Sunday, September 10, 2006

Management Lite & Ezy 5 – Mass Marketing vs Target Marketing

In mass marketing, the seller engages in the mass production, mass distribution, and mass promotion of one product for all buyers. Kotler and Keller give two examples of mass marketing in their books – Henry Ford offered Model-T Ford in just one color – black, and Coca-Cola sold only one kind of Coke in a 6.5 ounce bottle.

Today, cars come in various sizes, designs, colors and price tags. Mass marketing is dead in auto industry and has been replaced by target marketing.

We all know that BMW and Mercedes-Benz sell only luxurious cars. Decades ago Japanese car makers sold mainly low-cost compact cars which were fuel-efficient, though today they offer wide ranges of models. Toyota, for example, sells compact Corolla and full size Camry, and it also has a luxury brand, Lexus. Each of these models appeals to different segments of customers.

We may also look at what is happening in fast food industry. MacDonald’s added salads in its menu to attract people who are concerned about their health. Burger King continues to offer high-calorie burgers and sandwiches which are targeted at different group of consumers.

Benefits of target marketing:

i. The company can presumably better design, price, disclose and deliver the product or service to satisfy the target market.

ii. The company can fine-tune the marketing program and activities to better reflect competitors' marketing.

Reference: Kotler & Keller, "Marketing Management", 12th edition

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