What is Market Coverage?
Market coverage is the practice of reaching out to potential customers via various distribution channels and marketing initiatives. It entails creating a thorough plan to market and sell a company’s products or services.
The study of the market and the determination of how much of it should be covered by a promotional strategy is known as market coverage. It entails considering elements such as the economy, culture, buyer behavior, and more. So in simple termswe can say that market coverage means to the extent to which a company’s marketing efforts try to reach its target demographic. The purpose of market coverage is to reach as many potential consumers as possible and sell as many goods/services as possible to these customers.
Why is Market Coverage Important?
Market coverage is important, as it provides the basis for formulating a market strategy and plan. It helps businesses meet the exact needs of their target consumers, spread operations across the market, and determine how much of the marketplace should be covered with a promotional strategy. There are three types of target market coverage that every marketing manager should know: intensive distribution, selective distribution, and exclusive distribution.
- It helps them to reach their target market and increase revenues.
- Companies may boost brand awareness, customer loyalty, and income by reaching a wider range of possible customers.
- It can help companies in identifying new market opportunities and staying ahead of the competition.
Types of Market Coverage Strategies
1. Mass Market Coverage
Mass market coverage is a strategy that aims to reach as many potential customers as possible, without focusing on specific target markets. This strategy is often used by companies. That sell products or services with a broad appeal, such as fast food chains or department stores.
Example: McDonald’s is an example of a firm that employs mass market coverage. Without focusing on specific target markets, the fast food business tries to reach as many potential customers as possible.
2. Niche Market Coverage
Niche market coverage is a strategy that focuses on specific target markets. Companies that use this strategy then aim to reach a smaller, but more defined, target market with specialized products or services. For example, a company that sells organic food products would use specific market coverage.
Example: Whole Foods is a company that uses niche market coverage. The grocery chain specializes in organic and natural food products and aims to reach a smaller, but more defined, target market.
3. Segmented Market Coverage
Segmented market coverage is a strategy that involves targeting specific segments within a larger market. This strategy is often used by companies that sell products or services with a wider appeal but want to reach specific segments of the market, such as age groups or geographic regions.
Example: Nike is a company that uses segmented market coverage. The athletic wear company targets specific segments within the larger market, such as age groups or geographic regions, with its products.
4. Concentrated Marketing
Concentrated marketing, also known as niche marketing, involves targeting a specific segment of the market and tailoring the marketing efforts to that segment.
For example, IT and tech training centers may offer only the service of teaching computer skills to tech professionals and IT students. This approach allows the company to focus its resources on a specific target audience, increasing the chances of success.
5. Undifferentiated Marketing
Undifferentiated marketing involves developing a product that is suitable for almost the whole market but with distinct qualities that make it unique.
For example, toothpaste is a product that is suitable for almost the whole market, but different brands have distinct qualities such as flavor, color, size, support, warranty, and more, that sets them apart from each other.
6. Differentiated Marketing
Differentiated marketing involves creating separate marketing efforts for different segments of the market. We can say that Differentiated marketing is a strategy where companies create campaigns targeting two or more market segments or customer groups.
It involves creating many campaigns that demand different segments of buyers and audiences with individualized messaging. The advantages of differentiated marketing include increased customer loyalty, improved brand recognition, and better ROI. It should be distinguished from concentrated marketing, which focuses on one target audience.
For example, clothing stores may have to consider the market they are in. A company may have a store in both Miami, FL, and New York, NY. It is likely that there will be different marketing efforts for each location to cater to the specific preferences of the target audience in each location.
How to choose a good Marketing Coverage Strategies
When choosing a market coverage strategy, there are several factors that you need to keep in mind. Let’s take a look at each of these in more detail:
- Company Resources
- Degree of Product Variability
- Product Life Cycle
- Market Variability
- Competitor Strategies
One of the first things you need to consider is the resources that your company has available. If your company has limited resources, then a concentrated marketing strategy is usually the best choice. On the other hand, if you have more resources available, you may be able to use a more extensive marketing approach.
Degree of Product Variability
Another important factor is the degree of product variability. If your products are uniform, like sugar or diesel, then an undifferentiated marketing strategy may be the most appropriate. However, if your products can vary in design, like furniture or apparel, then a differentiated or concentrated marketing strategy may be a better fit.
Product Life Cycle
The stage of your product’s life cycle is also important to consider. At the introduction stage, it’s best to have just one version of your product, and a concentrated or undifferentiated marketing strategy is the most practical. However, as your product matures, a differentiated marketing strategy may be more effective.
It’s also important to consider the variability of your target market. If most of your buyers have similar tastes, purchase sizes, and reactions to marketing efforts, then an undifferentiated marketing strategy may be the best choice. However, if your buyers have more varied needs, a differentiated marketing strategy may be more effective.
Finally, it’s important to consider what your competitors are doing. If your competitors are using segmentation in their marketing efforts, then an undifferentiated marketing strategy may not be the best choice.
Putting It All Together
So, how do you put all of these factors together to choose the right market coverage strategy for your company? Here’s a summary of what you need to keep in mind:
- If you have limited resources, a concentrated marketing strategy is usually the best
- If your products are uniform, an undifferentiated marketing strategy may be appropriate
- At the introduction stage of your product’s life cycle, a concentrated or undifferentiated marketing strategy is usually best
- If your target market is consistent, an undifferentiated marketing strategy may be best
- If your competitors are using segmentation, an undifferentiated marketing strategy may not be the best choice