Rashmi is bored of using the same old anti-dandruff shampoo. Every time she visits the supermarket, she looks for new options. Ultimately, she sees an ad on Instagram about customized, organic shampoos. These are three times as expensive as her current shampoo, but Rashmi is convinced to make the change.

Rashmi is one of the many who comprise a niche market segment in the hair-care industry. These customers are looking for specific solutions and are no longer interested in the products offered by mass producers. To meet the needs of customers like Rashmi, organizations need to first understand the market niche and then develop a focus strategy to capture this market.

But, what exactly is this strategy and how do you tell if it’s suitable for your business? In this piece, we will discuss the meaning of focus strategy, its types and the advantages of focus strategy. With the help of different focus strategy examples, we’ll also come to see its relevance.

 

  1. Meaning Of Focus Strategy

  2. Examples Of Focus Strategy

  3. Advantage Of Focus Strategy

  4. Types Of Focus Strategies

 

Meaning Of Focus Strategy

Focus strategy is essentially a core marketing strategy that allows organizations to identify the specific needs of a niche market and develop products aligned with these needs. The focus remains solely on providing value to customers within this niche market. This strategy is also known as a niche marketing strategy.

When compared to other core strategies, such as mass marketing and differentiated marketing, this strategy drives organizations to focus on a very selective target market and offer them unmatched value. While a mass marketer may make a standard product for everyone in the market, a niche marketer would make a highly customized product for a small group of customers within the same market.

Examples Of Focus Strategy

Let’s go beyond the focus strategy meaning and understand how brands actually adopt it with the help of these focus strategy examples:

  • Pepsi has a diverse product portfolio. Pepsi Black was introduced as part of their focus strategy on customer segments looking for healthier beverages. The product has very low aspartame and higher caffeine content compared to Diet Pepsi and is sold as a zero-calorie variant
  • Bio-oil sells body and face oil that especially caters to pregnant women and new mothers struggling to find solutions for stretch marks and other skin issues
  • SwitchFix Co. sells personal care products such as shampoo bars, bamboo toothbrushes and deodorant sticks in sustainable packaging. These products are focused on a niche market of customers who are environmentally conscious and want to adopt greener products
  • Lefty’s sells products that are specifically designed for left-handed people
  • Beardo is a brand providing beard grooming products for men

 

Advantage Of Focus Strategy

Now, all these focus strategy examples may make you feel that a focus strategy is difficult to execute. After all, if you can make something that can be sold to millions of customers, why wouldn’t you do it? Why would you add features to or customize a simple product just to meet the needs of a smaller segment of customers?

It’s because the key advantage of focus strategy is that it allows an organization to become a dominant player within the niche market—something that’s difficult to do in competitive mass markets unless you’re a cost leader or an innovator. Other advantages of focus strategy allow you to:

 

  • Limit your market universe and focus on being the most preferred brand of a small group of customers
  • Charge a premium price for your customized products and services, which the niche target audience would be happy to pay
  • Build on your strengths and sustainably deliver only the best value to customers
  • Avoid the threats of new market entrants, substitutes and changing customer demands by evolving your product as per niche market needs
  • Maintain geographic or demographic market focus and grow your business with limited capital exposure

 

Types Of Focus Strategies

Given these advantages, an organization can choose to adopt a focus strategy either by offering the same value at a lower price or superior value at a higher price to its customers. This can be done by adopting either of the two types of focus strategies:

 

  1. Low-Cost Focused Strategy

    In this strategy, an organization identifies a micro or geographically-concentrated market. Within this market, all customers having a particular need can be provided with a product that’s designed and delivered at a lower cost than mass marketers. The competition in this case is with cost leaders.

    The organization can save on costs for distribution, transportation and marketing and channel partner margins by controlling these aspects internally. At the same time, raw materials can be locally sourced and the production process can be optimized to bring down product costs. For example, in areas where avocado production is abundant, many niche sellers can produce and sell high-quality guacamole at lower costs than globally distributed brands.

  2. Focused Differentiation Strategy

    In this strategy, an organization doesn’t try to reduce prices. Instead, the focus is on customizing a product and adding specifically sought-out value propositions. The targeted customers can then be encouraged to pay more than they would for standard solutions.

    With this type of focused strategy, niche market segments that are geographically distributed can also be captured. At the same time, the organization can continue to innovate and improve its offerings to match market demands. The competition in this case is with differentiated brands.

A focus strategy can lead businesses to pay keener attention to customer needs and develop solutions that are actually required. For mass producers, after a point, it might become prohibitive to keep expanding the product portfolio. But, for organizations with focus strategy, it’s a great opportunity to capture markets with unmet demands. With Harappa’s Creating Solutions course, you’ll learn about different types of focus strategies and be able to assess the market situation and develop a suitable focus strategy for optimum results. Sign up today!

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