- Distinguish between targeted marketing and mass marketing and explain what led to the rise of each.
- Describe how targeted marketing can benefit firms.
- Explain why companies differentiate among their customers.
Choosing select groups of people and organizations to sell to is called targeted marketing, or differentiated marketing. It is a relatively new phenomenon. Mass marketing, or undifferentiated marketing, came first. It evolved along with mass production and involves selling the same product to everybody. You can think of mass marketing as a shotgun approach: you blast out as many marketing messages as possible on every medium available as often as you can afford. 1 (By contrast, targeted marketing is more like shooting a rifle; you take careful aim at one type of customer with your message.)
Automaker Henry Ford was very successful at both mass production and mass marketing. Ford pioneered the modern-day assembly line early in the twentieth century, which helped him cost-effectively pump out huge numbers of identical Model T automobiles. They came in only one color: black. “Any customer can have a car painted any color he wants, so long as it is black,” Ford used to joke. He also advertised in every major newspaper and persuaded all kinds of publications to carry stories about the new, inexpensive cars. By 1918, half of all cars on America’s roads were Model Ts. 2
Then Alfred P. Sloan, the head of General Motors (GM), appeared on the scene. Sloan began to segment consumers in the automobile market—to divide them up by the prices they wanted to pay and the different cars they wanted to buy. His efforts were successful, and in the 1950s, GM overtook Ford in the as the nation’s top automaker. 3 (You might be interested to know that before GM declared bankruptcy in 2009, it was widely believed the automaker actually had too many car models. Apparently, “old habits die hard,” as the saying goes.)