Name and describe the three targeting strategies. For each strategy, name one advantage and one disadvantage of using the strategy.

Question

What will be an ideal response?

Answer 1

UNDIFFERENTIATED TARGETING STRATEGY. This strategy adopts a mass-market philosophy in which one marketing mix is targeted at the entire market. Advantages include economies of mass production and lower marketing costs. Disadvantages include susceptibility to competitive inroads and a higher likelihood of unimaginative product offerings with little appeal.

CONCENTRATED (OR NICHE) TARGETING STRATEGY. This strategy entails the selection of one segment of a market for targeting. Advantages include concentrated efforts on a highly specialized marketing mix that meets target needs, a focus of resources, the ability to compete against larger firms, and the ability to establish a strong position in a desirable market segment. Disadvantages include risky dependence on a single segment, necessity for success, and threat of competitive advances.

MULTISEGMENT TARGETING STRATEGY. When a firm chooses to serve two or more market segments and develops distinct marketing mixes for each segment, it is practicing multisegment targeting. Advantages potentially include greater sales volume, higher profits, larger market share, and economies of scale in manufacturing and marketing. Disadvantages include high costs and cannibalization.