Undifferentiated Marketing

What comes to your mind when you hear the word "undifferentiated marketing"? Does it remind you of something similar being offered to the same group? Well, it is exactly that. Undifferentiated marketing is a marketing strategy that treats customers all the same, regardless of gender, age, location, or income level. It is also known as mass marketing. Let's dive in and explore this marketing concept. 

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Table of contents

    Undifferentiated Marketing Definition

    Undifferentiated marketing is a marketing strategy that aims to reach as large an audience as possible. Instead of dividing the market into segments, it treats all buyers as a homogeneous group and markets to them similarly. Undifferentiated marketing is also called mass marketing.

    Undifferentiated marketing is a marketing strategy that treats the market as a whole.

    Undifferentiated marketing is best applied to products with a universal appeal such as furniture, cars, laptops, electricity, gas, soap, paper towel, etc. It uses the same marketing strategy for all segments of the population. There's usually only one marketing mix - one product, price, placement, and promotional strategy. Unlike differentiated marketing, undifferentiated marketing looks for shared features among customer groups.

    Zara is a company that adopts undifferentiated marketing to reach a mass audience. The company does not establish its presence by spending tons of money on advertising but through strategic placement of physical stores, word-of-mouth, and social media marketing. Their core strategy is based on "experience, exclusivity, affordability, and differentiation".1

    Undifferentiated Marketing Strategy

    Undifferentiated marketing strategy treats the market as a whole rather than segmenting it. This allows companies to save costs on market research and personalizing advertising campaigns. Since there is only one marketing mix, it can be adapted and used for multiple campaigns. Marketers do not have to customize marketing messages for each customer group. However, a lot of resources are still required to access the mass market.

    Here are the main features of an undifferentiated marketing strategy:

    • Products have universal demand

    • Treat the market as a whole

    • Apply one marketing mix to all campaigns

    • Might require a lot of resources to reach a wide audience.

    Undifferentiated marketing strategies often make use of mass media, including:

    • Traditional media such as TV, press conferences, radio, magazines, newspapers, etc.

    • Digital media such as social networks, podcasts, websites, video games, etc.2

    Mass media is the best place for brands to reach an audience as nowadays most people appear on at least one media channel. Media is used for all sorts of activities, including work, communication, learning, and entertainment.

    The use of conventional media (TV, magazines, etc.) is still prevalent among large corporations. However, most companies today take advantage of digital media to save time and cost in promoting their products.

    Websites and social platforms provide a cheap and sometimes free way for companies to increase brand awareness. There are many digital marketing strategies such as SEO, social media marketing, influencer marketing, digital advertising, etc.

    Undifferentiated Marketing Approach

    Many marketers would stress the importance of differentiation and specificity when it comes to marketing. However, in cases where customer needs are rather basic and similar, an undifferentiated marketing approach can save the company a lot of promotion costs.

    Soap, salt, and sugar are examples of products where not much differentiation is needed. Dividing the market into segments and tailoring the needs of each group will be a huge waste of time. Companies are better off promoting the product to everyone similarly and focusing resources on more important aspects of the business.

    Undifferentiated Marketing Advantages and Disadvantages

    Undifferentiated marketing can be effective in certain situations, but it also has its advantages and disadvantages.

    Table 1. Advantages and disadvantages of undifferentiated marketing strategy
    AdvantagesDisadvantages
    Cost-effectiveLack of personalization
    Wider reachLimited effectiveness

    Advantages of Undifferentiated Marketing

    Advantages of undifferentiated marketing:

    1. Cost-effective: Undifferentiated marketing is a cost-effective way of advertising to a large audience. Businesses can save money by creating a single campaign that can be used for all consumers rather than creating different campaigns for different groups. are also lower because businesses can produce a large volume of marketing materials at a lower cost per unit.
    2. Wider reach: Undifferentiated marketing helps businesses reach a wider audience. It's an effective way to introduce new products and services to the market and can help create brand awareness on a large scale.

