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Approaches to the Market

13 May, 2016 - 13:23

The primary task of a product is to facilitate the success of a particular market strategy. A market strategy delineates what the seller wants to accomplish relative to buyers. Strategy is partly based on the approach used to represent the product. There are three general approaches, each of which may change during the life of the product.

Product differentiation is used when a marketer chooses to appeal to the whole market by attempting to cater to the particular desires of all the buyers who hopefully would prefer his brand. This strategy is appropriate if the brand is widely popular and can be continued in general market leadership through strong promotion. Crest toothpaste is an example of a product that has successfully engaged in this strategy. Minor taste changes and formula changes have differentiated a basic product in the minds of many Crest users.

Market extension is a second approach available to the product manager. This entails attracting additional types of buyers into the market or discovering and promoting new uses of the product. Sometimes the addition of new buyers itself provides new uses for the product. 3M's Scotch tape, for example, expanded its uses when it became popular with the general consumer as well as the business consumer. Unfortunately, market extension strategies are extremely easy for competitors to copy. Thus, the brand promoting the new use is benefiting competitors as well.

Market segmentation is the final approach. As discussed in an earlier chapter, segmentation is identifying a group of consumers that tend to respond to some aspect of the market mix in a similar way. Rather than trying to appeal to the whole market, you concentrate your efforts and resources on a part of that market. The trend towards segmenting markets occurs most among branded goods. Even industrial products, such as the many varieties of diesel trucks, is an industry in which small firms survive by concentrating on some special segment of that heterogeneous total market. A company like the Coca-Cola Company found that there were pockets of consumers that, for various reasons, did not purchase Coke. Through the introduction of Tab many years ago, followed by Diet Coke and Caffeine-Free Coke, they feel that most of the market is now covered.