Page 323 - Introduction to Business

CHAPTER 8 Marketing Basics 297

EXHIBIT 8.7
Alternative Target Market Strategies

Undifferentiated Marketing
Marketing mix Market

Niche Marketing: Multiple Segments
Marketing mix 1
Segment 1
Marketing mix 2 Segment 2
Segment 3
Marketing mix 3

Niche Marketing: One Segment
Marketing mix
Segment 1
Segment 2
Segment 3

• Dial customized its soaps and detergents by geographic regions, and enjoyed
annual growth rates of 8 to 12 percent and generated an outstanding return on
stockholders’ equity of 20 percent. 43
• Key Corp’s Society Bank, Cleveland, Ohio, inaugurated a Dino Saver Club for
children 12 and under. Within four months, 20,000 accounts, with $3 million in
deposits, were opened. 44
• Natural Nectar developed FI-BAR, a low-fat, cholesterol-free, high-fiber gra-
nola snack bar, for the young adult and senior market. Revenues jumped from
$5 million to $35 million. 45
• BioCosmetics Research Labs introduced a Black Opal cosmetics line for
African American women that generated $2 million in sales the first year. 46
• Viewing of television cable channels that are directed to niche markets—the
Travel Channel, Cooking Channel, History Channel, ESPN—is exceeding that
of the regular networks. 47
Niche market programs are successful for a variety of reasons. They are more closely
tuned to the needs of specific markets. The closer matching can result in improved
levels of customer loyalty and satisfaction, and ultimately higher sales and profits.
According to John T. Schiffman, chairperson of Smith, Batchelder & Rugg, a
medium-sized accounting firm located in Lebanon, New Hampshire, a niche-
market strategy allowed them to concentrate on markets where they could have a
“significant and lasting influence.” 48 Because only one or several markets are
involved, they can be served much more quickly—an important advantage as speed
of response has become such a critical competitive weapon today. Niche marketing
also allows companies to focus, resulting in more effective use of limited resources,
such as time, money, and people. Focus provides executives with clear-cut visions of
the markets they will serve, products or services to be marketed, quality levels
expected, and the basis of competitive advantage. By not trying to be everything to
everybody, scarce resources are not dissipated in markets that have little use for a

Copyright 2010 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.