Focused Marketing Strategy: A Suitable Approach for Every Business

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As one of the widely implemented marketing strategies, the focused marketing strategy enables businesses to utilize their resources effectively and secure a strong position in their chosen market. But what exactly is a focused marketing strategy? What are its advantages and disadvantages, as well as the common channels for implementation?

I. What is Focused Marketing?

A focused marketing strategy is defined as a marketing approach where a business concentrates its resources on a single market segment or a specific niche that it deems most critical. This strategy allows companies to quickly establish a foothold and create a robust competitive advantage within that market.

Example

For instance, a startup specializing in eco-friendly packaging may choose to focus solely on the organic food market, allowing them to become a leading provider in that niche by catering specifically to the needs and preferences of environmentally-conscious consumers.

II. Advantages & Disadvantages of Focused Marketing Strategy

1. Advantages

One of the standout benefits of a focused marketing strategy is that it allows businesses to easily achieve a strong market position by concentrating resources on a specific area. This enables companies to effectively monopolize their products by thoroughly understanding customer needs and desires.

Additional advantages include:

• Creating Barriers to Entry: By establishing a strong presence in a specific market, companies can create barriers for competing brands trying to enter the same space.

• Bridging the Gap with Customers: A focused strategy helps companies narrow the gap between themselves and their customers, allowing managers to respond swiftly to changes in consumer demand.

• Leveraging Strengths: Concentrating resources on a particular market opens opportunities for businesses to build on and develop their unique strengths, leading to significant revenue generation.

Example

A good example is a luxury skincare brand that focuses solely on high-income consumers. By understanding their target audience’s specific desires, the brand can tailor its products and marketing efforts effectively, thereby dominating that niche.

2. Disadvantages

Despite its benefits, the focused marketing strategy has certain limitations:

• Market Demand Fluctuations: Even though businesses conduct thorough research before committing to a specific market, consumer demands can change rapidly or even disappear, leading to potential failures in the strategy.

• Attention from Major Competitors: Larger companies may begin to notice the potential in the targeted market, and they can leverage their substantial resources to capture the opportunity.

• Higher Production Costs: Larger companies often offer products at lower prices due to economies of scale. By concentrating on a single market segment, smaller businesses may inadvertently miss out on these cost advantages, leading to increased production costs and higher retail prices.

Example

Consider a small coffee shop that specializes in artisanal brews. While it may attract a dedicated customer base, it may struggle to compete with large chains that can offer similar products at lower prices due to their scale of operation.

III. Who Should Apply a Focused Marketing Strategy?

After understanding the advantages and disadvantages of a focused marketing strategy, it’s essential to ask: who should adopt this strategy? How should it be applied?

The focused marketing strategy is particularly suitable for small and medium-sized enterprises (SMEs). Additionally, businesses seeking to establish a comprehensive market presence during their initial entry into a large market can also benefit from this approach.

Example

A local bakery might choose to specialize in gluten-free products, effectively targeting a specific segment of the market. This strategy allows the bakery to establish itself as the go-to place for gluten-free goods, avoiding competition with larger bakeries that offer a wider range of products.

For SMEs, focusing their efforts on a specific market segment helps them avoid fierce competition from larger rivals. This strategy also allows for efficient resource allocation, preventing budget wastage on non-potential markets.

Conversely, businesses looking to gain comprehensive market coverage when entering a large market can test the viability of their offerings. This approach enables them to concentrate on a single goal without incurring significant costs in case of failure.

IV. Successful Case Study of Focused Marketing: Tân Hiệp Phát

Tân Hiệp Phát Co., Ltd. is a company specializing in the production and distribution of beverages and bottled drinks in Vietnam. Some of their notable products include Number One energy drink, Zero Degree green tea, and Dr. Thanh herbal tea.

The company’s success is largely attributed to its well-defined marketing strategy. In December 2008, Tân Hiệp Phát launched Dr. Thanh on a large scale using a focused marketing strategy, positioning it as the first beverage for cooling down and detoxifying the body with nine royal herbs.

Five Focus Areas in Tân Hiệp Phát’s Strategy:

1. Consumer Needs: Tea has been a traditional beverage passed down through generations. For many families, a cup of tea signifies the beginning of conversation. Recognizing that modern lifestyles have made many forget this tradition, Tân Hiệp Phát introduced the portable Dr. Thanh herbal tea, enabling consumers to enjoy tea conveniently.

