The document discusses the concept of a fragmented market, characterized by a lack of dominant players and competition among small and medium-sized organizations. It highlights both advantages, such as targeted marketing and opportunities for innovation, and disadvantages, including low profit margins and challenges in consistent messaging. Strategies to navigate these challenges include decentralization, hiring local managers, and specializing in specific customer or product types.

1. Fragmented
Market

2. Fragmented Market
• The fragmented market is defined as a marketplace where no single organization has enough influence
to move the industry in a single direction.
• Fragmented market consists of several small and medium organizations that compete with one another
and with large organizations, but there is no one single company that dominates the entire market.
• Businesses generally need to establish a brand reputation that not only resonates throughout the
marketplace but also sets it apart from its competitors. But this becomes difficult in a fragmented
market.
• The basic idea behind the concept of market fragmentation is that every market reflects different buyer
needs and wants, is composed of different segments and responds differently to marketing.
• These multiple sections, that are characteristics of every market, point towards the fragmentation of the
market.

3. Reasons that lead to a fragmented
market
A market gets fragmented because of many reasons. Some of the reasons are:
• The various market needs and wants
• Low level of innovation in products
• No economies of scale
• Strong competition in the market
• Customization of the product is high

4. Advantages of a Fragmented market
ꬸA fragmented market helps businesses reach the right consumers. Based on demographics,
behaviour and interests of the rather consumer, a fragmented market makes it easier for
businesses to target their products to the target consumer. For example, it will be easier for
an Indian take away restaurant, in the fragmented takeaway food industry, to target their end
consumers.
ꬸSince there is no big player in the fragmented market, it implies that consumers have not
given their loyalty to any business and that no standards exist in that market. This implies
that new entrants in the market have enough scope for experimentation and innovation. They
also do not have to fight for market share against a big brand. Thus, they can enter the
market and play according to their own market research and instincts.

5. Advantages of a Fragmented market
ꬸSince the target market size is small, marketing strategies can be personalized in a
fragmented market.
ꬸFragmented market leads to a smaller customer base, which makes it easier for businesses
to target their end consumers more effectively. With the market being small and the absence
of big players, the marketing expense of businesses automatically reduces in a fragmented
market. The marketing is mostly focused on local customers and thus the advertising
expenses are obviously less than when advertising nationwide. The fragmented market also
allows for word-of-mouth publicity as customers in this kind of market are willing to try out
new entities without any reluctance. Rather than wasting marketing resources on a large
audience, businesses can target their marketing activities on a smaller but more relevant
audience. This helps them have a high conversion rate.

6. Advantages of a Fragmented market
ꬸA fragmented market prefers smaller businesses. Thus, it is cost effective for businesses
trying to enter a fragmented market. They do not have to go all out when starting a new
business and rather keep their focus small. Following a neighbourhood approach, rather than
a citywide or nationwide approach, will surely help them market themselves better.
ꬸA fragmented market also gives businesses an opportunity to target consumers that other
business in the industry might have missed. Let us take the example of the Food Take away
industry.

7. Disadvantages of a Fragmented
market
ꬸAs markets fragment, businesses need to be aware of the multiple platforms that can be
used to reach their target consumer and then use these to market themselves. As such, it
becomes important for businesses to keep track of every evolving platform – form Facebook
to Snapchat and others – and proactively use them to reach their consumers.
ꬸIn a fragmented market, businesses need to make sure that their marketing strategies are
consistent, frequent and adapted to the different tones of different mediums. A Facebook
marketing method will surely be different from the one being followed on LinkedIn. This
adaptation to various tones may sometimes become cumbersome for businesses.

8. Disadvantages of a Fragmented
market
ꬸIn a fragmented market, redundancy for messages is a common issue.
ꬸA fragmented market results in businesses having low margins and expensive logistics. They
also have no advantage of size when dealing with suppliers or buyers.

9. Strategies to overcome the challenges
of a fragment market
Some of the ways to overcome the challenges of a fragmented market are:
• Make operations decentralized
• Managers hired should be local
• Firms can become a low-cost producer
• Provide more value-added services to the customer
• Businesses can specialize by customer type or product type
• By focusing on a restricted geographic area
• Increase customer value through vertical integration

10. THANK YOU