MISSING THE TARGET

By February 18, 2018Marketing, Strategy

Mark Ritson, the columnist at Marketing Week, has written something that we at Stonecoast couldn’t agree with any more if we tried really, really hard. Basically, he talks about the school of thought in marketing that segmentation, targeting and positioning are all a bit old hat. Have a read……

Ditching targeting for mass marketing is going back to the dark ages.

“Bruce McColl, the Global CMO for Mars, was in no mood for prevarication last month at the Advertising Research Foundation’s annual ReThink conference in New York City. “I’m not a great believer in targeting,” he explained to the audience. “Our target is about seven billion people sitting on this planet”. He went on to define the challenge for Mars in equally unequivocal terms: “Our task is to reach as many people as we can; to get them to notice us and remember us; to nudge them; and, hopefully, get them to buy us once more this year.”

At first sight you might assume that McColl is lacking marketing expertise. After all marketing theory for the last half century has demonised mass marketing as the antithesis of marketing excellence. Millions of marketers have been indoctrinated into the ‘holy trinity’ of marketing strategy in which a market is first segmented, then a specific target segment is selected and finally the brand is positioned accordingly. How could McColl get it so wrong?

The answer is not so simple. McColl is a fine, very experienced marketer with an impressive track record. He is also not alone in his new found love for mass-marketing. Barely a month passes these days without a senior marketer from one big brand or another stepping up to decry the fallacy of targeting and favouring a mass approach instead. Targeting is in danger of becoming an outdated marketing concept.

Most of the blame/credit for this sea change can be traced back to the Ehrenberg Bass Institute and the remarkable success of Byron Sharp’s book, How Brands Grow. Sharp’s book is as radical as it is influential. Sharp has successfully reframed a wide range of marketing concepts with a potent mix of data, case study and a thinly disguised distaste for fluff. I recommend the book but, of all the many claims contained within it, the broad rejection of targeting troubles me most. Certainly there is a strong case to be made for companies like Mars broadening their scope and aiming for mass household penetration. Indeed, many of our biggest consumer goods companies including Coca-Cola, Unilever and others are now following the Ehrenberg-Bass system and have reversed decades of STP – segmentation, targeting and positioning – and returned to a mass-marketing approach.

As much as this might make sense for some, I would caution marketers to consider the move carefully before jumping onto the anti-targeting band wagon. There are still many instances where a clearly identified target segment will make you more money than a mass marketing approach. Smaller companies, for example, without the resources or scale of a Mars would do well to start by taking a smaller, segmented bite of the marketing apple and gradually building their presence. That’s especially compelling if the big boys you are up against are now all engaged in an Ehrenbergian attempt at mass marketing.

In markets where dynamics exist between segments, the case for targeting also remains strong. I worked last week for an American fashion brand that had aged with its client base and had suddenly discovered it’s once twenty-something customer was now forty-something. Nothing wrong with that customer or her sales, but without an explicit re-focus on a new generation of younger clients the brand in question was looking at a long, slow death.

Similarly, in the much less discussed world of B2B marketing, where the sales force forms an inextricable resource constraint, it would be suicide to try and apply such a mass marketing approach. While Ehrenberg-Bass is correct to challenge the applicability of Pareto’s principle that 80% of sales derive from 20% of the customers in categories like dog food and confectionery, I can assure them that the old Italian’s theorem applies beautifully in B2B settings. These consumer asymmetries combined with a tiny sales force impel an organisation to target tightly.

Clearly Mars think they have a sound strategy and who am I to suggest otherwise? But if targeting becomes a dirty word across the whole of our discipline we risk a return to the marketing dark ages. It is impossible to teach targeting to MBA students these days without extensive reference to Ehrenberg-Bass and its theories, but I still teach targeting as an explicit strategic choice. Do we target everyone like Mars? Do we target a couple of segments? Or do we make the leap of faith that says because of our size or the market’s dynamics we will only go after one segment?

Seen this way, targeting remains an essential strategic question for all marketers. But it becomes a question of who rather than if. I would argue Bruce McColl is mistaken to claim he is not a big believer in targeting. I think he has decided – in this instance – to target everyone.”

If you are a medium, small or even large company, to not segment your market and target appropriately can be a massive mistake. To think that what you do will appeal to the myriad of potential customer segments out there is an interesting approach and one we think is doomed to fail. Maybe you can get away with it if you are a global behemoth but I’m not too sure if that’ going to work out brilliantly for those guys either.