    Disadvantages of Undifferentiated Marketing

    Disadvantages of undifferentiated marketing include

    1. Lack of Personalization: Undifferentiated marketing may not resonate with some consumers as it doesn't address individual needs and preferences. This can lead to reduced engagement and sales.
    2. Limited Effectiveness: Undifferentiated marketing may be less effective than targeted marketing, especially regarding specific products and services. This is because it assumes that all consumers have the same needs and preferences, which is often not true.

    Undifferentiated Marketing Examples

    Undifferentiated marketing approach is often used for products that have universal appeals, such as:

    • basic household goods like cleaning supplies,
    • clothing,
    • food staples like sugar and flour,
    • telecommunication services.

    Undifferentiated marketing can also be effective for products that are new to the market and have yet to establish a specific target audience. However, this strategy can be risky as it assumes that all consumers have similar needs and preferences, which may not always be true. We will look closely at examples of undifferentiated marketing in clothing, soda beverages and telecommunication industries.

    Undifferentiated Marketing Example: Clothing

    Clothing is a product with universal demand. From small children to adults, everyone needs clothes for daily use. This is why most companies in the clothing sector adopt an undifferentiated, rather than customized, marketing strategy to promote their products.

    undifferentiated marketing inside a clothing store studysmarter

    An example is Zara - a fashion store chain that has appeared with more than 2,000 physical stores around the world. The brand adopts the same marketing mix for all locations - trendy products, affordable prices, word-of-mouth and social media marketing (promotion), and a smooth in-store and online shopping experience (place).

    Undifferentiated Marketing Example: Soda

    Pepsi and Coca-Cola are global leaders in the soda industry. Both spend a huge amount of money on advertising and promotion to capture a wider market share. However, they also segment the market to cater to different tastes and increase overall sales. Pepsi and Coca-Cola are the best examples of combining undifferentiated and differentiated marketing practices.

    undifferentiated marketing coca-cola bottles and cans studysmarter

    Undifferentiated Marketing Example: Telecommunication

    Like clothing and soda, people around the world use the Internet daily. Internet service providers can spend less time on tailoring their service to each individual and focus more on quality and customer experience.

    For example, Sympatico is a popular Internet service in Canada, with more than 50,000 members. However, their vision extends above the national geography. They want to break “political, economic, and language barriers” and bring the Internet to all with a global-scale telecommunications service.3

    Differentiated Marketing vs. Undifferentiated Marketing

    Differentiated marketing and undifferentiated marketing are at opposite ends of the spectrum. While differentiated marketing uses differentiation to expand the customer base, undifferentiated marketing does the opposite. It focuses on common features among customer groups.

    Both differentiated and undifferentiated marketing is viable marketing strategies, but applicable in different contexts. Undifferentiated marketing would be best applied to staple, everyday products such as salt, sugar, soap, etc. Meanwhile, differentiated marketing is more suitable for products with a dispersed need among customers. For example, coffee can be targeted to different customer groups - students with low-budget, working adults with more available income, and gourmet customers who enjoy premium coffee.

    Another difference is that while undifferentiated marketing uses only one message to appeal to the entire market, different marketing customizes the message for different groups.

    To see a comparison table between these two strategies, check out our explanation of Differentiated marketing.

    Undifferentiated Marketing Strategy Advantages and Disadvantages

    Now if you're confused about when to adopt an undifferentiated marketing campaign, this section will give you further hints by listing undifferentiated marketing strategy advantages and disadvantages.

    Advantages of Undifferentiated Marketing

    Here are the main advantages of undifferentiated marketing:

    • Low cost - Undifferentiated marketing strategy reduces market segmentation and customized promotion costs. However, companies might still have to spend a lot of money on mass marketing strategies like TV commercials and sponsorships.

    • More standardized process - The same process of marketing can be used over and over again. There’s no need to devise multiple campaigns for each segment.

    • Less research - Since the market is treated as a whole, less research into each segment is needed. Companies focus on shared characteristics rather than the differences between groups.

