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Market Segmentation and Promotional Products

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When you have a large target market, the only logical step is market segmentation. In other words, split your target market into segments. You can then assess and influence each segment individually. Here’s how promotional products can play into that strategy.

Marketing Sells Products and Services

We all know what the primary purpose of marketing is. We’ve all been its subjects from the very first time we were old enough to comprehend an ad. Put simply, a company’s marketing efforts are aimed at its target audience, and they serve as a means to sell products or services.

To ensure success, the marketing department of any company has to get to know the target market through detailed analysis. Once it pinpoints the main aspects of its preferred demographic, it sends out messages that appeal to the audience directly.

Naturally, these messages have a clear task on hand. They must inform people about specific products and services and persuade those people to buy them.

Is Marketing Really That Simple?

It all does seem simple when put in writing like this, and for some businesses, it is THAT easy. If someone has just one product or target market, they don’t have to do a painstaking analysis of their market. Nor do they need to employ market segmentation.

With just one target market, you’re working with a singular marketing message that should influence all those people. The plot thickens in the case of larger organizations, like car brands.

Though all car manufacturers have to target drivers—any gender, any profession, anywhere—they produce a great variety of cars that fit different kinds of people. Some may prefer a larger trunk and lots of space for a big family. Others, however, may be more into clever tech design that would wow everyone around them.

Clearly, a singular marketing message wouldn’t work on all those types of people because they have different needs. The only suitable solution in that case, then, is market segmentation.


What Is Market Segmentation?

When you have a large target market, the only logical step is to split it up into segments. You can then assess and influence each segment individually.

The purpose is to create the most appealing message for each segment’s audience to ensure the best result. This includes more than just changing the ads’ nature, such as by making them more emotional or informational. Every segment is assigned a specific tone, and various segments may also require completely new content, too.

However, for market segmentation to actually have a solid impact, there are a few rules to keep in mind. The most important of all is that the market segments themselves have to be:

  • Measurable. You can identify the size and the purchasing power of the market and acquire quantifiable data on it.
  • Accessible. The company can reach the consumers with ease and without going over the budget.
  • Substantial. The number of people you want to reach should be large enough to affect the profit, but not too unreasonable. If the segment is too big, it won’t be possible to reach its whole audience. In that case, you risk wasting resources.
  • Differentiable. The people in a specific segment should have similar needs so that the advertising is cost-effective and appeals to as many individuals as possible at once. Each segment should be homogeneous (or as close to that as you can manage).
  • Actionable. You should be able to offer the products or services that a particular segment needs and wants. In other words, the segment needs to have a practical value and be responsive to your marketing strategy or program.

What Is the Difference Between Undifferentiated and Differentiated Market Segmentation?

You’ve likely come across undifferentiated marketing before, but you perhaps call it mass marketing. In general, this form of marketing entails creating one message for the entire audience.

Some of the most significant advantages of undifferentiated marketing include:

  • Improved brand recognition
  • Greater reach
  • Cost-effectiveness, especially in the long run

With undifferentiated marketing, you don’t have to worry about constantly changing up the content. Moreover, there’s no need to research the market in depth. For example, if you own a flower shop, you can employ mass marketing successfully. This is because the needs of your target audience don’t change. They’re all after flowers, one way or another, for various occasions. But those don’t necessarily change your customer base.

Differentiated (or segmented) marketing, on the other hand, entails dividing your market into two or more well-defined, manageable segments. Nike and similar sportswear stores are great examples of this form of marketing. Yes, the company mostly produces trainers. But in order to target specific consumer groups, it offers a wide variety of trainers ideal for different types of people. For example, some of Nike’s specific groups include runners, cyclists, weightlifters, and so on.

What Is Concentrated Marketing?

In contrast, with niche marketing, you target just one particular market segment. The chosen segment has to promise great profitability since we’re talking about targeting a small group of people here. Naturally, this form of marketing also entails doing in-depth research about the group so that you’re able to fine tune products, services, and even prices for this exact segment.

Here’s a Comparison of Undifferentiated vs. Differentiated vs. Concentrated Marketing

To better explain the differences, let’s see an example. Imagine you are looking to open a restaurant and want to employ all three strategies at the same time. Let’s consider this from all three perspectives:

Mass Marketing

You’re looking to appeal to your whole market, so it makes sense to use this type of marketing to promote your restaurant’s opening. Anyone can come, and everyone is welcome!

Segmented Marketing

With segmented marketing you’re looking to also appeal to a few different market segments, such as university students and their families. You’ll appeal to the first group by offering daily specials on drinks and food that they could take advantage of between classes. To win over the second group, you can offer child-friendly meal options and even entertainment specials.

Niche Marketing

You may want to appeal to residents who live near your restaurant, somewhere within 20 miles or so of it. Otherwise, you may focus on the restaurant experience such as fine dining, fast food, or whatever. Or you might focus on the menu by appealing to those with special dietary needs such as vegetarians, vegans, or who choose to eat gluten-free foods.


How Would It Work with Branded Merchandise?

In the case of branded merchandise or promotional products, these three perspectives may look like this:

Mass Marketing

You pick something that appeals to a large number of people and fulfills a need but isn’t limited by their interests. A good example is a classic sports bottle, as anyone can use these, no matter if they’re gym lovers or not.

Segmented Marketing

This time, you pick a specific sport to focus on. The UK is full of football and tennis fans, so you wouldn’t make a mistake by including footballs or tennis balls in your next giveaway. If you were trying to appeal to a US audience, however, you’d make a greater impact with branded baseballs.

Niche Marketing

A more niche market segment of sports fans here would consist of those looking for vintage footballs, racquets, and similar, to give a few examples.


Finally, there’s micromarketing, which entails targeting a tiny group or individuals within a niche market. It’s the smallest segment in marketing you can focus on. Usually, this micro form of market segmentation requires you to customize your marketing strategy for every client within the segment.

Micromarketing isn’t for everyone, of course. Large supermarkets like Lidl or Tesco cannot really market their products to every person individually. It would not only take forever but also be impossible to manage.

But that isn’t to say that some famous companies haven’t tried it. Coca-Cola had a particularly successful micro marketing campaign, “Share a Coke,” several years ago. The company printed individual common names in every country it was distributed in instead of its regular labels, allowing people to literally drink Coca-Cola from bottles that carried their own names.

In terms of branded merchandise, though, it may not be worth it to customize every product for a handful of clients. If they are all individually different, the costs may outweigh the benefits.

That said, companies that have VIP clients or know who their top spenders are could use micromarketing to organize specially customized giveaways. If your list of top clients is short (around five or fewer), it would be possible to pick a product that would suit each of them perfectly and appeal to their needs and wants.

Market Segmentation Could Be Your New Best Friend

Just keep in mind that you would have to put your research skills to extensive use to make market segmentation work for you. You’ll have to get to know your clients just as well as you know your best friend or partner.