Concentrated marketing is concerned with focusing all available resources on one segment within the total market. It is an attempt to match what the firm can do best with a market niche devoid of strong competitors — a strategy of differential advantage. It means one marketing mix, or rather a narrow product line and some unique competence, which is the basis for the firm’s competitive competitive advantage in a chosen segment.
Concentrated marketing takes a variety of forms, for example, high fashion boutiques and design-oriented housewares shops. Such marketing has been followed by Ford, Rolls Royce, Ambassador Cars, HMT, Quartz and Rolex Watches and glass manufacturing units. Johnson & Johnson’s strategy for infant market (for baby food, baby talcum powder etc.) is a good example of concentrated marketing.
The chief advantage of concentration in marketing is that an organization can become a specialist in the needs of its chosen market segment. This enables it to save costs through large scale production of a few products; and it also tends to have a positive impact on advertising and distribution.
This type of marketing results in a quasi-monopoly position. Highly satisfied customers develop strong loyalties. New products can ensure continued favor in the chosen market niche.
But the main problem of concentrated marketing is that “it is an all-the-eggs-in-one basket” strategy. Due to changes in preferences, there is a risk of decrease in effectiveness. Further, for one product, a company may concentrate so much on one market segment that it may neglect another that might also prove profitable. Again, if demand slackens suddenly, or if competition seriously begins to adversely affect market share, such a company is likely to suffer more.