Definition, importance, and examples
Differentiated marketing is a type of marketing strategy that uses campaigns that appeal to different audience segments. By focusing on certain characteristics of different demographics, such as age, gender, location, or interests, a differentiated marketing plan can reach customers, develop relationships, increase brand awareness, and encourage sales.
Differentiated marketing, or segmented marketing, is an approach to marketing that appeals to a niche market or different types of customers. A strategy of differentiated marketing would create different marketing campaigns to optimize brand awareness for the various customer bases of your target audience.
Undifferentiated marketing, or mass marketing, is a type of marketing that creates a unified marketing campaign that targets multiple segments of the market. It is a common strategy by brands that have more universal appeal and want to embark on a more cost-effective campaign with unified messaging.
Differentiated marketing is important because it allows brands to reach out to disparate audiences with tailored messages. With a deliberate brand strategy, companies can connect with customers by focusing on their specific needs via carefully selected channels, as well as improve metrics such as objectives and key results.
Undifferentiated marketing is important because it appeals to a wide range of shoppers. Since it has one main message, it can benefit budget-conscious brands by reaching many consumers at once.
Brands should use differentiated marketing when they want to tap into the varying characteristics among their audience, such as age, gender, interests, or geographic distinctions. More specific marketing approaches that tailor to certain groups could help generate more interest, including on different channels such as social media and digital marketing, billboards, TV ads, and so on.
On the other hand, undifferentiated marketing can be more useful for brands that may be strapped for resources or haven’t seen results with a segmented strategy. It could also be more appropriate for brands that are household names with more widespread appeal.
Advantages of differentiated marketing include the opportunity to address different needs of various customer bases more closely, by using differentiated market segmentation to provide specified options for each niche market.
Disadvantages of differentiated marketing may include increased costs to advertise to different audience segments, more time and resources to prepare separate strategies and analyze market research, and a potential loss of customers in untargeted segments.
There are many types of differentiated marketing that can reach different target audiences. See how your brand could connect with all types of shoppers based on market research.
Brands that want to distinguish their offerings from other brands could engage in product differentiation. For example, if there is a popular sneaker on the market, a different brand could manufacture a similar item but highlight something unique, like a more sustainable material or an exclusive partnership with a spokesperson to optimize product promotion.
Companies could offer different types of services with personalization for different guests in their marketing approach. For instance, February could be an ideal time to promote holiday marketing deals for couples at different price points, such as suite upgrades or complimentary champagne for Valentine’s Day. In the springtime, to align with spring break for college students, a hotel could advertise packages for groups of friends that include unlimited drinks or buffet meals.
Based on the wants and needs of different market segments, companies should think carefully about distribution methods for each group. To deliver an actual product or service to customers, companies can work with different types of distributors for specific subsets of consumers. For instance, shoppers who live in busy urban areas might prefer to pick up an item at a physical store that is located in a bustling commercial neighborhood near their office, whereas customers in more rural areas might rely on home delivery to receive the same product.
Brands may also want to think about which suppliers could be good channel partners. For example, a luxury clothing retailer that prides itself on exclusivity may prefer to limit their availability to high-end stores, but a more affordable brand might want to sell in as many stores as possible to reach the masses with a separate retail marketing campaign. The way that companies connect with their customers across income demographics is an example of differentiating among these disparate groups.
When considering how a brand might want to market itself, they could capitalize on differentiating themselves by their image and brand positioning. Whether it’s advertising themselves as a sustainable enterprise, highlighting their global (or community) presence, or positioning themselves as a higher-end or affordable option, companies should think of how they best want to present themselves to their market.
When grouping these different types of audiences into a strategy, a company should think about how to best customize the steps to position a brand’s products or services.
Retailers that are typically known as higher-end brands can still reach different customers. For example, if a luxury retailer usually sells their products in exclusive department stores, they can still find new-to-brand shoppers by partnering with a mass-market retailer to create a special line of products for their shoppers at a different price point.
A differentiated marketing strategy helps companies connect with distinct customer bases of their audience with an ultimate goal of increasing revenue. It will more often than not require more resources than an undifferentiated marketing strategy since differentiation requires more analysis to separating customer segments based on different characteristics, defining the unique set of needs, and determining how to best disseminate this information.
Depending on the details on this type of market segmentation, the marketing strategy will vary since different demographics have distinct needs and preferences. It might be more logical to concentrate advertising efforts with younger customers on social media, while perhaps it makes more sense to use print advertising with older shoppers.
An undifferentiated marketing strategy should focus on commonalities rather than differences. Even if the targeted customers encompass a large age group, live in different regions, earn varying salaries, or have a wide array of interests, an undifferentiated campaign speaks to them as a group with a mass-marketing message that speaks to everybody similarly.