How Concentrated Marketing Differs

Is concentrated marketing the same as niche marketing?

Not necessarily. There is certainly a significant overlap, and some marketing textbooks will use the term interchangeably. However, there are subtle differences between a concentrated marketing strategy and a niche marketing strategy.

The essence of “niche marketing” is where we target part of the overall market, most often with a limited product range, and try to dominate that segment to the extent of almost forming a monopoly.

Please note in the above sentence, we have underlined “part of the overall market”, rather than making reference to a market segment. This is the main subtle difference between concentrated marketing and niche marketing.

Concentrated marketing refers to pursuing a single target market only, whereas niche marketing refers to a focus upon a particular part of the market. Indeed, a successful niche market and may choose to target a single target market, or instead, they may pursue multiple target markets.

As an example, let’s consider Etsy, which is defined as an “e-commerce company focused on handmade or vintage items and craft supplies”. Essentially, they are a form of Amazon or eBay or any other e-commerce site, but they focus upon particular types of products – which makes them a niche marketer, as they are so focused.

However, they would have multiple target markets who use their site, which would include:

• fashion designers
• make-at-home hobbyists
• occasional dress and design makers (at home)
• people interested in fashion and design
• consumers seeking a unique clothing or design product
• plus many more

So while Etsy is very specialized and focused, making them a niche marketer because they do not compete on a broader basis, they have not adopted a concentrated marketing strategy as they are pursuing a broad range of target markets.

In summary, the decision to focus on a limited product range or service offering and be a specialist (a niche marketer), is a separate strategic decision the selection of how many target markets to pursue (whether to be adopt a concentrated or differentiated target market strategy).

Definitions and Core Differences

Concentrated Marketing:

• Involves selecting and pursuing a single target market with a tailored marketing mix.
• Focuses on meeting the specific needs of one clearly defined segment of the overall market.
• The emphasis is on deep specialization and resource efficiency within that single segment.

Niche Marketing:

• Targets a narrowly defined part of the market that is often underserved or overlooked by larger competitors.
• The aim is to dominate this segment by offering highly specialized products or services.
• Niche marketing does not necessarily limit itself to a single target market; a firm may target multiple groups within the niche if they share similar needs or preferences.

Key Distinction: Concentrated marketing refers to how many target markets a firm chooses to pursue (typically one), while niche marketing refers to the nature and focus of the market itself (a highly specific and specialized area).

2. Overlap Between Concentrated and Niche Marketing

• Both strategies often involve specialization and focus on specific customer needs.
• Both aim to build strong expertise and a loyal customer base within a limited scope.
• Many small businesses or startups use these strategies to establish a foothold in the market.

3. Where They Differ

4. Example to Highlight the Difference

Etsy:

• Niche Marketer:
  Etsy focuses on handmade, vintage, and craft items, positioning itself as a specialized e-commerce platform. Its product offering is limited to these categories, making it a niche marketer.
• Not Concentrated Marketing:
  Etsy serves multiple target markets within this niche, such as:
  • Fashion designers.
  • Hobbyists who make items at home.
  • Consumers looking for unique or custom-made items.
    This broad range of target markets means Etsy adopts a differentiated marketing strategy within its niche, not a concentrated one.

Local Vegan Bakery:

• Concentrated Marketer:
  A local vegan bakery focusing solely on vegan consumers within its community is an example of concentrated marketing. It targets a single market (vegan consumers) with a tailored offering of vegan-friendly baked goods.
• Niche Marketer:
  The bakery also qualifies as a niche marketer because it caters to a specialized dietary preference and competes on focus rather than scale.

5. Strategic Implications

The distinction between concentrated and niche marketing becomes important in strategic decision-making:

• Concentrated Marketing:
  A firm may choose this strategy to build deep expertise and establish dominance in a single market segment, often as a starting point. Over time, it may expand into multiple segments, transitioning to a differentiated strategy.
• Niche Marketing:
  A firm targeting a niche is committed to serving the unique needs of that part of the market. This could involve multiple target markets as long as they align with the niche focus.

6. Summary

Concentrated marketing and niche marketing are interconnected but distinct strategies:

• Concentrated marketing focuses on targeting a single market segment, irrespective of its niche characteristics.
• Niche marketing emphasizes specialization and domination within a narrowly defined market, often serving multiple target markets.

