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:

Sales objectives
Sales $     260,000,000
Units        346,666,667

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:

Women 25-39 who are… Census 2013 As a %
White, Non Hispanic          18,239,655 57%
Hispanic (all races)            6,269,285 20%
Black/African American            4,399,217 14%
Asian            2,375,016 7%
All other              545,041 2%
Grand Total      31,828,214  100%

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.

Women 25-39 who are… Census 2013 As a % Gelatin Index Per Capita Consumption As a %
White, Non Hispanic          18,239,655 57%          80          8.7      158,930,197 46%
Hispanic (all races)            6,269,285 20%        158        17.2      107,888,440 31%
Black/African American            4,399,217 14%        115        12.5        55,102,720 16%
Asian            2,375,016 7%          95        10.3        24,574,798 7%
All other              545,041 2%          30          3.3          1,780,944 1%
Grand Total      31,828,214  100%      100       10.9  346,666,667  100%

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.