How To Create An Effective Differentiated Marketing Strategy

Indeed Editorial Team

Updated 20 October 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Because it informs people of a company's offerings, marketing is an essential business function. Marketers understand the importance of targeting the unique preferences and requirements of different types of customers to achieve growth and success. If pursuing a career in marketing interests you, learning about the different types can help you understand their roles in growing a business. In this article, we discuss the meaning of differentiated marketing, explain how to create this type of marketing strategy, outline its advantages, distinguish between differentiated and mass marketing and provide some examples for reference.

What Is Differentiated Marketing?

Differentiated marketing, also known as multi-segment marketing, is a marketing strategy that targets two or more markets or customer segments in a company's target audience. It allows brands to reach a larger audience, improve brand recognition, address different customer needs and generate higher revenue. Often retailers and wholesale businesses utilise this type of marketing to target customers with different buying habits, preferences and age groups.

How To Create A Differentiated Marketing Strategy

Below are the steps that you can follow to create a marketing strategy for a company's offerings:

1. Identify the target audience

The first step in implementing this type of marketing strategy is to identify the target audience of a brand. The brand could offer a range of different products and each could have a separate customer base. Determine the primary characteristics of the target audience and create user personas. Identify all the important information about the audience that can help you segment it further such as gender, age, location, income levels and employment.

Related: What Is A Target Market? (Definition, Importance And Tips)

2. Understand what the audience wants

The next step is to determine what the audience wants so that you can cater to its needs through your marketing campaigns. You can do this by circulating survey forms among your probable customers, studying secondary sources of data or conducting face-to-face interviews with the target audience and collecting all the information that you want. Depending on the type of information you want to collect, you can also use different analytics tools to understand the target audience's preferences and purchase behaviour. This information can help you segment customers into homogenous groups for targeting.

Related: Audience Segmentation: Definition And Comprehensive Guide

3. Create different offers for each customer segment

Once you know the preferences of the target audience, the next step is to create offers for each of the segments. Brainstorm about what your smaller segments may like and use a differentiated strategy to target them. For example, some of the customers of a brand that sells pens may be shopping for vintage pens while others could be searching for pens in bulk quantities for everyday use. Understanding these preferences is important for crafting messages that effectively address various interests. To ensure the success of your advertising campaign, remember any relevant components of your marketing strategy during this stage.

Related: What Are Market Niches? (With Benefits And 10 Examples)

4. Identify the channels that you can use for promotion

After you have decided on your marketing message and strategy, the next step is to determine how you can reach the target audience. Think about what media the target audience spends the most time interacting with and design your strategy accordingly. They could use social media platforms, watch television or read different forms of print. For example, you can create social media campaigns or advertisements, run television commercials in between shows or publish adverts in newspapers and magazines.

Related: What Are The Elements Of The Marketing Mix? (With 7Ps)

Difference Between Differentiated And Undifferentiated Marketing

The differentiated approach to marketing allows brands to target diverse customer segments with their products. Based on the brand's offerings and the preferences of its customers, it can create different messages for each of the sectors. For example, a shoe retailer sells shoes for men, women, and different age groups. By using this type of marketing strategy, the shoe retailer can target customers across all age groups and genders with specific messages and campaigns.

Undifferentiated or mass marketing is a strategy where brands target all their customers with a single message. This strategy focuses on the common characteristics of different customers rather than their differences. Brands most commonly launch mass marketing campaigns through paper, radio and television advertisements. A common example is adverts by chocolate companies addressing customers with different traits who consume chocolate.

Related: 12 Advertisement Types (With Their Uses And Benefits)

Advantages Of Multi-Segmented Marketing

The following are some advantages of this type of marketing:

Expands customer reach

When a brand aims to sell only one product or service to its customers, it may purposefully limit the number of buyers in its target market. The customer base of these businesses narrows as the companies' offerings become niche specific. This type of marketing allows brands to address the needs of various types of customers with similar products. In any market, it can help brands reach a wider audience with a variety of offerings and messages and provide them with an opportunity to gain a larger market share.

Improves profits

By offering products to different types of customers, businesses can expand their target market size and build a larger customer base that wants to buy their products. This helps businesses improve their revenue generation and increase their profits. While businesses can target a wide range of customer segments, they can also work to reach customers in different geographies to aid expansion efforts.

Helps improve adaptability

Widening their range of product offerings can enable businesses to adapt to a changing market and evolving customer preferences. Even if the requirements of a particular consumer segment change, brands can adjust to the changes by focusing on the other segments. A multi-segmented marketing strategy ensures that businesses can continue expanding, generating revenue and making profits with the full range of offerings.

Offers competitive advantage

Creating options for customers from different segments offers brands a competitive advantage as they are able to offer a larger variety to their customers. It differentiates brands from companies that sell only one product or service. Organisations can generate revenue from multiple offerings while developing their adaptability. When brands address several needs and have a wider reach, customers may start considering the brand whenever they have other needs or desires.

Related: What Is Competitive Strategy? Definition, Types And Examples

Examples Of This Marketing Type

The following are some examples that can help you gain a better understanding of multi-segmented marketing:

Example 1

A shoe company produces shoes from recycled plastic water bottles, paper and jeans. They produce different types of shoes like all-day-wear shoes, sandals and running shoes. While they target customers who are conscious about saving the environment, they also try to appeal to clientele who like to wear fashionable shoes for different purposes.

Example 2

A health food supplements brand sells dietary supplements, healthy bars, vitamins and condition-specific combinations of supplements. They have an online store and they also operate from a physical location. Here, they are able to use the multi-segmented type of marketing to target customers who have different dietary requirements. They can also reach customers who have different buying preferences such as online and in-store.

Example 3

An automotive manufacturing company produces different types of vehicles. They make passenger transport cars, pick-up trucks, tractors and minivans. Their wide range of vehicles makes it possible for them to address the needs of different types of customers. Through this method of marketing, they can create effective messages and strategies that help them reach different customer segments at the same time.

Example 4

A pet food manufacturer sells food for cats, dogs, fish and birds. This allows them to target different types of pet owners and lovers. It also helps them reach people like animal advocates who may not be pet owners but like ensuring that animals have food. By using this differentiated approach to marketing, the shop owner can target a wider audience of cat, dog, fish and bird owners or allies. This also helps them grow their business and generate revenue.

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