The two approaches are not mutually exclusive, but they represent different aspects of market strategy—target market count versus market scope.

Is concentrated marketing another term for mass marketing?

Concentrated marketing is NOT the same as mass marketing. Mass marketing is where a firm has a single marketing mix offering that they believe is suitable for everyone. That means that a mass market firm does NOT have a target market in mind.

While a firm pursuing concentrated marketing strategy will also have a single marketing mix offering, this has been designed with a particular target market in mind.

Is concentrated marketing another term for mass marketing?

Concentrated marketing is NOT the same as mass marketing. Mass marketing is where a firm has a single marketing mix offering that they believe is suitable for everyone. That means that a mass market firm does NOT have a target market in mind.

While a firm pursuing concentrated marketing strategy will also have a single marketing mix offering, this has been designed with a particular target market in mind.

Therefore, the difference between concentrated market strategy and a mass marketing strategy is that a concentrated marketer is pursuing a particular target market. Please see the following diagram for a simple overview:

1. Understanding Mass Marketing

Definition:
Mass marketing involves offering a single, standardized marketing mix to the entire market, with the assumption that all consumers have similar needs and preferences. The goal is to maximize reach and appeal broadly without considering segment-specific differences.

Key Characteristics:

• No Target Market: A mass marketing strategy does not focus on any particular group of consumers. Instead, it views the market as a homogeneous whole.
• Standardization: The same product, pricing, promotion, and distribution strategies are applied universally.
• Economies of Scale: This approach relies on large-scale production, distribution, and promotion to minimize costs and maximize profitability.
• Limited Customization: Products are designed to be “one-size-fits-all” rather than tailored to specific customer needs.

Example: Coca-Cola in its early years adopted a mass marketing strategy, offering a single product with a universal appeal and standardized messaging such as “Drink Coca-Cola.”

2. Understanding Concentrated Marketing

Definition:
Concentrated marketing, often called niche or focused marketing, involves directing all marketing efforts and resources toward a single, well-defined target market. The marketing mix is tailored specifically to meet the needs of that group.

Key Characteristics:

• Focused Target Market: The strategy revolves around a specific segment of the market with distinct needs or preferences.
• Specialization: The firm builds expertise and positions itself as a leader within the chosen segment.
• Tailored Offering: The product, pricing, promotion, and distribution are designed specifically for the target market.
• Efficient Resource Allocation: By narrowing focus, the firm can allocate resources more effectively, avoiding dilution across multiple segments.

Example: Rolls-Royce targets high-net-worth individuals seeking luxury and exclusivity in automobiles, making it a prime example of concentrated marketing.

3. Key Differences Between Mass Marketing and Concentrated Marketing

4. Strategic Differences

1. Market Perception:
   • Mass Marketing: Assumes homogeneity; consumers are perceived to have similar needs.
   • Concentrated Marketing: Recognizes heterogeneity; focuses on understanding and meeting the needs of a specific group.
2. Resource Allocation:
   • Mass Marketing: Spreads resources broadly to maximize reach.
   • Concentrated Marketing: Focuses resources narrowly to maximize impact within the target market.
3. Brand Positioning:
   • Mass Marketing: Aims for universal appeal and broad recognition.
   • Concentrated Marketing: Positions the brand as a specialist or leader within a niche.

5. Why Concentrated Marketing is NOT Mass Marketing

While both strategies involve a single marketing mix, the intent and application differ significantly:

• Mass Marketing: The single marketing mix is designed to appeal to everyone, without any specific target in mind.
• Concentrated Marketing: The single marketing mix is meticulously crafted to meet the specific needs of one particular target market.

For example:

• A mass marketer like McDonald’s in its early years offered a uniform menu worldwide, assuming universal preferences.
• A concentrated marketer like Lululemon designs its products specifically for yoga practitioners, tailoring every aspect of its marketing mix to this group.

6. Summary

The key difference between concentrated marketing and mass marketing lies in their approach to the market:

• Mass marketing targets everyone with a standardized product and message.
• Concentrated marketing focuses deeply on a specific target market with tailored offerings.

Understanding this distinction is critical for firms as they evaluate how best to allocate their resources and position themselves in the marketplace.

Related Articles

• The Challenge of Mass Marketing
• What is Concentrated Marketing?
• How Can Concentrated Marketers Grow ?
• Niche Marketing Examples
• Differentiated or Concentrated Marketing?