Goodbye Mass Market, Welcome Nanomarket.
Today's increasing diversity has transformed the mass market into what
some researchers call the "nanomarket". Marketplaces are
fragmenting into tiny pieces due to an explosive growth in
consumer segments, preferences, tastes and lifestyles that's
beyond the measuring ability of traditional demographics. This
implies the need to look at the marketplaces in a new way.
Demographics alone no longer work in a mass market that's more
or less dead. Today's marketplaces are individualized,
customized, and personalized. The implication is that the
producers and sellers --companies, manufacturers, marketers and
retailers-- need to adapt to the new realities of the Internet
Era.
Many companies, however, continue to operate on old beliefs
based on demographic data, and it's leading to a disconnect
between companies and consumers. Many advertisements, for
example, continue to portray women as married, stay-at-home moms
in a world where an increasing number of women stay single into
their 40s, become single moms by choice and take on
primary-breadwinner roles within their families.
Amid such shifts, simply saying your campaign targets women 18
to 49 has become meaningless. Demographics today don't tell you
the whole story, marketers know that old demographic targeting
isn't working for them. It gives them nothing.
Big companies are going deeper into consumers' heads to
understand what drives them to buy--and this, in turn, is driving
market research methods such as ethnography. Ethnographers are
cultural anthropologists who observe how consumers use products
and services in their natural environments. They write reports
using the words and phrasing of the people they study, and the
information helps companies figure out the behaviors and
reasoning behind people's purchasing decisions.
Instead of boxing their customers into one profile, large
companies are segmenting customers into ever-narrower lifestyle
profiles and categories to understand their core values. They're
targeting the 20 percent of customers who generate 80 percent of
their business, based on the Pareto Principle.
Electronics retailer Best Buy, for example, now focuses its
business on five customer profiles instead of trying to broadly
tailor its marketing to fit every customer profile. Most
entrepreneurs, however, still try to be everything to everyone by
targeting a wide demographic. Focusing on a specific, high-value
profitable target audience, and then doing everything you can to
engage them, requires a change of mentality for the mass-market
marketers.
Demographics aren't becoming obsolete, they are just taking on
a new role as marketers get smarter in how to apply them.
Entreprenuers have understode that there are other ways of
looking at your customers. Consumer attitudes will replace demographics as
the basis for marketing execution, and companies will have to
incorporate attitudes into their databases the same way they have
used demographics in the past. Today you have to speak with lifestyle
relevance to your customers to get their attention. Understanding lifestyles
is crucial to understanding your customers.
Two things are necessary for understanding customers, one is
intuition and the other is data mining. Market research is used
to gather customer household income, age and other lifestyle
information that helps make marketing and product-design
decisions. The Internet is a great tool for learning about your customers.
It's much more up-to-date than an old demographics list.
