Posted in Marketing and Strategy Terms, Total Reads: 1946
Definition: Concentrated Strategy
Concentrated marketing strategy is a method adopted by small companies with limited financial resources to develop and market a particular product targeting a particular market segment. This enables such companies to invest their limited resources in a particular area and attain a strong market position without adopting mass distribution or advertising. It is also referred to as niche marketing. This concentrated strategy enables the development of a distinct niche market for a particular product or brand.
It is also adopted by companies providing highly specialized goods and services. Toyota is a classic example of concentrated marketing. It has obtained a large market share in a small segment of hybrid vehicles by being one among the first to enter that segment. Toyota introduced a wide variety of hybrid vehicles thereby becoming the World leader in that segment.
The advantage of greater customer satisfaction in a single market is offset by a disadvantage of the risk associated with putting all your eggs in a single basket. The organization adopting a concentrated strategy should deal with the risks associated like product failure, changing preferences of the target segment and introduction of an improved model by competitors.