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Market Coverage: Definition & Strategy

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  • 0:00 What Is the Market Coverage?
  • 0:39 Market Coverage Strategies
  • 2:14 Importance of Choosing…
  • 3:17 Lesson Summary
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Lesson Transcript
Instructor: Ashley Johns

Ashley has taught college business courses and has a master's degree in management.

The cost of advertising has been known to put a company out of business. It is important to take a look at your goal for market coverage and plan accordingly. This lesson takes a look at the optional strategies and how to implement them.

What Is the Market Coverage?

You have decided to become a business owner but are unsure of the marketing strategy you should use. The goal is to get the name out there and grow the business. Choosing the right way to do this will save you from throwing money away on unnecessary ventures. To start, you must determine your goal for market coverage.

Market coverage is the evaluation of the marketplace and determination of how much of it you should cover with your promotional strategy of a product or business. Companies have to take into account factors like the economy, culture, buyer behavior, etc. Once you understand your product's relationship to each market, you will be able to make the right decision about your market coverage strategy.

Market Coverage Strategies

The audience, or potential customer, determines your marketing strategy. There are three strategies available:

Undifferentiated Marketing

This one has the broadest approach. The goal is to focus on the most common need of consumers. However, there are two options for this approach: pitch one product to all markets or all products to one market.

For example, a beverage company typically takes the same approach for all markets. Wherever you go, you will usually see the same commercials and print advertising. There is little variation in the needs of these potential consumers, thus little need for a variation in promotions.

Differentiated Marketing

This has more of a customized approach. Promotional offers are specialized for each individual target market.

For example, clothing stores have to take into consideration 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 clothing and promotions available to customers at these stores. The culture and weather play into this company's decision making process. Therefore, the company wants to differentiate itself in each market.

Concentrated Marketing

This focuses on a section of the market place. Once the section is chosen, a promotional strategy is put into place to gain the majority market share of that section.

For example, in larger populated areas, real estate agents will often target a particular subdivision or area of the city. The goal is to become the leader in that area. They may send postcards, go door to door, or host block parties to gain exposure.

Importance of Choosing a Strategy

Is it really necessary to choose a strategy? What if you focus your marketing efforts on all products and all markets? Are you likely to lose it all? Probably. It is risky to take an all or nothing approach. The risk could put you out of business in a hurry.

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