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What is the definition of "market aggregation"?

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Quick Answer

"Market aggregation" is defined as the marketing of standardized goods and services to a large population of people that have similar needs, according to Inc. Another name for market aggregation is "mass marketing," a strategy that treats all customers as a single group that is handled homogeneously.

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Many products with everyday use are marketed in this way, including gasoline, sugar, rubber bands and dry cleaning services. Inc. explains that the reason why market aggregation works is because large numbers of people perceive the product as the same no matter what company provides the product. Market aggregation reduces production and marketing costs, thereby reducing costs to consumers. When companies have large production runs over the long term, consumers may have more value for their money when businesses employ mass marketing campaigns.

One subset of market aggregation is product differentiation. Companies use this strategy to differentiate their product from other companies' products that are exactly the same. An example is when a towel manufacturer embroiders the name of a business into the fabric, according to Inc. Product differentiation is most effective when consumers recognize and perceive one brand as superior over another.

Market aggregation is one end of the marketing spectrum that ranges from offering one product to many people versus a different product designed specifically for one person. Inc. reveals the disadvantages to mass marketing include lack of product diversity and inability to identify needs of specific groups of customers.

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