"Just tell me what she thinks!" Imagine my surprise when I heard a marketing manager for a Fortune 500 company demand this of his marketing research manager. "Who is this she?" I wondered. I thought perhaps it was a female executive at the company.
It was not. The "she" in this statement was the average American female aged 18 to 49 the target segment the manager's brand.
A few years ago, Strategic Directions Group conducted a national attitudinal segmentation study among consumer marketing executives to determine how they felt about buying marketing services.
Per the study, 21 percent of marketing executives constituted a segment dubbed "mass marketers." These managers, most often found in consumer packaged goods companies, believe that marketing to niches is unprofitable. To facilitate mass media selection, their own target segments were consequently defined in the grossest possible way. The mass marketers are very different from the other four segments in Strategic Directions Group's study that make marketing decisions using target marketing approaches, industry consultants or "seat-of-the-pants" judgments.
The mass marketer segment contracts for 29 percent of all marketing services dollars more than any of the other segments. Most of the research money this segment spends tracks sales using store scanners, explores advertising-related issues and develops new products. Despite the fact they are among the most sophisticated marketing managers, they spend relatively little money on refined target-marketing models.
The products sold by the mass marketer segment are generally characterized as low-cost and high-turn. For this reason, it has been difficult for marketers of these products to justify more precise target marketing. Furthermore, these marketers assume that consumers do not want to form relationships with companies supplying them with soap, hot dogs and instant mashed potatoes.
The mass market is, however, changing. At least two current trends should make those in the mass marketer segment consider a more sophisticated view of their target market: fragmentation of the media and the accelerating growth of niche products.
The growth of cable and satellite channels as competition for network television, as well as specialized publications and the Internet, have produced a more complicated marketing framework for mass marketers. Because of this development, mass marketers are forced to reorient their thinking.
The creative use of media selection to reach more targeted populations can be seen in the following example. Tropicana products sponsored a study by the Cleveland Clinic supporting a claim that drinking two glasses of orange juice per day helps to lower blood pressure. With these results in hand, the company is sponsoring a massive education effort, including the broadcast of a 28-minute program appearing once on CBS and more than 450 times on several cable networks such as Lifetime and A&E. It is true that the target audience for this effort is defined in one word: female. However, the degree to which these media reach females who have a concern about blood pressure and not just females will determine the success of this venture.
Niche marketing is becoming increasingly more important among companies that traditionally practice mass marketing. For example, organic foods account for approximately $5 to $6 billion in retail sales less than one percent of the total food market. This market, however, enjoys double-digit growth annually. This growth has attracted major players such as General Mills which acquired Small Planet Foods, a Washington-based natural food company. In addition to positioning organic products in specialty retailers such as co-ops, we would argue that this developing market is ideal for the use of direct mail coupons to likely interested consumers.
Kraft General Foods has been one of the pioneers in this area. With a huge 30-million-name database begun with the Crystal Lite Lightstyle Club, Kraft targets diet-conscious consumers interested in fitness. Using newsletters, discount coupons and a catalog, they promote not only food products, but watches, mugs, jogging suits and other gear bearing the club logo.
Nestle Carnation uses database marketing to target expectant parents. The Carnation Special Delivery Club sends information to target households beginning as early as eight months before the birth. The company's baby products are promoted through mailed coupons with a reported redemption rate of 24 percent, versus the typical four percent for freestanding inserts (FSIs). In addition, these mailings are used to build awareness and trial of other related products.
The Internet has added a major new dimension to the marketing of mass-market products. Web sites give marketers the ability to interact with millions of previously anonymous customers. In addition to describing products, answering questions and providing interesting content, the Internet gives marketers the ability to identify customers and collect information about them.
Information Resources, Inc. surveyed 7,900 shoppers and discovered that packaged-food companies were overspending on their Web sites in providing features customers didn't want. What consumers wanted was the ability to rate products and get coupons. What they didn't want were games and chat rooms. Half of all shoppers want coupons and free samples, but only 22 percent of Web sites offered them. Although only 38 percent of Web sites ask for feedback, a surprising 74 percent of respondents said they would provide it online.
The vaguely defined "she" of the mass-marketing world is disappearing. Technological changes are forcing new thinking even among those in the mass marketer segment. Adopting new thinking about target marketing will make it possible for those in this segment to exploit the specific needs of small groups and develop increased profit potential.
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