Marketing: Mass is out; niche is in

If you’ve felt a big demographic quake–shake in recent years, you’re not imagining things. We’re in the midst of a huge shift. In certain large metro areas—Chicago, Miami, Los Angeles—minorities (collectively) have become the majority. By 2020, minorities are expected to account for 40% of the U.S. population.

It’s not just our complexion that’s changing. The purchasing and influencing power of diverse age groups—from baby boomers to members of Generation Y—are forcing companies to rethink how they reach all types of consumers.

“These shifts and burgeoning segments signal a new game for marketers. One thing’s clear: It’s not business as usual. Mass marketing is somewhere past its prime,” says Jim Lucas, executive vice president and director of retail insight and strategy for Draftfcb, a global advertising agency.

The Hispanic segment is booming, social and youthful. Too often ignored, brand–loyal, educated black consumers represent low–hanging fruit for marketers. Asians, while making up a smaller piece of the demographic pie, are a rich slice with high incomes and discretionary spending power.

Youthful Gen Y is mobile and hip. They are setting up new households—and need bedding products to do so. This group bears watching as digital trendsetters. They consume new media in new ways. What’s next after Facebook?

Baby boomers, a popular target for mattress makers—are undergoing important changes. Instead of retiring in masses, many are staying on the job longer or returning to part–time work to cope with the shaky economy. As they age and their medical needs increase, they’re keen for sleep products that promise comfort and wellness.

What it all means

How can you best reach these diverse cultural and age groups? Can general branding strategies speak to everyone or should specific cultural messaging be crafted for each group? For answers, BedTimes turned to advertising pros with specific niche expertise.

“Whereas in the last 10 to 15 years, multicultural programs have been considered good options, they are now increasingly being viewed by top corporate executives as business imperatives,” says Saul Gitlin, executive vice president of strategic marketing services and new business at New York–based Kang & Lee Advertising.

Niche marketing works, though some industries and companies are better at it than others. Take McDonald’s, for example. It has won customer loyalty, established brand recognition, increased market penetration and reaped significant return on investment with sophisticated niche marketing strategies, particularly those targeting black consumers.
Let’s look at some key U.S. demographic groups, their needs and wants—and how you might best reach them.

Hispanics

Young and vital, the Hispanic niche offers great potential for mattress marketers. Made up of consumers with origins in dozens of countries, this category may best be viewed as three different groups distinguished by three acculturation levels.

José Villa, president of Los Angeles–based ad agency Sensis, explains: “The ‘Un–acculturated’ are recent arrivals with Spanish as their main language. They represent 52% of the demographic. About 20% of the market is the ‘Middle Acculturated.’ They speak both English and Spanish, though Spanish may be spoken mostly at home. The ‘Fully Acculturated’ make up 30% of the market. They’re fluent in English and English is generally spoken at home.”

Villa continues: “Historically, advertising campaigns targeting Hispanics have been executed in Spanish, but as numbers in the Acculturated group demonstrate significant growth, the focus has shifted from language to more emphasis on lifestyle and cultural insights. In this shift beyond language, an advertiser might sponsor a musical event that features performers avidly followed by the Hispanic population.”

Hispanic households are generally larger—with more children but also because multiple generations are living together—and their purchasing decisions may be driven by constrained budgets, Villa says.
One effective strategy for reaching this group is a loyalty discount or frequent–buyer program.

Typically, value–messaging works. Hispanic decision–makers will pay more for quality that lasts.

“Households are often headed by a strong female who controls the buying,” Villa says. “She wants the best for her family.” Because close family connections are key in Hispanic culture, messaging that promotes strong relationships and family can pay off. This segment, especially Hispanic moms, can be receptive to messages about organic and environmentally sustainable products.

Keep in mind also that the Hispanic consumer, in general, tends to be younger—62% of Hispanics are under the age of 34; 25% are under 18, according to Villa. Targeting this group can create lifetime brand loyalty and a high ROI over time.

Blacks

Broadly targeted marketing efforts often fail to speak successfully to black Americans, according to marketing experts.

“It’s a fallacy to say that America’s a ‘melting pot,’ ” says Al Anderson, chairman and founder of Atlanta–based Anderson Communications, which specializes in marketing to black consumers.

“We’re more like a salad bowl—if a tomato’s in that salad bowl, it’s still a tomato. African–Americans have different aspirations, consume different media and hold different values. Blacks are not dark–skinned white people.”

Context, relevancy and a respect for differences are requisites for creating effective brand messages aimed at blacks.

