is heavily promoted, like the coffee category, a large segment of the population becomes trained to purchase only when the price is reduced.
The Meaningful Marketing challenge is to find ways to convert the price switchers into deeper and more loyal customers. This requires customers to first notice and then value our Meaningful points of difference.
PRACTICAL IDEAS
Be Relentless in Articulating Your Differences: In the face of perpetual discounting, you must become relentless in articulating what makes your product offering unique. Communicate your distinctiveness even when articulating price discounts. Through continuous communication, you will eventually build awareness that your offering delivers value, not just low price. You won’t reduce the need for discounts totally. However, even a small shift can create a big improvement in your bottom-line profits.
Leverage Customer Purchase Cycles: Understand the purchasing cycles of your customers. Arrange your follow-up e-mail, direct mail, and personal contacts to maximize your chances of making connections just before a new purchase is required. As you’re planning, don’t be shy about directly asking your customers when they anticipate making another purchase.
Segment Your Offerings for Extreme Differences: Challenge yourself to strip your offering to the absolute lowest possible cost. Consider the unthinkable: Eliminate packaging, options, variations, and “nice” extras. Focus this stripped-down version on those customers motivated by price alone.
Push your offering to the ultimate in service. Provide added value to those customer segments that value Meaningful differences.
Use Endorsements to Talk of Differences: Use endorsements to articulate the dramatic differences that customers have experienced as a result of switching to your offering. Better yet, leverage testimonials that speak of the value customers have received from repeated use of your product or service.
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ADVICE
IF MEGA-GROWTH IS YOUR GOAL, TAP THE FOUR CORE FUTURE GROWTH OPPORTUNITIES—WOMEN, GEEZERS, CHINA, AND INDIA
The world economy is changing, and trillions of dollars are at stake.
WOMEN are vastly under-marketed to. Do the math. Women are responsible for 83 percent of consumer purchases, 91 percent of all new homes, 90 percent of cars, and 80 percent of do-it-yourself home projects. Women write 80 percent of all checks and actually own 53 percent of all stock in America!
GEEZERS or Baby Boomers represent a seismic shift. Do the math. Today, geezers control 70 percent of all wealth and account for 50 percent of all discretionary spending. And this is just the beginning. In the future they will be even more important. By 2010, the number of people 18 to 44 will have declined by 1 percent. The number of Americans who are 55-plus will increase by 21 percent. The number between 55 and 66 will increase 64 percent.
CHINA & INDIA. These two markets are about to take over the world. From a human capital standpoint, India has 3.6 times more consumers, and China has 4.4 times more consumers than the United States. Together China and India have a population EIGHT TIMES BIGGER THAN THE UNITED STATES! Most importantly, both countries are making massive investments in education. And education is the fundamental driver of genuine economic growth. For example, Roosevelt’s GI Bill of Rights in 1944 made it possible for 8 million World War II veterans to attend college. For the first time, the idea that education was only for the elite was shattered. The rapid growth in students resulted in rapid expansion in the skills and abilities of the workforce. It also made possible dramatic increases in academic research—the kind of fundamental R&D that drives long-term economic growth.
In the United States, the next most promising market is the Hispanic population. After Mandarin (China) and Hindi (India), Spanish is tied with English as the world population’s “first language.” By 2050, the U.S. Census Bureau projects that 24 percent of the country’s population will be of Hispanic origin.
PRACTICAL IDEAS
Admit You Don’t Know: The first step in tapping into these opportunities is to admit that you don’t know. Don’t assume that your previous experiences apply to these new customers. Take the seemingly easiest category: women. Since when have men been known to understand women? When we are able to let go of our egos, our experiences, and our preconceived beliefs, we are able to learn and understand.
Create Quotas for GROWTH: I’m against government-mandated quotas. However I’m in favor of capitalism. Quite frankly, the days of the WHITE MEN’S CLUB running American business are done. Given the TRILLIONS IN REVENUE that is at stake, it’s irresponsible for any large company not to have an aggressive program of recruiting and promoting women and geezers, as well as managers from China and India. Yes, I did include geezers. As the market shifts, smart companies will need to find ways to attract, retain, and leverage the wisdom of older managers.
If in Doubt, Do ANYTHING: The challenge of marketing to the audiences listed can seem daunting. If we’re not careful, we will become mentally constipated. In our effort to get everything “right,” we’ll end up with analysis paralysis. It’s only by venturing into these markets that you will really learn. So if in doubt, get up, get out, and get going!
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ADVICE
TO ENSURE STRONG TRADE SUPPORT, FOCUS YOUR ATTENTION FIRST AND FOREMOST ON IDEAS THAT GENERATE INCREMENTAL SALES FOR YOUR TRADE CUSTOMERS
There isn’t much mystery in how to gain genuine excitement from trade customers: that is, customers who are resellers of our goods or services. Quite simply, offer them an OVERT BENEFIT. Show them how your offering can meaningfully grow their overall business. If you can’t, show how your product will grow your customers’ overall sales. Then be prepared to pay for the support you get.
Research conducted with 145 buyers on their sales priorities shows that their definitions of success are similar to your own for new products. On a ten-point scale (ten being most important), the following are the top three priorities for retail buyers when evaluating new products.
1. Generate Incremental Sales (8.6 importance): The new product should generate significant net extra volume, not just cannibalize existing volume.
2. An Exciting and Unique Consumer Advantage (8.4 importance): Trade customers look for big ideas that generate big volume. They make their evaluations by looking for evidence that your offering meets an unmet need, provides a unique advantage to consumers, or offers the potential for genuine shopping excitement.
3. Substantial Marketing Support (7.9 importance): Your level of marketing support is evidence of your confidence that your new product will generate significant sales. In addition, trade customers know that when one manufacturer makes a significant marketing investment, it causes healthy competition that results in more total category spending and overall category growth.
PRACTICAL IDEAS
Genuinely Grow Retail Sales Volume: Develop the products and/or merchandising concepts that can meaningfully grow the sales of your retail customers. Create higher-value product
