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Home » Marketing » Definition of Market Aggregation – What Is Market Aggregation?

Definition of Market Aggregation – What Is Market Aggregation?

May 31, 2019 | By Hitesh Bhasin | Filed Under: Marketing

The term ‘market aggregation’ is used to refer to that marketing process in which a particular product or service is marketed to a large set of audiences or consumers, having the similar kind of needs and demands thus, giving a heavy brand exposure. Market aggregation is also known as ‘mass marketing’ or ‘undifferentiated marketing.

Table of Contents

  • Definition
  • Where is Market aggregation used?
  • Market aggregation Examples
    • What are various ways in which the market aggregation can be done?
  • Benefits of market aggregation
  • Disadvantages of market aggregation

Definition

Market aggregation is a marketing strategy in which marketing is done to a mass number of people belonging to the same segment of demographics having similar kinds of needs and wants.

In this type of marketing, certain standardized products or services are marketed to a large number of consumers that out there want to purchase that product or service so that they can satisfy their needs.  Hence it is also given the name ‘mass marketing’.

The market aggregations are often referred to as a form of differentiated marketing. This is because, in such type of marketing process, only a particular segment of customers is targeted who are having the same kind demands.

But this is also known as the ‘mass marketing’ because although only a certain sector of the entire demographics is targeted, this segments in itself are quite large and contain a large number of people hoping to buy the same kind of products or services.  Also, the marketers who are into this market aggregation try to approach to such segments which have a large number of people so that they can target all of these people and convince them into buying their products or sales revenue.

This way when they target such a large number of people at the same time, they can convert a maximum of their audience or their consumers into potential buyers and this way they can increase their sale revenue and hence their profit margin.

Thus in the market aggregation, the marketers adopt such a strategy in which all of their consumers are handled in quite a homogeneous manner, irrespective of anything else. The only thing that they keep in mind here is that the sector of the demographics that they are going to approach to have the same kind of demands and that they are looking for the similar type of products.

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Also, the market aggregation leads to a reduced cost in many things. It leads to a reduced cost of marketing, reduced cost of manufacturing and even a reduced cost to the customers.  Now usually the strategy of the market aggregation is used to market those products that are often the necessities of the people like sugar, toothpaste, etc.

Where is Market aggregation used?

market aggregation - 2

Market aggregation is used in many different fields. There are so many products out there in the market that come in the everyday use of the consumers and thus are high in demand by a wide segment of the demographics.

There are a few products that are marketed daily using the strategy of market aggregation like the sugar, gasoline, rubber bands, services that offer dry cleaning and many other similar things are there that come in everyday use.

Now there is a reason why in these sectors, marketing aggregation works out. This is because these types of products are such that are perceived by a large number of people in the same manner, irrespective of the company that is selling those products.

Thus for example, if there are products like sugar, then almost every consumer will need it, and they will buy it irrespective of which company it belongs to if and only if marketing is done in the right manner. Thus these types of products are generally sold by adopting the strategy of market aggregation.

Therefore, whenever the businesses employ mass marketing campaigns, then the companies try to market a large number of their products and services over the long term of duration.

Market aggregation Examples

The process of the market aggregation in itself is a combination of various subsets of the marketing technique that is being used.  One of those subsets of the market aggregation is the products differentiation. This is quite an essential aspect of the market aggregation which is used by all the markets to make their products stand out in the market.

To make this possible, marketers use the differentiating technique which helps them prove that their product is better than those of their rival selling a similar kind of product to the consumers.

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Let us consider an example to understand this. Suppose that there is any company name ABC that sells towels.  Now while selling these towels, what they do is that when the manufacturing of those towels is going on, the company embroiders the name of their company into all of those fabrics. This will help the consumers in realizing the brand.

According to one recent study it was found out that, when the customers can recognize a brand more than the other, the brand value of that company automatically rises. This way, over a certain period of time, the consumers start to recognize that particular brand more valuable than the others.

This way the brand superiority increasing which then, in turn, leads to establishing that particular company firmly in the competitive market.

What are various ways in which the market aggregation can be done?

Now the market aggregation generally refers to that approach of marketing in which a large group of customers is sold the similar kind of products.  But there can be other meanings of the market approach as well.  In some cases, the market aggregation may refer to that aspect of marketing in which it can be possible that a large number of products are marketed to individual customers.

This way there are two different spectra of market aggregation. Thus market aggregation can be carried out into two different ways, in the first method; one single product is market to a mass number of people. While in the second method a large number of the products are marketed to one single individual in whole they can see a potential buyer of the future.

Benefits of market aggregation

There are a lot of benefits of market aggregation. So of those benefits are as follows-

  1. It reduces the production cost and the marketing cost which leads to the reduction in the costs to customers.
  2. It is an excellent way for companies to enhance product differentiation. This is because with the help of the product differentiation they are able to make their product stand out in the market. They can differentiate their product from the other similar products that are there in the market which are produced by their rival companies.
  3. Also due to the products differentiation, it helps the companies in realizing one brand to be superiors over the other. This helps the companies to maintain a good relationship with their consumers and also to maintain a loyal consumer base.
  4. Another advantage of the market aggregation is that since in this a more extensive section of people are targeted the companies get the opportunity to promote their products and brands in a broader market and hence giving them a lot of opportunities.
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Disadvantages of market aggregation

Even though market aggregation provides with s many benefits to the companies, there still are some of the disadvantages which can’t be ignored. Some of these disadvantages are as follows-

  1. First of all the strategy of the market aggregation lacks product diversity. This means that while promoting a particular type of a product or a service to a certain group of people, no other products or services are promoted. This means that the only focus is on one particular product there is no diversification in the marketing.
  2. And the other disadvantage is that the strategy of the marketing aggregation comes with the inability of the markets to be able to identify the actual needs of some specific group of customers.
  3. Also one of the significant disadvantages of the market aggregation is that when the products are marketed to the ass number of people belonging to one particular group having similar needs and wants, this then gives the other rivals in the market an opportunity to market their products to the one individual segments.
  4. Also in the mass aggregation, the companies can only satisfy the needs and want of one particular group of people. And they can’t go on meeting the needs of the of every single individual out there.

Thus the market aggregation is quite a good marketing technique that is used for marketing a particular product to a particular segment of the demographics in order to maximize the sales of the products and hence the profitability.

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About Hitesh Bhasin

Hi, I am an MBA and the CEO of Marketing91. I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. Business is my passion and i have established myself in multiple industries with a focus on sustainable growth. You will generally find me online at the Marketing91 Academy.

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Comments

  1. Oscar Martínez says

    Muchas gracias por su contribución para mis clases de negocios para mis estudiantes de grado 4° de primaria.

    Reply

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