Disaggregation, or differentiated marketing, involves segmenting a market into distinct groups. For example, a company might design several different versions of a product, customizing each to suit the needs of a particular segment of the overall market. This way, the company will be able to market each product to a group that is likely to buy it, increasing the company’s chances of financial success.
Aggregation, or undifferentiated marketing, is the opposite market strategy. Instead of segmenting the market into various groups, aggregation involves treating all consumers as if they are the same. With an aggregation approach, a company might create a single type of product, for example, and then use mass-market advertising to deliver a single sales message to the entire market. The advantage of aggregation is that it is relatively straightforward. The company chooses one marketing strategy and uses it exclusively, rather than designing and implementing many different strategies. The disadvantage is that one simple strategy might not be as effective as a multi-pronged approach, such as disaggregation offers.
The major advantage of disaggregation is it allows a company to selectively target meaningfully different groups, thus increasing its potential sales. For instance, if a bakery creates a variety of cakes for different consumer groups -- say, gluten-free for one group, sugar-free for another and fat-free for a third -- it can fulfill the very different needs of its customers. In contrast, a single type of cake might not satisfy any group.
Disaggregation does have potential disadvantages. First, if a company doesn’t segment consumers correctly, its ensuing marketing campaigns might be worthless. Suppose, for instance, that a tax-preparation service markets its services according to different pricing tiers, based on income. If nearly all its customers are in the same income bracket, the tiered pricing structure has little marketing value. The company instead should have identified segmentation factors that allow it to divide its customers into several distinct groups for targeting.
Another potential disadvantage of disaggregation is it can be costly. To divide consumers into meaningful groups, a company needs data, such as what customer surveys and focus groups can offer. Once a company learns, for example, the various buying preferences of its target market, then it can categorize buyers into different segments. But such market research can be expensive, especially if a company lacks expertise and needs to hire a market research firm.
