Differentiation
Points discussed are as following:-
Strategies for Reaching Target Markets
Marketers have outlined four basic strategies to satisfy target markets: undifferentiated marketing or mass marketing, differentiated marketing, concentrated marketing, and micromarketing.
We will see Mass marketing and Target marketing with examples here:-
1)Mass Marketing:-Its nothing but MPDP ie mass production,mass distribution and mass promotion.The seller engages in mass production,distribution and promotion of one product for all buyers. Mass marketing is a market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. It is type of marketing (or attempting to sell through persuasion) of a product to a wide audience. The idea is to broadcast a message that will reach the largest number of people possible. Traditionally mass marketing has focused on radio, television and newspapers as the medium used to reach this broad audience. By reaching the largest audience possible exposure to the product is maximized. In theory this would directly correlate with a larger number of sales or buy in to the product. As the name says its mass so your trying to get your as many as you can.
The opposite to Niche marketing as it focuses on high sales and low prices. It aims to provide products and services that will appeal to the whole market.
Background
Mass marketing or undifferentiated marketing has its origins in the 1920s with the inception of mass radio use. This gave corporations an opportunity to appeal to a wide variety of potential customers. Due to this, variety marketing had to be changed in order to persuade a wide audience with different needs into buying the same thing. It has developed over the years into a worldwide multi-billion dollar industry. Although sagging in the Great Depression it regained popularity and continued to expand through the 40s and 50s. It slowed during the anti-capitalist movements of the 60's and 70's before coming back stronger than before in the 80's, 90's and today. These trends are due to corresponding upswings in mass media, the parent of mass marketing. For most of the twentieth century, major consumer-products companies held fast to mass marketing- mass producing, mass distributing and mass promoting about the same product in about the same way to all consumers. Mass marketing creates the largest potential market, which leads to lowered costs.
Examples:-
For example, products advertised during national television programs reach consumers in entire countries. As long as these products are available countrywide, advertising to such a huge demographic is considered successful marketing strategy. Consumers seeing products advertised on television commercials are more likely to choose them over similar store products that weren't promoted. Showing television viewers the actual product and communicating benefits such as getting sparkling white teeth by using Brand X toothpaste has been shown to increase sales of advertised products. As the commercials are repeated, the repetition through broadcasting helps to create brand recognition.In mass marketing, products that many people want or need such as soda, toothpaste, bread and household cleaners are advertised to a large audience.
-Henry Ford offered the Model-T Ford in one color ie Black.
-Coca Cola sold only one kind of coke in a 6.5-ounce bottle.
What’s the difference between mass marketing and target marketing?
Mass marketing aims to reach as many people as possible: quantity. Tend to be products
that everyone buys. Example: Coca-Cola. Burger King. K-mart. Broadcast networks(ABC, CBS).
Target marketing aims to reach a specific, “high quality” audience.Eg:World Wrestling Entertainment’s (WWE) target market is young males. Monday Night RAW® is the number one entertainment program on primetime cable among male viewers (2 million+) including the male demographics of 18-34, 18-49 and 25-54. It is shown at 9:00 PM ET to reach its target market.
The Big Question: Is Mass Marketing Dead or Alive???
Inspite of the fact that it creates largest potential market,which leads to lowest costs incurred in mass mktg which can ultimately lead to lower prices or higher margins,its still under argument.However,many critics point to the increasing splintering of the mkt,and proliferation of advertising media and distribn channels,which are making it difficult and increasingly expensive to reach a mass audience.Some claim that mass mktg is dying and most companies are turning to micromarketing at one of the 4 levels ie segments,niches,local areas and individuals.
Also creating mass marketing platforms in today's fragmenting media world is perhaps more important for certain business categories that need to influence millions of customers daily (e.g., beer, fast food, soft drinks, politicians) than trying to assemble slivers of audience in the even more fragmented web world. After all, there are not many Super Bowl, Academy Award or Olympic level broadly based media vehicles left. And there still is no more powerful marketing communications medium than television.
