Advantages and Disadvantages of Undifferentiated Marketing

Niche marketing and mass customization have resulted in a very fragmented marketplace in which customers expect to be accommodated on their every preference. By contrast, undifferentiated marketing, sometimes called mass marketing, seeks to create a single, standardized product and a single, universally appealing campaign. Although this style of mass marketing is long past its prime, it may have significant advantages if properly applied.

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Advantages of undifferentiated marketing include reaching a broad market and cutting costs. Downsides include vulnerability to market changes and the fact some customers may not seek to become loyal to a specific brand.

Undifferentiated marketing treats the market as a homogeneous entity, focusing on what is common instead of pursuing differences. Its monolithic mass-communication campaigns are usually focused on a narrow product range. Undifferentiated marketing campaigns tend to use a limited number of key messages designed to appeal to a broad number of consumers.

An example of when companies may choose an undifferentiated product strategy is for marketing common food products such as canned vegetables, bread or orange juice. In these cases, the main focus is to give a positive impression that makes customers choose the company's brand instead of the other options out there.

Undifferentiated marketing came to prominence concurrently with the emergence of mass production in the late 19th and early 20th century, as factories specialized in building large quantities of a single, undifferentiated product. Advances in mass media during the same period contributed to the spread of undifferentiated mass marketing. Henry Ford famously used to tell automobile customers they could have their Model T painted any color they wanted, as long as it was black, summarizing the ethos of undifferentiated marketing.

By focusing all the available resources in a single campaign and a limited line of products, a very large market is reached, and significant economies of scale can be achieved, leading to cost leadership. Because there is a very definite message and a very focused branding effort, the brand image is reinforced in the mind of the public. In addition, undifferentiated marketing campaigns come with lower costs for advertising and marketing due to their broad focus, thus saving even more money.

For example, a company like Colgate that sells a widely used household product like toothpaste benefit from a successful undifferentiated targeting strategy. The conjunction of cost leadership and a strong image for such a company can create a large barrier to market entry, discouraging competitors.

As undifferentiated marketing strategies put all their metaphorical eggs in one proverbial basket, and they are therefore inherently vulnerable to changes in the marketing environment. Besides, customers have few reasons for developing loyalty to an undifferentiated product, leading to reduced margins as costs must be kept low to prevent customers from switching brands. For example, customers who buy whatever brands of eggs are on sale might not feel strongly enough to become loyal to a specific brand of egg.

Even then, firms that try to satisfy everyone in the market with one standard product may be challenged by competitors focused on delighting a smaller segment of the population. Overall, the drawbacks of undifferentiated marketing tend to overshadow its advantages, and this approach is frequently reserved for truly “undifferentiated” products such as sugar, flour, salt and milk.