Slide 1 Introduction

Before a marketing mix can be created to meet customers' needs and preferences, a marketing firm must find the target market for strategic planning. They must determine if the selected target market aligns with the company's overall mission and objectives.  

Slide 2 Millennials

Millennials (those 18-39, roughly,) are the largest generation in the past 50 years, since the Baby Boomers. Although Millennials make less money than other generations, they still have a lot of discretionary spending, which is rising.  Marketers would be wise to choose Millennials for their target market.

Slide 3 Diversity of Millennials

Millennials are the most diverse and multicultural group in the world, too, so marketers should also make sure that they target African American, Latino, Asian, LGBTQ and female Millennials. African Americans are 14% of the U.S. millennial population (25% worldwide). 26% of Millennials are Hispanic. 20% of Millennials identify as LGBTQ. Millennials make up a quarter of the US population, and half are women. These numbers tell why Millennials should be targeted, but particularly female, LGBTQ and non-white Millennials.

Slide 4 Seniors/Boomers
 
Depending on which product is being sold, seniors are a very large group to target since they're going to be even larger in a few years as the baby boomers grow older.  The average Baby Boomer (those born between 1946 and 1964) is around 65 and retiring. That means that more and more retirement-type products will be sold.   Unlikely the elderly stereotype we're all used to, most baby boomers use computers, smart phones, social media etc. and have a lot of discretionary income.  More than 70% of discretionary income comes from baby boomers, and the majority like to shop online.

Slide 5 Diversity Marketing

Marketing to people of color is called Diversity Marketing.  The U.S. (and the world) is a very diverse place and becomes more so every year. To stay competitive, marketing firms must be aware of the many different cultural backgrounds and evolve to match consumers' varied ethnicities, genders, sexual identity and age, and be sensitive to each group when building marketing plans.

Slide 6 African Americans

Companies that market effectively to African Americans include Nike, Ford, Southwest Airlines, American Airlines, Proctor & Gamble, Home Depot, Verizon and Turner Broadcasting (TNT, TBS and Cartoon Network). Our book notes that African American consumers spend much of their money on depreciable products such as phone services, children's clothing, shoes and hair products. These companies have failed in some of their marketing to African Americans with controversial ads: Pepsi, Nivea, Sony, Protein World, Starbucks, Bic, Under Armour, H&M and Dove.

Slide 7 Hispanics and Latinos

These companies have marketed well to Hispanics: McDonald's, AT&T, Toyota, DISH, Wal-Mart, Nissan and Target. The only marketing blunders we could find for Hispanics involved translation errors. There are many reasons why some companies fail to reach the Hispanic target market, such as the language barrier, or failure to recognize cultural specifics or the importance of a cross-cultural landscape. According to our book, there are different types of Hispanic buyers, based on how much English they speak and how assimilated they are into the general American culture.  Hispanics spend more of their income on groceries, phone services, clothing and shoes, but less on health care, entertainment and insurance.

Slide 8 Asian Americans

Asian Americans are the fastest-growing demographic and are approximately 20% of Millennials.  According to our book, there are more than 15 ethnic groups in the "Asian" census category. They tend to be more educated and have more income than other groups, but marketers don't target them as much as they should. Some companies that are good at marketing to Asians include: AT&T, MetLife, Target, McDonald's, New York Life, Wal-Mart, Verizon and Anheuser-Busch. Marketing fails to Asians in the past have been attributed to KFC, Pringles, Coca-Cola, Ikea, Mercedes-Benz, Verizon, Staples, CVS and Best Buy.

Slide 9 LGBTQ (QIA)

LGBTQ marketing fails are usually due to using stereotypes, assumptions, inappropriate languages or gestures, insinuations, implications and assertions. For example, Skittles got in trouble last year for advertising white skittles (with a white package) with the slogan “Only one rainbow matters this pride. Give the rainbow, taste the rainbow".  It was not received well.  Most brands do a much better job in marketing to LGBTQ customers than they used to, but there is still a long way to go. Of course, some companies are run by people who don't approve of LGBTQ customers; they have poor track records when it comes to this issue and may refuse to target them in their marketing campaigns. This includes Chick-Fil-A, Barilla pasta, Urban Outfitters, Purina, and Cracker Barrel.  However, there is a long list of companies that have built successful marketing campaigns for LGBTQ customers, including Honey Maid, Tiffany & Co., Cheerios, Microsoft, Wells Fargo, Nikon, Ikea, Chobani, Campbell's and Hallmark, among many others.  Most of these are also specifically targeting millennial LGBTQ customers.

