Market View: Death of the mass market

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By John L. Stanton, Contributing Editor

In the July 12 issue of Business Week the cover screams, “The Vanishing Mass Market.” While I have a lot of respect for Business Week, the mass market was gone years ago.

Today, mass marketing involves putting your product on the shelf and going to Mass on Sunday and praying that someone buys it. Marketing cannot be about providing products for the masses because there are no more masses, just many smaller markets that demand to be delighted.

The concept is really quite simple. Consumers are more demanding. They have much more varied tastes and desires and want products that are perfect for them. They won’t compromise and will spend more to get what they want. At the same time, our manufacturing capabilities make possible shorter production runs at lower costs. And we have more targeted media to get the message efficiently and effectively to the right consumers.

The clarion call for target marketing has been around for years, and each year the din gets more difficult to ignore as sales fail to keep pace. My book titled Making Niche Marketing Work: How to Grow Bigger by Acting Smaller came out in 1994. Today in just about every business sector you hear executives talking about target marketing. Some call it precision target marketing, niche marketing or micro marketing, but in every case the objective is the same. The executive tries to define the consumer very carefully so the company can create a product that meets that consumer’s needs better than any other product in the market.
There are no more masses, just many smaller markets
that demand
to be delighted.

Food processors are about in the middle of the group of those who have embraced target marketing. Unfortunately, their retail customers are way behind the ball. The target market for most supermarkets is a consumer with a pulse and a penny. Many supermarkets have made little progress in defining the consumer they wish to pursue. Some food processors have hitched their wagon to Wal-Mart and retailers that have targeted the large lower middle class, but there is more to America than the Wal-Mart customer. It is just harder to delight them, but they will pay more to be delighted.

Look at Procter & Gamble. One might think Tide is a mass-marketed brand. However Tide now comes in 14 different varieties such as Clean Rinse, Deep Clean, liquid laundry, etc. While introducing more varieties, P&G also has cut its network TV advertising by 75% while doubling the expenditures on niche markets such as Hispanics.

My favorite niche marketer is Marriott, which created many different hotel chains with each targeted to a different consumer: from the long-term guest at Residence Inns to the family on a budget at Fairfield Inns to the upscale Ritz Carlton. Goya made a fortune targeting just to Hispanics, while Robert Johnson became one of America’s richest people delighting the African-American consumer.

Even if you manufacture products for a niche market, much of your effort is wasted if you then sell them through a mass-market channel. An analogy would be if the military devoted all its bomb manufacturing to expensive smart bombs, but the Air Force dropped them like dumb carpet bombs. While one can argue about mass marketing versus target marketing, at least everyone in the channel of distribution should be doing the same thing.

Food processors must take some drastic steps to correct this waste of resources. Rather than just giving money to retailers each time they ask for it, manufacturers must “suck it up” and try to help supermarkets enter the 21st century by sharing their knowledge of targeting. I know it won’t be easy. Even though supermarkets are slowly sinking into oblivion, along with department stores and corner drug stores, they think they know it all. But you can’t give up because they serve your ultimate customers.

You must make an effort to offer joint marketing programs, education and training programs and not just more money. We must practice this “tough love.” We all can see the disastrous future for the traditional retailer, while for many food companies this is still the major channel of distribution for their products.

Just look at the quality of the “marketing” done by most supermarket chains. It is generally a full-page ad once a week in the newspaper listing brands and prices plus an in-store flyer listing brands and prices. Where do we see any development of a store’s differential advantage, or reasons why someone should drive past competition and go to this store (besides price)? Look at how the basic tenets of marketing are applied, such as market segmentation and store positioning.

There are riches in niches for everyone, but to get rich everyone must be on the same page. The market battles between worthy competitors are fierce already; why make matters worse by wasting scarce resources? Let’s save our battles for the consumer and her loyalty, and let’s stop the battles within the marketing channel. Or we all will lose.

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