentrated Marketing

There are many features of Concentrated Marketing, describing the strategy, its main attributes. The most significant characteristics are presented below.

• Concentrated Marketing requires an enterprise to settle on one consumer segment and target all marketing efforts to that audience. Efforts are well organised into a plan that satisfies preferences and need of the respective customers.
• The strategy of Concentrated Marketing is predominantly used in smaller sized companies. It does not require large volumes of production or promotion. Therefore, SME's usually have enough resources to adopt this approach.
• In order to succeed with Concentrated Marketing, organizations have to invest into researching the current market they are entering, as well as competing firms that already exist and the ones that could emerge. Strong and weak sides should be identified and taken into consideration when creating the offer and the marketing plan. The product/ offer needs to be far more superior to the opponent, since the targeted group of customers is smaller and homogenic.
• The first step of Concentrated Marketing is to identify that small part of market. It is usually relatively easy, since those little segments are untouched by giants in the industry, as big companies look for a large audience to maximize sales.
• Concentrated Marketing also does not involve expansion, which is inherent to many other strategies. Consequently. all financial resources can be targeted towards upgrading the product and maximizing its value for the customers.

Examples of Concentrated Marketing

There are many examples of companies employing the Concentrated Marketing strategy, some of the most prominent and well-known ones are presented below.

Rolls Royce is a company that produces luxury cars, which is famous for its exclusivity and extremely high price range. The Rolls Royce is perceived globally as a brand of highest possible value and status. In order to gain such reputation and acquire a respective position in the industry, the company used Concentrated Marketing strategy. Their target audience is very selective and includes a very narrow portion of society. Rolls Royce focuses all their advertising efforts towards that audience, with the marketing techniques catered to their preferences. Those being five stars hotels, exclusive events, high-profile parties, etc.

Rolex is a manufacturer of luxury watches. It is certainly the most recognizable brand in this industry around the globe. Concentrated Marketing strategy is how the company remains in a leadership position throughout many decades. Rolex is perceived in the minds of the consumers as an exclusivity, only available to the few in the society. The firm targets their products to a very limited portion of the market, consumers with available resources and status. Luxury events, exclusive gatherings and parties are usually the places where the company's watches are being promoted to the audience.

Advantages of Concentrated marketing

Concentrated marketing offers a range of advantages to companies looking to target a specific segment of the market. These include:

• Cost-efficiency - By targeting a smaller segment, companies can maximize their resources and minimize their marketing costs. This can enable them to create specific offers that are tailored to the targeted segment, while minimizing overall expenses.
• Reach - Concentrated marketing allows companies to focus their efforts on a particular market segment, thus increasing the likelihood of reaching their target audience.
• Brand Building - By focusing on a specific segment, companies can build a strong brand image and reputation in the industry, helping to establish a loyal customer base.
• Innovation - Concentrated marketing allows companies to experiment with new ideas and products, as they have an opportunity to test out their offerings on a small segment of the market. This can help them to stay ahead of the competition and provide innovative solutions to their target audience.

Limitations of Concentrated marketing

Concentrated marketing has certain limitations that organizations should consider before deploying it. These include:

• A limited potential for growth. Concentrated marketing is suitable for organizations that are not looking for quick, large-scale growth. It is more suitable for companies that are looking for steady and reliable growth, as the targeted segment of the market is usually much smaller than the overall market size.
• Restricted resources. The resources that can be allocated for concentrated marketing campaigns are more limited than in campaigns targeting a larger segment of the market.
• Increased competition. When targeting a small section of the market, the competition is much higher and the competition may be more powerful and experienced than the organization. This can make it difficult to achieve a successful outcome.
• Difficult to measure results. As the targeted audience is usually much smaller, it is more difficult to track and measure the success of the campaign, as the data set is much smaller.
• Lower customer visibility. As the targeted segment is usually quite small, it can be difficult to get the message out and gain visibility. This can affect the overall success of the campaign.

Other approaches related to Concentrated marketing

As an alternative to the Concentrated Marketing approach, there are a few other strategies that organizations can employ when it comes to market segmentation. These include:

• Niche Marketing - This approach involves focusing on a specific, narrow segment of the market. It involves developing a specific offer tailored to the needs of this audience, and using targeted marketing to reach out to them.
• Undifferentiated Marketing - Also known as mass marketing, this involves developing a single offer and targeting it to the entire market. This approach can be useful for organizations with a large budget that want to reach out to a large audience.
• Differentiated Marketing - This approach involves creating different offers tailored to different segments of the market. This can be useful for organizations that want to reach out to multiple audiences but don't have the budget to create a unique offer for each individual segment.

In summary, Concentrated Marketing is one of several approaches to market segmentation that organizations can utilize to reach out to their audiences. Depending on their resources and the size of their target audience, organizations can choose from Niche, Undifferentiated, and Differentiated Marketing strategies to reach their desired results.

Footnotes

Concentrated marketing — recommended articles

Focus strategy — Market niche strategy — Market development — Beachhead market — Competitive position — Market follower — Differentiated marketing strategy — Imitator strategy — Market maturity

References

• Ayantunji Gbadamosi, (2013), Principles of Marketing: A Value-Based Approach, Published by Macmillan International Higher Education, p. 156
• Cristina Calvo Porral, John L. Stanton, (2018), Principles of Marketing, Published by ESIC, abstract 4.5.3-4.5.4.
• Richard M.S. Wilson, (2010), Strategic Marketing Planning, Published by Routledge, p. 369-370
• Rosalind Masterson, David Pickton, (2010), Marketing: An Introduction, Published by SAGE, p. 147

Author: Daria Boiko