“Often marketers, in attempting to target the African–American market, just take a general market message and put in a black person or take a radio spot and use a rhythm–and–blues music background and say ‘job done,’ explains Gene Morris, chairman and chief executive officer of E. Morris Communications Inc. in Chicago. “But each of us is the sum total of all of our experiences. The ‘black experience’ is different from a general market experience.”

He continues: “We (African–Americans) tend be critical and highly sensitive to advertising messages. Marketers have to be cautious and aware to avoid patronizing or offending. Testing your messaging and creative is crucial.”

One failed approach Morris has seen marketers take in targeting ethnic groups is creating a “United Nations ad”—jamming a variety of ethnicities and cultures together.

“That doesn’t speak to the unique cultural experiences,” he says.

General media buys can miss the mark, too.

“Black and white audiences don’t watch the same TV programs,” Morris says. “ ‘Seinfeld,’ at its peak, was No. 1 among white audiences—and 129th among blacks. ‘Friends’ ranked high in the general market, but scored low among African–Americans.”

Anderson adds, “Social media has been embraced by African–Americans, who are early adopters. Younger African–Americans use Twitter, Black Planet and Black America Web in large numbers. But radio is the media that reaches better than 94% of urban black audiences.”

One way to reach educated, professional black women is affinity–based marketing through proprietary mailing lists of large black sororities such as Delta Sigma Theta and Alpha Kappa Alpha.

“With more attention being paid to the Hispanic segment, manufacturers can find that the African–American market can be low–hanging fruit ready to harvest,” Morris says. “Look at McDonald’s. They’re the ‘gold standard’ of success in winning and building brand loyalty among African–Americans.”

Asians

Asians make up a small percentage of the U.S. population, but tend to be better educated with higher disposable incomes than some other groups, according to marketing experts.

“Asian–Americans exceed the median household incomes of Hispanic and African–Americans and they’re more than $9,000 ahead of non–Hispanic white households,” Gitlin says.

This segment is often attracted to high–end products with lasting value and brand–name recognition.
“Right now, savvy marketers can fly under the radar in targeting this group,” he says. “The Asian–American market remains largely uncharted territory. Brands can enjoy what may be the last frontier of first–mover advantage, thus establishing a solid position in a market that will inevitably be addressed by all competitors.”

To reach Asians effectively, consider which specific group you’re targeting. Chinese, Korean, Japanese, Vietnamese, Filipinos, etc. Each has different cultural considerations. For instance, many Chinese prefer their advertising messages be in Mandarin—even if they’re fluent in English.

Generation Y

These young trendsetters are sometimes overlooked by marketers of bedding and furniture. That’s a mistake. Members of Gen Y—largely the children of baby boomers who were born from 1982 to 1995—are going off to college, getting married, moving for jobs, setting up households. All those new nests require mattresses, pillows and more.

“This audience wants a relationship with the company and the product. Some may be economically challenged, but if a product meets their ‘spin,’ they’ll buy it. This untapped market is extremely brand loyal,” says Kevin Walker, managing partner of Dallas–based CultureLab, a marketing firm that targets young adults. Apple is one of the companies that has earned this group’s loyalty.

Gen Y drives social media trends, influencing other demographics’ use of media platforms, outlets and technologies. Think Facebook, which was founded and popularized by Gen Yers. Marketers who capture the attention of Gen Y also reap the benefit of “earned media,” as these younger consumers spread the word about their favorite products through tweets, text, links, forums, blogs, etc.

“Learn where Gen Ys lurk, then build a strong social media presence there,” Walker says. “Be authentic in voice. Gen Y wants honesty and has an extreme sense of BS—they can sniff it out. Build a two–way relationship.”

He adds, “This group is very snobby about how things are built and the materials used. (They want to know) the story behind the product—and the company. What makes one mattress more desirable over another? They’ll drill down to the manufacturing process. They want transparency.”

Product attributes that typically resonate with Gen Y: affordable, portable, hip, cool, natural.

Baby boomers

Baby boomers—much studied and marketed to—remain a highly desirable consumer demographic.
“Baby Boomers and older customers are the single largest economic group in America with annual spending power of more than $2 trillion,” says Jim Gilmartin, president of Wheaton, Ill.–based Coming of Age, an agency that targets the demographic.

However, the recession has taken a toll on boomers. Faced with shrinking stock portfolios, retirement savings and home valuations, many older workers are postponing retirement or returning to the job market after an initial retirement. For the first time, working seniors outnumber teens in the labor force, according to the U.S. Bureau of Labor Statistics. By 2018, it’s predicted that 22% of older workers will continue to work beyond the typical retirement age.

