Disadvantages of concentrated marketing The downside to concentrated marketing is that it will only resonate with a small target segment. Disadvantages: Requires sophisticated marketing, ignores other areas of the market, can cause problems in future as may make it more difficult for company to expand. When a firm attempts to serve several market segments, there is a proliferation of products. Because small businesses and startups are used to sticking with a single value proposition and brand voice, they may find themselves in a tricky situation when the time comes to expand. Market segmentation suffers from the following disadvantages: (i) Segmentation increases costs. Concentrated marketing is particularly effective for small companies with limited resources because it enables the company to achieve a strong market position in the specific market segment it serves without mass production, … 2. Concentrated Marketing Special Interest Group Special Interest Group (40 members) When you put all eggs in one basket and that basket falls than all your eggs similarly biggest problem with concentration strategy is that there is a lack of diversification and since company is dependent on one product any problem in the demand for product which may be due to change in technology, change in consumer taste, government policy and other factors can result in complete slowdown in sales as well as profits as far as company … Concentrated marketing can be defined as: Concentrating the firm’s market offering solely on the needs of one defined target market. These companies cannot expand after a certain level and need a concentrated efforts for a selected niche. Brand loyalty. 1. Unlike in generalized marketing where market competition is still, niche marketing has quite less competition for the viable customers purchasing the products. This type of marketing can be a great success for those companies who have limited resources. The ones you exclude could offer you many sales, maybe even more sales, than the one you chose. Due to changes in preferences, there is a risk of decrease in effectiveness. Less competition. With differentiated marketing, the firm has multiple market offerings that take into account the differentiation of needs in the marketplace. The Advantages and Disadvantages of Niche Marketing Advantages. Niche marketing makes it possible for businesses to build their brand loyalty. When you choose one market segment, you exclude others. But the main problem of concentrated marketing is that “it is an all-the-eggs-in-one basket” strategy. Concentrated Marketing is a strategy whereby a product is developed and marketed for a very well defined and specific segment of the consumer population. This marketing approach is effective for those companies which are skilled and specialized in manufact… ADVERTISEMENTS: Further, for one product, a company may concentrate so much on one market segment that it … Concentrated Marketing is particularly effective for small companies with limited resources. Cost of production rises due to shorter production runs and product variations.