2)Cluttered markets(Future of Branding approach):-What was Marketing all about and why it failed along the way and gave away to now present day branding where CMO’s and Brand Managers integrated personality into the brand which essentially gives a chance to talk about Future of Branding in a cluttered market where brands can be given a human-face which consumers can associate to and in the process of association be a brand evangelist.
Marketing campaigns/promotions over the years have changed leaps & bounds. Marketing, slowly but steadily is embodying a new shape, a new trend perhaps. It’s becoming more human IMHO(in my humble opinion). By human, it means that marketing is getting intertwined more & more into human life.
The shape of marketing programs are distinctly changing from what it used to be, what is it now and where it’s going in the future. Previously, it used to be only about features, quality, attributes, usability and everything related to brand as a standalone entity. Now things have changed or more so, it is changing rapidly.
Now CMO’s and Brand managers across the world are talking about new age branding. They are putting personality back into the brand. Though some may even argue that branding is dead; but is it so? Putting India into perspective where we have got millions of customers for thousands of brands just to satisfy unique category of products; so here “Branding is Dead” would just be a misnomer(an interpretation that is known to be untrue). More so because of the readiness of the competitors to imitate even the core attributes of any brand which makes it all the more important to pursue the branding activities just to buy that customers mindshare.
What I assume is that the future of brands is to more human i.e. brands reflecting emotions. Emotions because that is what human beings are made of.
Quote-Unquote: Saying goes that human beings are mere manifestation of rationality & logic whereas the truth is that we all are emotional, sensitive and perceptive beings; E.g. we still love kids even though they infuriate us with their klutzy acts.
So, personalities change with time, what doesnt change is emotions, sensations & passion. That’s what we all are made of. So brands along with time need to reflect that. Its not that all brands need to change right away but certainly they have to because once there are too many brands in the marketplace & less time for customers to choose, they may ignore. And ignoring means all the millions & millions spend on brand building goes to waste. So personality incorporated brand can be the stepping stone to make brands more human which walks, talks and listens to your customer. The best example is Apple & Google.
Product differentiation is often necessary in competitive markets where customers have a hard time differentiating between products. For example, product differentiation might be necessary when a new laundry detergent is advertised: Since so many brands of detergent already exist, an aggressive advertising campaign would be required. Without this aggressive advertising, customers would not be aware of the product's availability and how it differs from other products on the market. The advertising budget is higher in order to pay for the additional advertising.Differentiation is quite difficult in a cluttered mkt.Its not only the brand equity that matters, other crucial factors prevail and must be emphasized too.
Eg:Examples abound of companies that spend millions of dollars on advertising in order to be key players in their respective industries (e.g., Coca Cola and General Motors).
-Sony( make.believe,Intel,Apple:They still have a brand, and they can do wonders with it.
3)Mktg Mix by E.Gerome McCarthy:-4 p's(product,price,promotion and place) are very imp in differentiating a product(Mfg sector) alongwith the 3 p's(people,process,physical evidence)applied in Service sector.
-Pricing and product aspect eg:-Sony in TV,Nokia in Cellphones.
4)Efficacy of mktg mix in differentiating a product:
When mkt share dips down suddenly,it has a drastic effect.Nokia brand-whether ppl are having a dent or head on.Promotional offers by Bigbazaar,pricing done by Sony.
5)Conditioning learning:-As a marketer,the brands condition the potential customers to a stimulus.
eg:Kishore Biyani(Head of FutureGroup) believed that everyone tried to condition people on festivals and occasions but not on national holidays like Independence day & Republic day,he has differentiated on efficacy of mktg mix by introducing unique offers on these days too.
Place aspect-Shopping mall at Ahmedabad,Shoppers Stop-by looking out for profitable location.McDonalds on National Highways.Cafe Coffee day in remote areas.
Next Session: Crafting Brand Positioning(taking into account Attributes,Brand and Space).