“Boomers expect value for their money. They do careful research before they spend. They’re more responsive to ‘companies with a conscience’ than younger customers,” Gilmartin says. “And they’re very attentive to warranty issues and a company’s reputation in honoring its warranties.”

Boomers may want value, but they are likely to tune out litanies of product features and benefits, Gilmartin says.

“All of us have basic values and motivators that drive us, but we manifest them differently as we move through life,” he says. “Focusing on product features and benefits often results in a losing strategy. Emotions drive boomers in their purchase decisions.”

Storytelling works well with this demographic.

“Be vulnerable, honest and open about who you really are,” Gilmartin says. “Whoever tells the best story wins.”

Don’t discount boomers use of social media, the experts say. Consumers age 50 and older go online more frequently for news than those under 20 and more than 90% of older consumers use the Internet to research products prior to purchase.

Other things to consider when targeting boomers:

  • Avoid hyperbole Boomers have lived long enough to know hype when they see it. They want unadorned facts—and more of them. Goods and services must perform as advertised. Boomers put a lot of faith in word–of–mouth referrals.
  • Be careful with imagery A 60–year–old boomer sees her 40–something self when she looks in the mirror. Avoid images of elderly consumers in favor of people in middle age when selling to seniors. Likewise, avoid the words “senior,” “baby boomer” or “boomer” in text. Treat older consumers as individuals.

The media & the message

Today’s media landscape is dizzying—print, direct, outdoor, broadcast, radio, transit, storefront/in–store, banner ads, pay–per–click, social media, mobile electronic devices. Part of niche marketing is choosing the right media for your message.

Social media is popular with virtually all niches. Right now, Facebook tops the social media sites visited by Asians (57%), Hispanics (54%), blacks (48%) and whites (43%). Users often raise their hands and self–identify themselves—this helps advertisers target their message.

But traditional marketing still pays off and an integrated campaign across an array of media is probably the best bet for success.

A smart strategy may be to tap the expertise of segment specialists like the ones BedTimes interviewed to help craft a media program that zeros in on your targets.

When all is said and done, it’s the relevant message, in the right language, placed in the right media that wins—just as it always has.

The gold standard for niche marketing: The Golden Arches

Praised by the advertising agencies BedTimes interviewed for its successful outreach to black consumers, we took a closer look at how McDonald’s has made a commitment to the segment and achieved significant market penetration.

McDonald’s isn’t shy about its efforts, which it explains on a micro–website, 365Black.com: “At McDonald’s, we believe that African–American culture and achievement should be celebrated 365 days a year—not just during Black History Month. That’s the idea behind 365Black.com. It’s a place where you can learn more about education, employment, career advancement and entrepreneurship opportunities, and meet real people whose lives have been touched by McDonald’s. Plus, you can also have a chance to win exciting once–in–a–lifetime opportunities. So make sure you visit often—you just might get inspired.”

As the website indicates, McDonald’s efforts to reach black consumers go beyond TV commercials, radio spots or viral videos aimed at the segment. The fast food giant has created scholarships, promotes black–owned stores and relationships with black suppliers, and sponsors events, such as awards programs, sporting events and concerts, that appeal specifically to its black customers.

Learn more

  • www.multicultural.com/experts The website of Multicultural Marketing Resources Inc., a New York–based marketing, advertising, publishing and consulting firm. A source for articles and other information to help you market to a variety of ethnic and other niche markets.
  • www.strategicmarketsegmentation.com Blog on marketing by Linda P. Morton, a public relations professional and professor emeritus at the University of Oklahoma.
  • www.thinkmulticultural.com Blog on multiculturalism by José Villa, president of Los Angeles–based ad agency Sensis.
  • “Black Is the New Green: Marketing to Affluent African–Americans” by Leonard E. Burnett Jr. and Andrea Hoffman; Palgrave Macmillian
  • “Boomer Consumer: Ten New Rules for Marketing to America’s Largest, Wealthiest and Most Influential Group” by Matt Thornhill and John Martin; LINX Corp.
  • “Market Smart: The Best in Age & Lifestyle Specific Design” by Jim Gilmartin, David Bonner, Daniel Acuff and Dave Siegel; HarperCollins Publishers
  • “Marketing to Hispanics: A Strategic Approach to Assessing and Planning Your Initiative” by Terry Soto; Kaplan Publishing
  • “The Mature Mind: The Positive Power of the Aging Brain” by Gene D. Cohen; Basic Books
  • “Prime Time Women: How to Win the Hearts, Minds and Business of Boomer Big Spenders” by Martha Barletta; Kaplan Publishing

Patricia Frank, a former advertising executive, reports on trends and lifestyle topics. She can be reached at [email protected]

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