Lessons in Small Business Marketing Decision Making

Part I: Total Market Confusion: Understanding what the total market really means

Editors note: this is part 1 of a 2 part series on Lessons small and medium sized business can learn about Total Market marketing planning and decision making

It is always hard to start an article like this. On the one hand, you want to avoid sounding old, but, honestly, the entire concept behind “Total Market” is not that new. Major advertisers have always looked at the “total” market and we have dozens of tools to do just that. On the other hand, you also want to avoid sounding peevish but, honestly, what is so new about being aware of the total market? And, finally, there is the inevitable confusion. I think every agency guy has his/her own take on what “Total Market” is.

What is the Total Market?

My two cents:

If I were a client and someone said “total market” marketing to me, I could only think of one thing: This agency is prepared to address every consumer and potential consumer segment in order to drive my sales. Notice I didn’t say “Hispanic” or “Asian” or “White non-Hispanic” or “acculturated Hispanic”… I said, every segment. But it is either pointless or irremediably naïve to think that a “total market” marketing strategy would not include some or all ethnic groups… is just needs to grow beyond pure ethnicity and into consumer segmentation.

Let’s examine a “Total Market” exercise and see where it leads

Let’s say you were Jello and were marketing a brand new dessert. This one is a mix of gelatin and cake. It comes in a box, costs $0.75 and mysteriously creates a beautiful mix of gelatin on top and cake on the bottom from just powder.

Step one: Using my “Theory of Everything ©” strategic planning methodology first look your business or client’s business sales objectives:

So I want to sell 346.7 million units this year or, essentially, 1 per person.

Step 2: Determine who is going to actually buy our Gelating+Cake Dessert (call G+C).

1. Most likely the buyer will be female (G+C will be sold only in supermarkets)
2. Most likely the woman will be young (young kids liked G+C in our tests)

Our first filter will be Women, 25-39, as the core market.

Looking at Ethnicity (and totally ignoring geographical concerns such as consumption indices, distribution, etc), we have:

In looking at this, we then need to sell 346.7 million units to 31.8 million women or, basically, 11 units/year per women.

Step 3: Look at consumption indices: who buys more gelatin? Who buys less? And we would then lay in the expected consumption.

So now we see that both, the Hispanic and Black/African American markets are very important. They represent only 34% of all women 25-39 they represent 47% of the total gelatin consumption.

Step 4: A quick check as to which groups get what investment.

Ready For Market Planning and Decision Making

Based on this process you have a few strategic decisions:

• Gelatin consumption is driven by two factors: price/income and novelty

o   Hispanics and Black/AA make less than White non-hispanics, so they will be better gelatin consumers

o   We will need to develop novelties for all 4 quarters to keep the product growing into a cash cow

• 12% of all Hispanics are in our target (women 25-39), they are a large group (17% of the population and 20% of the women in our target), so they get an investment budget.
• 11% of all Black/AA are also in our target, they are a large group (12% of the population) but are not as large as Hispanics (at 14% of our target), so they will get a budget, but it will not be an “investment” budget, but probably a maintenance-level budget.
• Finally, white non-Hispanics, while indexing low on all counts, still will represent 46% of our consumption, so they get a “large/maintenance” budget.

Marketing Decisions Based on What the Data Suggests

I have purposely avoided the issue of “acculturated” vs “non-acculturated” Hispanics to avoid more complexity, but it is easy enough to factor those, too, in the equation.

As a result of this “Total Market” approach, I would be dedicating 35% of the budget to White Non-Hispanics, 47% to Hispanics and 18% to African Americans. I would probably decide against any specific advertising against Asians (small grow, medium index) and all others (no influence on sales whatsoever).

Once you have identified and segmented your Total Market you have to develop your Total market strategy. Stay tuned for lesson 2, Developing a Total Marketing Strategy That Targets your Market Segments

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Theory of Everything

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