How Minorities Are Becoming Markets Of Consequence

In the past, most of America was white and European. As people immigrated to this land (either on their own will or in chains as slaves), America grew to be “a great melting pot” of cultures. Ethnic groups were expected to assimilate into the “mainstream.”

Nobody was supposed to rock the boat.

I suppose that theory works great if other than their religion or maybe an accent, everyone looks pretty much the same. The problem is that by the mid-1800’s immigrants to this country were looking different than the white majority. Freed slaves were black. Laborers from the orient were from a variety of Asian cultures. Hispanics came from a tremendously diverse array of countries and cultures. And none of these groups wanted to melt into the American culture and lose their identity in the process.

By the time of the civil rights movement of the 1960’s, it was pretty clear that America was moving from “melting pot” to “multi-cultural society.” But by the time of the riots and protests about and for civil rights, much of the white population of America decided to ignore the situation, safe in the assumption that they would always be in the majority.

Well, that equation is about to change.

According to the US Census bureau, the US Hispanic population is growing at a rate that will make it the number two population group by 2010. By 2040, the US population will be so ethnically diverse there won’t be a majority race. Whites will be in the minority just like everyone else.

Economically speaking, minority households are catching up to white households as well. According to the US Small Business Association, African Americans, Hispanics and Asians currently represent about $600 billion in annual buying power. Minority-owned businesses are growing faster than the national average, as well. Sales dollars for minority businesses grew by 24% each year according to a study conducted by Conning & Company.

The market is growing. That much is clear. But why and how does a business engage in a campaign directly aimed at this market? Let’s start with “why”:

The growth of minority businesses and affluence in minority markets is appealing, yes, but businesses often raise concerns over the fragmented nature of the minority market and the many, many languages that pose a barrier to clear confusion and work towards understanding.

The fragmented nature of ethnic markets in the United States can actually work to a marketer’s advantage. In many cases, the specific market in question often has one or more media serving it. Although finding the media might be a bit of a challenge, working with the media to gain coverage (editorial) and to purchase space (advertising) should be relatively easy. Once you’re partnered with the media, you are in position to get the market’s attention. All you have to do is make sure your message is relevant.

Andrea Ogunkoya, a business writer and author of the book “Minority Marketing” adds emphasis to the idea of relevance:

“…marketing agencies have largely got no idea how to target this sector and have been getting it wrong for years. In order to understand this market, you have to be willing to invest in them. Not dusting off the crumbs from your marketing budget, but breaking bread with them.”

The good news is that media placements in media owned and targeting ethnic minorities has higher viewership/readership numbers inside their community. More than 70% of ethnic minorities polled recently, said they considered their community paper/media outlet to be their local news as opposed to the mainstream networks.

As you work towards establishing a clear idea of where the market sits and the unique obstacles it faces when it comes to forming a relationship with your brand, you’ll see opportunities to reach out and connect with this market. Here are some examples of what other companies have done to establish a connection into the ethnic market (courtesy of the SBA):

• Carnival Cruise Lines has dedicated an entire cruise ship called the Fiesta Marina to the Hispanic Market.
  
• J.C. Penney offers linens with bold African prints and cosmetics designed for women of color.
  
• General Mills became the first cereal company to introduce a product specifically for Hispanic consumers. It’s called Bunuelitos after a sweet Mexican pastry.
  
• Several insurance companies worked with their minority agents to develop products and services specifically for those markets.

And the list goes on. What are you going to do to get your brand on the list for next year?

Technorati Tags: Marketing, Advertising, B2B Marketing, Ethnic Advertising, Minority Marketing, Client Management, Leadership, Creative Thinking, Culture, Cultural Diversity

This information is (c) 2006, Brand Central Station, all rights reserved. If you are interested in receiving news and analysis directly from BCS, please log onto our website.

Death By Innovation

There is no question that innovation is important. The participants in our BCS polls agreed (as we suspected they might). More than 80% of the companies we surveyed said their businesses were more innovative than they were just one year ago.

But why?

“It’s the key to being competitive,” explained Denise Dorman of Write Brain Media in Chicago. Dorman works with a variety of clients located around the country, helping them to spot the innovative and creative, then bringing it to people’s attention.

Her statement was echoed by several others survey participants. “Change can bring success on many fronts,” wrote one manager from a national retail chain. “Merchants, marketing and our stores have the responsibility (for innovation).”

But businesses must be careful to avoid innovation without reason. Product innovation without suitable backing of customer insights can lead to some unpleasant consequences.

Consultant, author and speaker, Reva Nelson puts it this way:

“… what happens with innovation gone wrong, innovation for its own sake?

It forgets its roots, it moves too far away from the main trunk, it tries to disconnect and communication gets shot to hell. There are some consultants, managers and CEO's who forget about connection and communication, and think innovation is an end to itself. It's not. All innovation, like all change, must be well-communicated. It needs to take its time, and stay connected to the source.”