2. Target Customers: Customers are individuals or organizations directly involved in purchasing or utilizing a company’s products or services. For Dr. Thanh, while the product is for all ages, it targets active individuals who enjoy spicy food and social activities, primarily focusing on young adults aged 22-30 and middle-aged consumers aged 30-50.

3. Communication: Tân Hiệp Phát actively promotes its products through various channels, including print media (flyers, posters, banners), television, radio, outdoor advertising, and online platforms.

4. Product Quality: Dr. Thanh has been reformulated to better suit Vietnamese tastes, offering a wider variety of flavors to cater to different customer preferences.

5. Execution: Tân Hiệp Phát has a professionally trained team that ensures innovative ideas are implemented efficiently, allowing quick market launches. Clearly defined objectives, roles, and responsibilities ensure cohesive teamwork.

Achievements:

Through its focused marketing strategy, Tân Hiệp Phát has effectively utilized its limited resources to develop products rapidly. This has positioned the company as a pioneer in the herbal tea market.

By concentrating on a specific market segment and streamlining unnecessary processes, Tân Hiệp Phát was able to launch its product in just two months, coinciding with the Tết Nguyên Đán (Lunar New Year) holiday when consumer purchasing power surges.

The comprehensive 360-degree communication campaign significantly impacted consumers across multiple media platforms.

V. Common Channels for Implementing Focused Marketing

1. Blog/Website

A blog is a website containing regularly updated information, often presented in chronological order. Blogs can be written by anyone, from individuals to organizations, and typically reflect the author’s subjective views.

Conversely, a website serves to provide information about the company, products, and services. While both forms facilitate customer engagement and conversion, they differ in update frequency, with blogs being more dynamic.

Example

For instance, a fitness coach may use a blog to share workout tips, while their website showcases their services, testimonials, and a booking system for clients.

2. Social Media

Social media encompasses applications or platforms built on the internet that allow users to communicate and share information. Various forms of social media exist, such as photo-sharing sites, instant messaging apps, video-sharing platforms, and podcasts.

Social media marketing offers numerous benefits, such as:

• Increased Customer Reach: Leveraging the vast user base on social platforms allows businesses to find and engage more potential customers.

• Cost-Effective Campaigns: Initiating marketing campaigns on social media platforms is often more budget-friendly than traditional marketing methods.

• Target Audience Insights: Social platforms provide detailed information about target demographics, helping businesses effectively identify and reach their intended audience.

Example

A local restaurant may use Instagram to showcase its dishes and attract food enthusiasts, utilizing the platform’s visual appeal to enhance brand recognition.

3. Influencer Marketing

Influencer marketing involves utilizing social influencers to convey a business’s message to its target audience. Influencers are often seen as experts in their respective fields, making this an effective strategy for influencing consumer purchasing decisions.

Benefits of Influencer Marketing:

• Enhanced Brand Visibility: Collaborating with influencers can significantly boost a brand’s exposure as they introduce products or services to their followers.

• Consumer Trust: Influencers are trusted figures in their domains, and their recommendations often resonate more with audiences than traditional advertisements.

• Improved ROI: Influencer marketing tends to yield a higher return on investment compared to other marketing channels. According to a 2019 study by Mediakix, approximately 50% of marketers reported that influencer marketing delivers a higher ROI than other platforms.

Example

A skincare brand may partner with a beauty influencer who demonstrates how to use their products effectively, enhancing consumer trust and driving sales.

4. Display Advertising

Display advertising attracts target audiences through visual ads on websites and social media platforms, encouraging users to take specific actions, such as making a purchase.

Most display advertising campaigns operate on a cost-per-click (CPC) basis, meaning businesses are charged each time a user clicks on their ad.

Benefits of Display Advertising:

• Cost Efficiency: Display ads provide flexibility in adjusting visuals and messages during the campaign, allowing marketers to optimize performance.

• Measurable Success: Campaign success can be evaluated through various metrics, including impressions, conversion rates, and return on ad spend (ROAS).

Example

An online retailer may use display ads on fashion blogs to target specific demographics, driving traffic to their website.

5. Outdoor Advertising

According to the Outdoor Advertising Association of America, outdoor marketing encompasses any advertising executed outside to promote products or services. Common forms include billboards, bus shelters, taxis, and signage.

Benefits of Outdoor Advertising:

• Increased Visibility: A 2016 Nielsen study indicated that 91% of U.S. residents over 16 encountered outdoor billboards, enhancing brand recognition.

• Budget-Friendly: Compared to traditional print or digital ads