Concentrated Strategy

Posted in Marketing and Strategy Terms, Total Reads: 2272
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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.

Hence, this concludes the definition of Concentrated Strategy along with its overview.

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