What Holes Does Your Marketing Ignore?
As marketing professionals, we are often so focused on tomorrow that we forget there are more tomorrows after that. We concentrate on quarterly results, monthly forecasts, daily sales/churn, and other metrics, but we rarely plan outside our comfort zone. Uncertainty is not in our playbook.
However, the best business leaders know to step back and look outside their own world to gain a better understanding of it. Despite the immediate demands of our jobs, marketing folks benefit from the same concept.
A Case Study
A marketing manager of an up-and-coming probiotic yogurt brand reports to his manager in Denver on a dozen products he sells in Southern California. He spends half his time studying the market in Southern California and working with retailers to set up coupons and discounts. The other half of his time is devoted to working with distributors and a small ad agency to push the products. He works 17-hour days and only manages to grow the market share by about 2 percent a year in this hyper-competitive market.
Worried about his job, he takes a two-week vacation to Austin to make sure his wife doesn’t divorce him. While in Austin, he realizes that grocery stores — even in the wealthiest neighborhoods — offer no probiotic yogurt. The market is saturated in Southern California, but in Austin, there’s no competition.
He convinces management to do a test run in Austin, and within six months, sales of the brand double. Most of the growth comes from the Austin market, unaided by coupons or discounts.
The only way the marketing manager would have ever seen this opportunity was by taking his blinders off.
Benefits to Targeting a Group
There are roughly 300 million consumers in the United States. Half of them are Caucasian, and the other half are “multicultural”: Hispanic, African-American, Asian, Middle Eastern, etc. When companies target “the general population,” they only hit the Caucasian half of the population.
One way to step out of the marketing comfort zone is to focus on one of these smaller groups. There are plenty of benefits to focusing on one multicultural or international segment:
- The ability to build strong loyalty within a group that is often ignored, making it less competitive. Companies like WDT and Master Call built multimillion-dollar businesses by catering to the Russian-American communities in New York, Miami, Chicago, and Los Angeles.
- Low cost per reach. Thanks to word-of-mouth marketing in these tight-knit communities, companies can spend less on actual marketing. Companies like Goya and Hennessy quickly figured this out, even within the well-established Hispanic and African-American communities.
- Rapid response and feedback. Marketing to smaller groups allows companies to receive quick feedback on their products. This can help with a broader U.S. campaign or when launching overseas.
How to Target a Group
After determining a new demographic, companies should look into the psychographics of the target audience. Determine what — besides age, sex, and income — drives those consumers to make a purchase. In “The Power of Habit,” Charles Duhigg argues that cues and rewards create a habit consumers gladly repeat. Understanding those cues is vital to marketing to a specific group.
- Use Maslow’s hierarchy of needs to determine whether you provide for a group’s basic needs or will have your product perceived as a luxury.
- Learn how circles of influence work in your target market. It’s not only who buys your product that matters, but it’s also who helps them make that decision that you need to cater to.
- Test and validate. Simple A-B testing will compare the results of not marketing to a particular demographic against those from running a test campaign. This way, you can build a case for management and avoid expensive mistakes.
There comes a point when every marketing professional has to think outside his or her comfort zone. Like the yogurt manager, you could luck into a new market.
It’s far more likely, though, that you’ll need to think strategically about other demographics and markets in which to grow your sales. If you have the foresight to find an unsaturated, multicultural market that will love your product, you — and your company — will be golden.