Nelson uses the example of downsizing as a perfect example of innovation run amok. The backlash from losing some really good people and vital institutional memory can quickly erase the financial benefits of the business decision.

It’s also possible for technological innovation to outpace the ability of the users to learn and adapt. The result is frustration, a loss of productivity and the possible loss of talent due to frustration.

The key to making innovation work is to make sure there is plenty of communication both internally and externally. Expectations need to be set and managed and, most importantly, benchmarks need to be clearly set so those living with the innovation can recognize the progress they’re making.

Technorati Tags: Marketing, Advertising, Branding, Brand, Leadership, Client Management, Innovation, Creative Thinking

This information is (c) 2006, Brand Central Station, all rights reserved. If you are interested in receiving news and analysis directly from BCS, please log onto our website.

The True Cost Of Market Research

If there’s one, key distinguishing factor between big companies and small ones, it’s the amount of time, effort and attention the large companies dedicate to market research. Market research, as most companies view it, can be an expensive undertaking even when managed by the most proficient of facilitators. In the wrong hands, the combined costs of lost opportunities, incorrect conclusions drawn from data and inept management of the research process can force client companies to re-consider doing any research at all.

That may explain why in a recent poll conducted by Brand Central Station, barely more than half (50.3%) of the corporate communicators participating in the survey said their companies conducted marketing research projects frequently or all the time. “It helps us to manage our brand structure, the advertising messages and images and it allows us to connect our advertising to our sales teams,” explained James Lauteri of Mellon Financial Corporation in Pittsburgh.

“We are able to focus our time on developing products with a high probability of success as opposed to blindly developing products that don’t fit our customer’s needs,” wrote the San Antonio Express News’, Merrell Ligons.

Clearly, you have to establish the value of the information gained in order to justify the cost and time associated with conducting research. But while management may understand the benefits of research when it comes to developing new products or clarifying the relationship between advertising and sales, there are far greater costs managers need to consider when they decide to forego market research.

Adam Hayes, owner/manager of AH Digital FX Studios conducts his own market research in order to stay one step ahead of the competition. “Without feedback from the market you will never adapt quick enough to changes and new challenges in the marketplace,” he says. “Staying ‘ahead of the game’ is critical in our business.”

One of the major obstacles most companies face when it comes to research is cost. And big research costs are most commonly associated with primary research. Understanding the difference between primary and secondary research could save your company a bundle.

Primary research is best described as information that comes straight from the source. If you want to know what customers think, you ask them; document their responses and then draw your conclusions. It’s as simple as that, really.

Secondary research is best described as information you collect and the insights you draw from other peoples’ primary research. There are many sources of secondary research materials to draw upon ranging from your local library to your favorite media representatives. In fact, your regular media vendors can be a wealth of information on market trends, competition and more.

Realizing you have several sources of information to draw upon, it’s vitally important to clearly define what you want to know at the end of your research project. This may take some digging on your part, but keep in mind that the better the job you do defining the problem at hand, the more likely the research you conduct will identify solutions.

If you’ve never conducted a market research project before, here’s a handy guide that tells you what to do. There are also hundreds of research consultants who can help you walk through the process as well. And, I suppose, this is as good a place as any to suggest you visit the Brand Central Station web site and check out our new Market Research Inventory Page. It’s a page full of links to helpful “hacks”, service providers and consultants. It’s as good a place to start as any.

Good luck.

Technorati Tags: Marketing, Branding, Market Research, Customer Relationships, Vendor Relationships, Employee Training, Sales Training, Informed Decision Making

This information is (c) 2006, Brand Central Station, all rights reserved. If you are interested in receiving news and analysis directly from BCS, please log onto our website.

Two Heads Really Are Better Than One

It seems like common sense, doesn't it?

As social creatures, it would seem that people should work together in a group rather than alone. Division of labor and all that. Synergies. Sparking ideas. Great chemistry. We've heard it all before.

So, then why does it take so many people so long to "get" collaboration? Why don't people want to work together?

"Collaboration is key to making everyone in the organization better," explains Adam Hayes, of AH Digital FX Studios in Idaho Falls, Idaho. "Everyone has specific skill sets that they possess and are thus beneficial in improving the overall quality of any given product."

When we interviewed corporate communicators and business leaders and asked them about the collaborative capabilities of their new employees - those employees hired with the understanding that today's workplace calls for collaborative skills - over 40% of those incoming employees were rated at or below average ability. Is that setting ourselves up for failure?

After looking into this problem, the short answer is that we are often too hard on ourselves. Collaboration is not easy. Some cultures have a greater difficulty with the concept than others - but the fact is much of what it takes to be a great, collaborating organization is counter-intuitive to accepted business practices.