Slide 10 Seniors/Boomers part 2

Seniors represent almost 30% of the population of the U.S. There are different types of seniors, from people who are empty-nesters, to those who are retired, those still working and those who live in senior housing, and some on fixed incomes. Seniors come in all different ranges as far as income, religions, location, education level, marital status, etc. Some experienced marketers suggest that you market to seniors by keeping the message simple and using a combination of Email, direct mail, radio, Facebook and other social marketing sites.  Companies that target seniors include Band-Aid, WD40, Ziplock, BloombergBusiness, BusinessInsider, Hershey's, Kleenex, Forbes, HuffingtonPost, and the New York Times.

Slide 11 - Why We Need Different Marketing Strategies for different groups

Do we need different marketing strategies for each minority group? The answer is yes, because 1) while white people have the majority of spending power, their market share is dwindling each year; and 2) each reference group has their own sub-culture, opinions, habits, and experiences, even within the Millennial group.  Within each minority group, there are also different sub-cultures. For instance, Hispanic culture comes from 24 different countries with their own unique preferences and buying behavior.  As we learned in Chapter 5, it's useful to examine demographic variables because the demographic characteristics are closely linked to customers' needs and purchasing behaviors, and they can be readily measured. We also learned that women influence buying decisions much more than men, even though they're roughly equal in terms of population. They account for 85 percent of all consumer purchasers. This is a good reason to concentrate not just on Millennials, ethnic minorities, LGBTQ and seniors, but the women subgroup in each of these groups.

Slide 12 - Each Demographic group differs

Each of these demographic groups differ in their purchasing behavior.  Asians, for example, are the least brand loyal. They tend to change brands often. They also like to keep up appearances and care what other people think; they prefer shopping in groups to shopping alone; and they usually do research on the internet before leaving home to shop. Hispanics prefer to shop with their families, and the children influence the brands they buy. They tend to go out of their way to find new stores and prefer chains over local shops. African Americans like to be stylish and keep up with the latest trends. According to an article in adage.com, African Americans "are the most likely of all groups to be willing to travel an hour or more to shop at their favorite store and almost twice as likely as the average consumer to go out of their way to find new stores, especially if a bargain is to be had." LGBTQ households make 10% more shopping trips per year than other groups; they spend 7% more as well. LGBTQ customers listen to more music and buy more concert and festival tickets, too.  Although we're mostly talking about U.S. marketing, these demographic groups and their spending habits are global.

Seniors are found everywhere, of course, but the larger population of seniors in the U.S. tends to be in the Midwest, upper Northwest, some parts of the Southwest and Florida. However, the worsening economy has made it more difficult for seniors to move to warmer climates, so real estate sales to seniors in those areas has tapered off.  As people age, they tend to find products and services that meet their changing needs. Some retailers cater more to seniors by having larger signs, brighter lighting, and making products easier to reach, as well as featuring wider aisles and varied product choices. For example, senior diets tend to be more high fiber and low sugar, so they buy a lot of those products.  Seniors spend less on clothing than other groups, probably because they're no longer working, or because some have less money to spend.  As people retire, they have more time to spend on hobbies such as reading and golf, so retailers of golfing equipment and lessons can benefit from more seniors in their area. Seniors buy fewer new cars. They spend more on health care. Those who can afford it, travel more, especially on cruises. There are many seniors in the U.S. with discretionary spending power. They have lived long enough to know if they want quality merchandise and where to find it. They spend money not just on themselves, but on their relatives.

Slide 13 - Conclusion

If companies and their marketing teams want to create customers for the future, they need to concentrate on each of the marketing groups mentioned here, and not just young, straight white males and their families. They need to figure out which of the target demographics mentioned here would be most interested in buying the product or service and plan accordingly.  Looking at past and current statistics about who buys what lets marketers know what kind of products and services each group prefers, so that they can then market more effectively.  If they don't, you can bet that their competitors will.  No marketer should want to leave out any group on the erroneous assumption that they don't have money or don't spend it, or that there aren't many of them around, etc. Every one of these groups buy many products and have spending power.

Slide 14 - Sources