    • Higher profit margins - The lower costs of undifferentiated marketing campaigns can result in higher profit margins for the company.

    Disadvantages of Undifferentiated Marketing

    There are three main disadvantages of adopting an undifferentiated marketing strategy:

    • Wasted resources - Undifferentiated marketing promotes the product to everyone, including those who are not interested in the business or have no buying intention. This is known as wasted exposure, which can put a strain on the company’s budget, especially if the business is small.

    • Lower relevancy - Marketing messages in undifferentiated marketing may not be as specific and relevant as in differentiated marketing. It might affect customer sentiments when exposed to the message.

    • Less responsiveness to market change - The standardized way of doing things may prevent the business from thinking out of the box and responding slowly to changes in taste and preferences.

    Undifferentiated marketing can help companies achieve a massive market size and economies of scale. However, since the products are homogenous, companies can get stuck in fierce competition.

    A classic example comes from the two soda giants Pepsi and Coca-Cola. Both pay hefty fees for advertising extensive campaigns to maintain customer loyalty and highlight the nitty-gritty differences that they have.

    The undifferentiated marketing strategy adopted by Pepsi and Coca-Cola is a bit different. While Pepsi uses celebrities to gather public attention, Coca-Cola promotes itself as a beverage of "happy memories and nostalgia".4 They also extend the product line to serve customers in different segments.

    undifferentiated marketing coca-cola vs pepsi studysmarterFig. 3 - Coke and Pepsi vending machines placed next to each other

    Undifferentiated Marketing - Key takeaways

    • Undifferentiated marketing is a marketing strategy that treats the market as a whole.
    • Undifferentiated marketing is best applied to products with universal demand. It often uses one single marketing message to appeal to all customer groups.
    • Undifferentiated marketing focuses on shared characteristics rather than the differences among customer groups.
    • The main advantages of undifferentiated marketing include lower costs, less research, a more standardized process, and a higher profit margin.
    • The disadvantages of undifferentiated marketing are wasted exposure, less relevancy, and less responsiveness to market change.

    References

    1. Avada, Zara Marketing Strategy - To Be The World's Top Fashion Retailer, https://blog.avada.io/resources/zara-marketing-strategy.html, 2022.
    2. Leverage Edu, Types of Mass Media, https://leverageedu.com/blog/types-of-mass-media/, 2022.
    3. Tom Manley, Providing a Mass-Market Internet Service: Challenges and Solutions,https://web.archive.org/web/20160103053614/http://www.isoc.org/inet96/proceedings/b5/b5_4.htm, 2018.
    4. Business Essay, Oligopoly Economics: Coca-Cola & Pepsi Competition.
    Frequently Asked Questions about Undifferentiated Marketing

    What is undifferentiated marketing?

    Undifferentiated marketing is a marketing strategy that treats the market as a whole. It uses one marketing mix - one price, one product, one placement, and one promotional strategy to appeal to all customers in the market.

    What is an undifferentiated marketing strategy?

    An undifferentiated marketing strategy does not segment the market but treats all customers as a homogenous group. An undifferentiated marketing strategy often uses mass media to promote products and services. 

    What is an example of undifferentiated marketing?

    An example of undifferentiated marketing is a massive clothing store chain that uses the same marketing technique for all locations around the world. Rather than customizing products to individual customers, it produces mass and trendy clothes for the audience at large. 

    Does Pepsi use undifferentiated marketing?

    Pepsi does use undifferentiated marketing to capture a wider market share in the soda industry. 

    Is it better to use multi-segment marketing or undifferentiated?

    The use of multi-segment and undifferentiated marketing depends on product types and customer needs. Multi-segment marketing is suited to products with diverse needs and wants among the customers, whereas undifferentiated marketing is best applied to generic products with universal demand. 

    Test your knowledge with multiple choice flashcards

    Undifferentiated marketing is a _________ marketing strategy. 

    Undifferentiated marketing focuses on the ____________ rather than ________ among customer groups. 

    Undifferentiated marketing is best applied to products with universal demand. 

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