A firm attempts to serve all customer groups with all the products they might need. Only very large firms such as IBM (computer market), General Motors (vehicle market), and Coca-Cola (nonalcoholic beverage market) can undertake a full market coverage strategy. Large firms can cover a whole market in two broad ways: through undifferentiated marketing or differentiated marketing.
In undifferentiated marketing, the firm ignores segment difference and goes after the whole market with one offer. It designs a product and a marketing program that will appeal to the broader number of buyers. It relies on mass distribution and advertising. It aims to endow the product with a superior image. Undifferentiated marketing is â€œthe marketing counterpart to standardization and mass production in manufacturing.â€? The narrow product line keeps down costs of research and development production, inventory, transportation, marketing research, advertising, and product management. The undifferentiated advertising program keeps down advertising costs. Presumably, the company can turn its lower costs into lower prices to win the price sensitive segment of the market.
In differentiated marketing, the firm operates in several market segment and designs different products for each segment. Cosmetics firm Estee Lauder markets brands that appeal to women (and men) of different tastes: The flagship brand, the original Estee Lauder, appeals to older consumers; Clinique caters to middle aged women; MAC to youthful hipsters; Aveda to aromatherapy enthusiasts; and Origins to eco-conscious consumers who want cosmetics made from natural ingredients.
Emmis Communication owns three different radio stations in New York with three different distinct targets and positions: WQHTâ€“FM (â€œHot 97â€?) proclaims that it plays â€œblazin hip-hop (urban street music) and R&B,â€? and is popular with listeners in the under 25 crowd. WRKS-FM (98.7 KISS-FM) describes itself as â€œoffering the best variety of old school and todayâ€™s R&B (rhythm and Blues), and appeals to older listeners. WQCD-FM (CD 101.9) I the countryâ€™s largest smooth jazz radio station and targets adults age 24 to 54, who want a radio to relax to and to listen to at work . If one of the formats falls out of fashion, the fact that the other stations tap into different market segments provides a potential buffer to ratings and sales.
Managing multiple segments
The best way to manage multiple segments is to appoint segment managers with sufficient authority and responsibility for building the segmentâ€™s business. At the same time, segment managers should not be so focused as to resist cooperating with other groups in the company. Consider the following situation.
Baxter operates several divisions selling different products and services to hospitals. Each division sends out its own invoices. Some hospitals complain about receiving as many as seven different Baxter invoices each month. Baxterâ€™s marketers finally convinced the separate divisions to send the invoices to headquarter so that Baxter could send one invoice a month to its customers.