Differentiated marketing

Differentiated marketing
Using a differentiated marketing strategy, a firm decides to target several market segments
and designs separate offers for each. General Motors tries to produce a car for every ‘purse,
purpose and personality’. By offering product and marketing variations, it hopes for higher
sales and a stronger position within each market segment. GM hopes that a stronger position
in several segments will strengthen consumers’ overall identification of the company with
the product category. It also hopes for greater repeat buying because the firm’s offer better
matches the customer’s desire.
Originally Martini products were not marketed separately. Advertising concentrated on
the Martini brand and its exciting international lifestyle: ‘anytime, anyplace, anywhere’.
That changed to having the main Martini brands aimed at clearly defined target markets:
n Martini Rosso, the most popular variety, is aimed at a broad sector of the market.
Its ads show it being enjoyed by an attractive young couple with ‘Our martini is
Rosso’ or by a small chic group relaxing in elegant surroundings: ‘The bitter sweet
n Martini Bianco is targeted at people in their twenties who like light alcoholic drinks. It is
shown being casually drunk with ice by a sporty, boisterous set, out of doors: ‘The sunny
side of life’.
n Martini Extra Dry is for the sophisticated drinker. The advertising focuses on the bottle
and the product in an atmosphere of quiet sophistication.
Differentiated marketing typically creates more total sales than does undifferentiated
marketing. KLM could fill all the seats on its New York flights charging APEX fares, but
its own income and the number of flyers are increased by segmenting the market. In the
main cabin or on the upper deck of each Boeing 747–400 taking off from Schiphol Airport,
there will be about 300 economy passengers. Some of these, holding restricted APEX tickets
costing about a500, will be sitting next to people who have paid over a1,000 for the same
flight. They may have booked late or have an open ticket. Forward of them will be about
80 Flying Dutchmen, KLM business-class passengers whose companies paid a3,000 for
each seat. In the extreme nose could be about 20 first-class passengers at over a5,000 each.
The flight could not operate if everyone paid APEX fares because the Boeing would be
full before the airline had covered the operating cost. If only full economy fares were
charged, many passengers could not afford to fly, so an economy-class 747–400 could
not be justified. Also, some first-class passengers would be deterred from travelling
with the crowd. First-class passengers demand big seats, and their catering alone costs
over a100 each, but they help maximise the revenue of the airline and the number of
people flying.