Concentrated Marketing

Rather than trying to market its products separately to several segments, a firm may opt for a concentrated marketing strategy. With concentrated marketing (also known as niche marketing), a firm focuses its efforts on profitably satisfying only one market segment. This approach can appeal to a small firm that lacks the financial resources of its competitors and to a company that offers highly specialized goods and services.

Along with its benefits, concentrated marketing has its dangers. Since the strategy ties a firm’s growth to a specific segment, sales can suffer if new competitors appeal successfully to the same segment. Furthermore, errors in forecasting market potential or customer buying habits lead to severe problems.

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