Today's business environment - the one that calls for greater collaboration - faces serious economic challenges that requires each employee to be more productive and requiring less oversight. In short, we are asking people to be more autonomous and more collaborative at the same time. This apparent contradiction works thanks to advancements in communications technology.

We know the traditional communications channels (e.g. meetings, call reports, e-mail) won't cut it any more. Some take too much time, others are not easily modified to meet the needs of multiple recipients easily and efficiently. Still others are one-to-one communications that quickly become confused and inefficient when shared with parties outside the original relationship. Instead, co-workers need to find the best ways to communicate and collaborate that combine technology and technique.

The management challenges of structuring a more autonomous and collaborative workplace are signficant. Believe it or not, management's success boils down to its ability to communicate and it's willingness to trust employees. More on that here.

Ironically, we may already be training our workers on the new collaborative processes of the future through online entertainment and other media. While blogs, wikis and other social media has been stealing the thunder in the business workspace, online games like Second Life and other social interaction role-playing games have been teaching people how to work together without even being in the same time zone.

The secret for success in the coming generation of employees may lie in an ability to identify those prospective employees with the greatest collaborative training. "Identifying this skill (collaboration) in potential new hires is a skill in itself and our capabilities here could be improved," says one corporate marketing director.

Finally, there is one last area of collaboration that has been long-recognized as being a high-value practice among businesses: collaborations with customers and suppliers. The economic benefits of collaborations in these areas (whether they are joint ventures, preferred customer/supplier relationships, etc.) are fairly obvious. There are marketing disciplines growing up around this phenomenon (i.e. word-of-mouth marketing, customer evangelism, etc.). You can read more about that in our Brand Crafting blog (re: consumer collaborations) and our Business of Business Marketing blog (re: supplier/customer collaborations).

And, of course, because this is a blog, please feel free to contribute to this discussion at any time.

Technorati Tags: Marketing, Branding, Collaboration, Partnership, Hawthorne Effect, Customer Relationships, Vendor Relations, Leadership, Culture

This information is (c) 2006, Brand Central Station, all rights reserved. If you are interested in receiving news and analysis directly from BCS, please log onto our website.

Seeing The Impact Of A Strategic Vision

For the past few weeks, I’ve been working with a client on matters concerning their “corporate vision.” It’s all a part of the brand development process outlined in our BrandCrafting blog – but the point I wanted to relate here is that this client (and many others, I assume) needed to understand the relationship between “vision” and “value” before he would move ahead with this project.

It’s not as obvious as it sounds, I think.

Creating a “corporate vision” sounds pretty loose and fluffy. Not a lot of implied value and plenty of “naval gazing” (as my dad would have called it). But to easily dismiss the visioning process is to close out real opportunity to formulate consensus among corporate management when it comes to setting a direction and a general plan for growth and development.

Personally, I opted for “vision” work like this years ago. As a cultural historian of sorts, I can see plenty of examples where things worked better when there was clarity of vision at the top. As a result, I’ve always worked with clients to help them identify their own personal version of success – and that’s the trick.

By getting clients to define where they want to be it becomes much easier to talk in concrete terms about potential stumbling blocks like budgets, deadlines and obligations for success. Arrangements are easier to make with vendors if the company has a clear idea of what kind of products it’s going to produce. Prospect lists are culled more easily once there are some rules in place that will help qualify and quantify sales leads.

But even though a clear vision can impact operations and customer relationships, its biggest impact is on the perceived value of the brand. Exactly how that value is imparted on the brand may surprise you.

Brand value improves not due to the boldness or uniqueness of the vision, but rather because everyone involved in adding value to the brand is informed and in agreement on how the brand will be successful. The lesson is simple and obvious: if everyone works together to make the brand what they agree it should be, the brand will be more successful than the alternative (of not working together).

There is another aspect of “vision” work that I enjoy. You see, when you develop a corporate vision, you have to take the time to make sure you understand how each constituency (i.e. market) will interpret and value that vision. As a result, the messages created to convey the vision (and its related values) are developed and targeted to specific markets and through specific media channels. The “promise making” part of brand equity building becomes much more precise and deliberate.

The result of all this sharing and communicating is the clarification of the “mission” so often overlooked by employees today, from the rank-and-file to the C-level executives. The corporate mission statement – once a bastion of bad grammar, convoluted buzz words and jargon – can now be distilled to one simple phrase:

“Live up to the promises we make and turn our vision of the future into a reality.”

It’s a clear and simple challenge that requires a fresh start every day. And with a healthy investment in a clear and succinct “visioning” process in place, mission statements don’t come much easier to understand than that.

Technorati Tags: Marketing, Strategic Planning, Corporate Vision, Brand, Brand Equity, Branding