Differentiated marketing strategy

Differentiated marketing strategy
See also
Brand value chain Market based price Product strategy AIDA model Goals of marketing Social media optimization Marketing Criteria of market strategy evaluation Stage-Gate process

Differentiated marketing strategy - a strategy aimed at implementation of specific marketing tasks by company. It concerns, among other things, the production and sale of products but also generating profit through development and achieving a good position on the market. Each company has its own specific goals and concrete plan of action, but it always seeks to the most important goal - to maximize profits. The company may encounter various problems so it is important to make a good decision and stick to assumed plan.

Strategic options of the Ansoff matrix

Harry Ansoff has developed four strategies:

• Market penetration (concept related to the increase in sales of a specific product that is already available on the market)
• Market development (it aims to offer current products in new market sectors)
• Product development (it based on offering new products on the already operated market)
• Diversification (it aims to introducing a new product to the new market sector. There are two diversifications: vertical when the seller begins to produce his products or when the seller opens another sales point or horizontal when the manufacturer begins to produce a different product than the previous product)

Marketing mix

The company could not exist without a marketing strategy. Marketing is a process of planning, creating and delivering products to meet the needs of customers. Marketing mix is a very popular 4P concept (product, price, place, promotion) and its extension to additional elements (people, physical evidence, process, pleasure).

• Product (this concept is related not only to a specific product but also to the assortment, brand , quality, service or packaging. It must be focused on satisfying the needs of customers. The product's life cycle is also important- its appearance on the market, development, maturity and finally drop in which may cause the recall of the product from the market, therefore its price is very important)
  
• Price (this concept is related to pricing policy, payment method, discounts and rebates. Creating a price by large companies will be different than by small companies. Large companies that have been in the market for a long time will create a price that will be affected by the quality and exclusiveness of the product. However, small companies will lower the price to attract as many customers, gain a good position in the market and be a competitor to other companies).
  
• Place (this concept is related to the area of the company's activities, distribution and logistics. The main goal is to reach the customer with a specific product. It is important to have a good location or a prosperous online store).
  
• Promotion (a very important concept in running a company, especially for new companies. We can understand the promotion through a series of ads aimed at promoting the brand or public relations which creating a good image.
  
• People (producers, customers, staff)
  
• Process (service, provision of services, sale)
  
• Physical evidence (brand logo, building, technical equipment)
  
• Pleasure (the features of the products are not only to satisfy the needs of customers but also to give them pleasure, for example, a nice room decor, pleasant smell)
  

There is also a concept 4C (customer value, cost, convenience, communication). The concept of 4C compared to the concept of 4P is an idea seen by the customer.

• Customer value (value and attractiveness of the product for the customer)
• Cost (costs covered by the customer both financial and related to the waiting time for a given product)
• Convenience (very important concept for the customer understood through the availability of the product, the universality of information about it and polite and qualified service)
• Communication (relevant relationships with the customer, listening to his expectations)

Examples of Differentiated marketing strategy

• Packaging - Many companies use differentiated packaging to make their products stand out from competitors. For example, Coca-Cola has created numerous variations of their bottles and cans to draw attention to their brand.
• Pricing - Differentiated pricing is often used to target different customer segments. For example, a company may offer discounts for bulk orders to attract businesses, while offering lower prices for individual consumers.
• Advertising - Companies often use differentiated advertising to reach a wider audience by targeting different customer segments. For example, a company may use television commercials to reach a broad audience, while using social media and online ads to target specific demographics.
• Distribution - Companies may also use differentiated distribution strategies to reach different customer segments. For example, a company may sell their products on their website to reach online shoppers, while also selling them through brick-and-mortar stores to reach in-person shoppers.
• Customer Service - Companies can also use differentiated customer service strategies to meet the needs of different customer segments. For example, a company may offer personalized support for high-end customers, while also offering a self-service portal for lower-end customers.

Advantages of Differentiated marketing strategy

The main advantages of differentiated marketing strategy are:

• It allows to tailor the product or service to the needs and preferences of different target audiences. This way, a company can reach more customers and increase sales.
• It allows for more effective use of resources, since the same product or service is marketed differently for different groups.
• It helps to build a stronger brand identity, as customers can find something that is specific to them.
• It allows companies to compete more easily in the market, as they can create a competitive advantage.
• It helps to increase customer loyalty, as customers will be more likely to stick with a company that offers them something tailored to their needs.

Limitations of Differentiated marketing strategy

Differentiated marketing strategy has certain limitations, such as:

• Time consuming – Differentiated marketing strategy is a complex and time consuming process which usually involves a lot of research and analysis. This can be costly and time consuming, especially for smaller businesses.
• Potential for market segmentation – Differentiated marketing strategy can be difficult to implement properly, as it requires careful segmentation of the target market and accurate targeting of the right audiences.
• Risk of wrong implementation – Differentiated marketing strategy may be implemented incorrectly, which can lead to incorrect targeting of the wrong audiences and potentially decreased profits.
• Unsuitable for small companies – Small companies may find it difficult to implement a differentiated marketing strategy, as they may lack the resources and resources to conduct the necessary research and analysis.
• Increased competition – Differentiated marketing strategy can increase competition in the market, as it may put companies in a better position to compete with each other.

Other approaches related to Differentiated marketing strategy

• Market segmentation - it is a process of dividing a market into smaller parts (segments) that can be more easily targeted. It involves analyzing customer needs, wants and demographic data, to better understand the target market.
• Product differentiation - it is a strategy that focuses on creating a unique product offering that is perceived by customers to be different from competitor's products. It is based on identifying and exploiting opportunities that competitors do not offer.
• Pricing strategy - it is the method of setting a price for a product or service, and may include discounts and special offers. It takes into account the cost of production and the desired profit margin, as well as the competition.
• Promotion - it is an integral part of any marketing strategy, and involves activities such as advertising, public relations, sales promotions and direct marketing.

Differentiated marketing strategy is a powerful tool to maximize profits, increase market share and gain competitive advantage. It includes market segmentation, product differentiation, pricing strategy and promotion. All of these elements are important for creating a successful marketing strategy and should be taken into account when developing a differentiated marketing campaign.

References

• Boonghee Y., Naveen D., Sungho L. (2000). An Examination of Selected Marketing Mix Elements and Brand Equity, "Journal of the Academy of Marketing Science", vol. 28
• Kim J. H., Hyun Y. J. (2011). A model to investigate the influence of marketing-mix efforts and corporate image on brand equity in the IT software sector, "Industrial Marketing Management", vol. 40, p. 424-438
• Prasad A. N., Kalyan R., Russell S. W. (2005). Planning Marketing-Mix Strategies in the Presence of Interaction Effects, "Marketing Science", vol. 24, no. 1
• Ravald A. (1996). The value concept and relationship marketing, " European Journal of Marketing ", vol. 30
• Tsatsoula E. (2018). Application of Ansoff's Matrix-Methodology: Marketing Growth Strategies For Products, "Master Of Science in Strategic Product Design"
• Wind Y., Robertson T. S. (1983). Marketing Strategy: New Directions for Theory and Research , "Journal of Marketing", vol. 47, no. 2, p. 12-25

Footnotes

Author: Justyna Chłopek