The Advantages of Differentiated Marketing

A market consists of individual customers who have unique product wants and needs. Therefore, small businesses frequently attempt to differentiate two or more sets of customers with unique needs which might be met with the company's products or services, from other customers within a market. Offering products or services that satisfy particular customers' requirements and creating a marketing program that conveys product attributes to customers benefits a company in many ways. For example, differentiated marketing might aid a company in establishing a leadership position in the market and increase the profitability of the company's product offering.

Differentiate Customer Groups

You research a market to clarify the specific needs of individual customers and utilize those needs to differentiate individual customer groups within the market from others. By differentiating customers based on specific needs, you are able to select customers you want to serve based on your company's capabilities. In turn, you design products with specific characteristics to accommodate the needs of one or more customer groups. As a result, you achieve a competitive advantage by offering products that best serve a selection of potential customers within the market.

Evaluate Competitors Methodically

Market segmentation enables you to explore the market position -- the niche each brand fills -- of your competitors. If you understand how existing and potential customers perceive your competitors and their products, you will be able to identify overlooked opportunities. In turn, using differentiated marketing, you can create and market products to satisfy the needs of two or more market segments.

Create Mutual Benefit

Using a differentiated marketing strategy, you choose groups of customers you believe you can best serve based on your company's capabilities. In addition, you choose to produce or provide goods that meet customers’ needs, which will result in an efficient use of your operational resources. In turn, customers will choose your products if those products best meet their needs, which will increase their product satisfaction and your profits.

Perform In-Depth Market Evaluation

Using market segmentation -- differentiation -- enables you to perform an in-depth evaluation of the characteristics of your potential customers. You can use information regarding geographical, demographic and other characteristics of your customers to create products to identify very specific customer needs and wants. In turn, you can adopt a differentiated strategy and design and market products to meet the needs of particular customer groups, which enables you to achieve a competitive advantage.

Allocate Resources Effectively

Your market's customers have a variety of needs and preferences. By segmenting customers based on specific needs and adopting a differentiated strategy, your company's decision-makers can better define marketing goals and allocate limited resources required to accomplish the goals. A differentiated strategy enables you to select profitable two or more market segments on which to concentrate your efforts.

Increase Profits

Understanding the needs of particular customers enables your company to design a marketing offer that appeals to those customers. This differentiation approach is a more lucrative approach for some companies than a mass marketing approach because the more your product's characteristics meet the needs of your customers, the higher the likelihood that sales volume will increase over time. In addition, customers may be willing to pay a higher price for a product that meets the majority of their needs than for a product that meets only a few needs. These benefits are multiplied with a differentiated strategy by the number segments to which you market your products or services.

Design Appropriate Marketing Strategy

Research of individual market segments might enable you to create a marketing program that leads to more predictable customer response to your products than would a mass marketing strategy. Understanding you customers enables you to design an appropriate promotional campaign and public relations initiatives to improve sales. As a result, your marketing program may avoid costly mistakes and be more effective in increasing sales revenues.