Core Concepts of Marketing

Accessmarket

needsandcompany

capabilitiestomeet

needsprofitably.

Selecta

strategic

approachto

themarket.

Undifferentiated

Segmented

Combination

APPROACHINGTHEMARKET 33

ITargetmarket(s) Actions

ITargetmarket(s) Actions

ITargetmarket(s) Actions

FIGURE2.1 Approachestothemarket

manypeopleaspossible. In essence, themarketisviewedasa homogeneousaggregate.
Admittedly,thisassumptionisrisky,andthereisalwaysthechancethat it willappealto
noone,orthattheamountofwasteinresourceswillbegreaterthanthetotal gaininsales.
Forcertaintypesofwidelyconsumeditems(e.g.,gasoline,softdrinks,whitebread),
theundifferentiatedmarket approach makesthemostsense.Oneexamplewasthecampaign
inwhichDr.Pepperemployeda catchygeneral-appealSlOgan,"BeA PEPPER!",thatreally
saidnothingspecificabouttheproduct,yetspoketoa widerangeofconsumers.Often,this
typeofgeneralappealissupported bypositive,emotionalsettings,anda greatmanyrein-
forcersat thepoint-of-purchase.Walkthroughanysupermarketandyouwillobservehun-
dredsoffoodproductsthatareperceivedas nearlyidenticalbytheconsumerandaretreated
assuchbytheproducer-especiallyknock-offorgenericitems.
Identifyingproductsthathavea universa lappealisonlyoneofmanycriteriatobe
metifanundifferentiatedapproachistowork.Thenumberofconsumersexhibitinga need
fortheidentifiedproductmustbelargeenoughtogeneratesatisfactoryprofits.Aproduct
suchasmilkwouldprobably haveuniversalappealanda largemarket;somethinglikea
setofdenturesmightnot.However, adeqJatemarketsizeisnotanabsoluteamountand
mustbeevaluatedfo r eachproduct.
Twootherconsiderations areimportant:theperunitprofitmarginandtheamountof
competition.Breadhasa verylowprofitmarginandmanycompetitors,thusrequiringa
verylargecustomerbase.Aproductsuchasmen'sjockeyshortsdeliversa highprofitbut
hasfewcompetitors.
Successwithanundifferentiatedmarketapproachis alsocontingentontheabilities
ofthemarketertocorrectlyidentifypotentialcustomersanddesignaneffectiveandcom-
petitivestrategy. Sincethevalues, attitudes,andbehaviorsofpeopleareconstantlychang-
ing,it is crucialtomonitorthesechanges. Introducenumerous culturaldifferences,andan
extremelycomplexsituationemerges.Thereisalsothepossibilitythatanappealthatis
pleasingtoa greatdiversityofpeople maynotthenbestrong orclearenoughtobetruly
effectivewithanyofthesepeople.
Finally,thecompetitivesituationmightalsopromoteanundifferentiated strategy.All
wouldagreethatCampbell'sdominatesthecannedsoupindustry,andthatthereislittle
reasonforthemtoengageinmuchdifferentiation.Clearly,forcompaniesthathavea very
largeshareofthemarketundifferentiatedIT'arketcoveragemakessense.Fora company
withsmallmarketshare,it mightbedisastrous.3

ProductDifferentiation

Mostundifferentiatedmarketscontain a highlevelofcompetition.Howdoesa company

competewhenalltheproductofferingsarebasicallythesameandmanycompaniesare

infiercecompetition?Theansweristoengage ina strategyreferredtoasproductdiffer-

entiation.Itisanattempttotangiblyorintangiblydistinguisha productfromthatofall