Market Coverage Strategy Case Study

Question 3: Which type of market coverage strategy should Pepsi/Lipton adopt? Why? How should they position Lipton iced teas and Brooke Bond canned teas?
Market coverage strategy is divided into four sections:

1) Undifferentiated Marketing
When an organization decides to use the undifferentiated marketing (or mass marketing) strategy, its target is what is common in the market, ignoring its segments with different or unique needs. The main aim of the marketing program here is to attract the attention of the largest number of prospective buyers to its products and services.

For most modern marketers, this approach is risky as:
a) It is difficult to develop a product that would appeal to all the market segments and
b) It is not easy to compete

3) Concentrated Marketing
A concentrated marketing (or niche marketing) strategy means that a company would concentrate its marketing efforts towards a large share of a small segment or a niche market. This method is usually used by smaller companies with fewer competitors, or by new comers to get a foothold against aggressive more resourceful competitors, and then develop into broader competitors. It can also be used by some megamarketers as markets change, to develop niche products and grow sales.

This method allows a firm to achieve a strong market position while staying effective by fine-tuning its products, prices, and programs to the needs of its defined segments, and efficient as it targets only aconsumers in the niche market it is addressing through different promotion channels.

However, there is a high risk of targeting just one niche market, as the business might suffer greatly if a larger competitor decides to target the same segment using its great resources, or if a substitute product enters the market with a lower price then the company would suffer tremendously; that’s why companies usually tend to diversify their products and

For example, plasma screens placed in shopping malls are supplied with small cameras embedded within to analyze the shoppers’ gender, age, size, or ethnicity; and ads are shown momentarily according to such analyses.

Usually, when a company looks at which market coverage strategy it will adapt, it considers the following:
a) The company’s resources: when resources are limited, concentrated marketing is its best choice.
b) The degree of product variability: for uniform products such as lemons, undifferentiated marketing is the best option. As for products with multiple variables or designs such as computers, a differentiation or concentration option is a good option.
c) The product’s life-cycle: when a new product is introduced to the market, it is preferred to launch only one version of the product and use undifferentiated or concentrated marketing. As the product life-cycle reaches the maturity stage, differentiated marketing is the best approach.
d) Market variability: undifferentiated marketing is the most plausible approach to be used by companies when their prospective clients have the same tastes, buy the same amounts, and \react to marketing campaigns in the same