Final answer:
Retailers using concentrated marketing focus on specific customer segments to tailor unique strategies for those niches. They often use differentiated products to appeal to the particular preferences of these segments, thereby creating a diverse market and avoiding perfect competition.
Step-by-step explanation:
When retailers identify specific customer segments and develop unique strategies to meet the desires of these segments, they are using Concentrated Marketing. This approach is focused on selecting a narrow customer segment and crafting marketing strategies specifically designed for that segment.
It stands in contrast to other strategies, such as Mass Marketing, which targets a broad audience, Undifferentiated Marketing, which does not differentiate between market segments, and Differentiated Marketing, where a company targets multiple market segments with different strategies for each. A company employing concentrated marketing might leverage differentiated products to cater to the unique needs and preferences of their chosen segment.
Differentiated products are those that stand out due to their physical aspects, location from which they are sold, intangible aspects, or the perceptions they carry. This helps create a variety in the marketplace and is essential for monopolistic competition, as it pulls away from perfect competition by offering consumers more choices that are tailored to specific needs.