Page 256 - Marketing Management

IDENTIFYING MARKET SEGMENTS AND TARGETS | CHAPTER 8 233

Full |Fig. 8.4|
Market
Multiple
Coverage Segments Single Individuals Possible Levels of
Segments as Segments
Segmentation

Customization
Mass Market

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 differentiated or undifferentiated marketing.
In undifferentiated or mass marketing, the firm ignores segment differences and goes after the
whole market with one offer. It designs a marketing program for a product with a superior image
that can be sold to the broadest number of buyers via mass distribution and mass communications.
Undifferentiated marketing is appropriate when all consumers have roughly the same preferences
and the market shows no natural segments. Henry Ford epitomized this strategy when he offered
the Model-T Ford in one color, black.
The argument for mass marketing is that it creates the largest potential market, which leads to
the lowest costs, which in turn can lead to lower prices or higher margins. The narrow product
line keeps down the costs of research and development, production, inventory, transportation,
marketing research, advertising, and product management. The undifferentiated communication
program also reduces costs. However, many critics point to the increasing splintering of the mar-
ket, and the proliferation of marketing channels and communication, which make it difficult and
increasingly expensive to reach a mass audience.
When different groups of consumers have different needs and wants, marketers can define multi-
ple segments. The company can often better design, price, disclose, and deliver the product or service
and also fine-tune the marketing program and activities to better reflect competitors’ marketing. In
differentiated marketing, the firm sells different products to all the different segments of the market.
Cosmetics firm Estée Lauder markets brands that appeal to women (and men) of different tastes: The
flagship brand, the original Estée Lauder, appeals to older consumers; Clinique caters to middle-aged
women; M.A.C. to youthful hipsters; Aveda to aromatherapy enthusiasts; and Origins to ecoconscious
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consumers who want cosmetics made from natural ingredients. Perhaps no firm practices differen-
tiated marketing like Hallmark Cards, which celebrated its 100th birthday in 2010.

Hallmark Hallmark Hallmark’s personal expression products are sold in more than 41,500
retail outlets nationwide and account for almost one of every two greeting cards purchased in the
United States. Each year Hallmark produces 19,000 new and redesigned greeting cards and
related products including party goods, gift wrap, and ornaments. Its success is due in part to its
vigorous segmentation of the greeting card business. In addition to popular sub-branded card
lines such as the humorous Shoebox Greetings, Hallmark has introduced lines targeting specific market seg-
ments. Fresh Ink targets 18- to 39-year-old women. Hallmark Warm Wishes offers hundreds of 99-cent
cards. Hallmark’s three ethnic lines—Mahogany, Sinceramente Hallmark, and Tree of Life—target African
American, Hispanic, and Jewish consumers, respectively. Hallmark’s newer Journeys line of encouragement
cards focused on such challenges as fighting cancer, coming out, and battling depression. Specific greeting
cards also benefit charities such as (PRODUCT) RED™, UNICEF, and the Susan G. Komen Race for the Cure.
Hallmark has also embraced technology.Musical greeting cards incorporate sound clips from popular movies,
TV shows, and songs. Online, Hallmark offers e-cards as well as personalized printed greeting cards that it
mails for consumers. For business needs, Hallmark Business Expressions offers personalized corporate holi-
day cards and greeting cards for all occasions and events. 56

Differentiated marketing typically creates more total sales than undifferentiated marketing.
However, it also increases the costs of doing business. Because differentiated marketing leads to
both higher sales and higher costs, no generalizations about its profitability are valid.