What is Concentrated Marketing? Definition of Concentrated Marketing, Concentrated Marketing Meaning and Concept
The marketing concentrate is a hedging strategy market consisting focus all marketing efforts on a market segment that has unique and specific needs.
In other words, concentrated marketing consists of specializing in a specific group of consumers. Therefore, in concentrated marketing, the company must adapt its products and its marketing programs to the specific needs of that segment.
Importantly, for concentrated marketing to be successful, it requires companies to fully understand the needs of the segment they serve. This, proposing a marketing mix that fully satisfies these needs, which implies that, although the segment it serves is small, the segment is highly profitable.
Above all, this strategy is used by small and medium-sized companies, as they specialize in a particular product category. The company concentrates all its efforts on a single market segment and plans a unique strategy for this.
Characteristics of concentrated marketing
Among the main characteristics we find:
1. It is used by companies that have few resources
First of all, it is a strategy used by companies that have few resources. For that reason, they use all their resources to focus on a single segment, using a single marketing mix that best meets the needs of that segment.
2. Concentrated marketing focuses on small groups
Second, companies that use concentrated marketing seek to position themselves in small market segments. They do this by designing and marketing goods and services that specifically meet the needs of that group.
3. Efforts are concentrated
Third, marketing focuses all its efforts on offering a marketing mix that fits that small market group. Thus, the concentration of efforts allows marketing to become more effective.
How to apply concentrated marketing?
When applying niche marketing we must:
1. Identify the segment
Above all, the company must identify the segment it wants to target. For this, it is convenient to know their interests and preferences. What they like and what they don't like about the products. Also, what motivates them to buy the product.
In addition, it must be considered that the segment has the necessary size and that there is not much competition. All this so that it can become a business opportunity, that is, one that is profitable for the company.
2. Recognize problems and solve them
Also, the company must know in depth the needs of its segment. Only in this way will you be able to detect problems and dissatisfactions. The company must generate proposals for solutions to these problems.
Of course, this will help you get a good foothold in the market, as you can carefully tailor your product, pricing, and marketing programs to the specific needs of the market group you serve. This allows for better marketing of your products.
3. Carry out the demand projection
Undoubtedly, the projection of expected demand is essential to determine whether it is profitable to focus on that market segment. Only if the company is confident that effective sales will be achieved will it be worthwhile to focus all marketing efforts to serve the chosen segment.
4. Competitor analysis
Additionally, it is important to determine the level of competition in the segment that you choose to serve. This, analyzing their weaknesses and strengths, in order to seek a differentiation in the offer of goods and services, in order to achieve a competitive advantage.
Advantages of concentrated marketing
Among the most important advantages we find:
1. Little competition
Naturally, when a company focuses on a particular market segment it has less competition. On some occasions the competition could be nil, so it is a good business opportunity. This helps the company to achieve a fast and efficient positioning.
2. Better knowledge of the customer
Companies that apply concentrated marketing focus on small market segments, which allows them a better understanding of their customers. All this contributes to the design of more personalized marketing mix strategies, which becomes an excellent market opportunity.
3. Barriers to entry
In fact, focusing on one market segment potentially reduces competition because it is more difficult to enter to serve the same market segment. This is an excellent opportunity for a company that is serving that market group.
Disadvantages of concentrated marketing
Among the disadvantages we can mention:
1. You can attract other competitors
Of course, if the market segment becomes attractive, it can attract more competitors. This can cause great risks for the company that has specialized in this segment, causing the market to destabilize.
2. There are more risks
Generally, the risk of serving a single segment is higher than when serving multiple market groups. The reason is that, if the tastes or interests of the segment served change, the company will not be able to sustain itself within the market.
In conclusion, it can be said that the concentrated marketing strategy hopes to satisfy a need in a specific way. This allows operating with low costs, but requires a lot of knowledge of the target audience.
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