Making News

(October 2008)

Using Niche Marketing to Reach

Shifting and Growing Consumer Targets

By Megan Webb and Alicia Diaz-Verson

 

With an ever-increasing diverse population, the ‘average American’ is becoming increasingly harder to define.  Witnessing this shift, marketers have turned away from mass marketing in favor of niche marketing, which consists of a tailored approach to smaller, more targeted markets and attitudinal groups. As we “think global and act local”, marketers must understand the changing makeup and the desires of the most attractive audiences for their product or service and how media segmentation can be used to successfully address each group.

“Non-Traditional” Households are Taking a Leading Position

The number of “non traditional” households and their impact in the consumer marketplace—unmarried couples; military households; single-sex, single-parent, singles of all type households; minority; and multi-generational households—are growing rapidly. This growth requires a new appreciation for attitudinal market segmentation that address each groups’ unique preferences and buying patterns.

The ever-growing impact and increasing visibility of single-sex relationships, gay communities or gayborhoods, and families with single-sex parents throughout the nation is one example. Although this may be primarily an urban phenomenon, it is not so exclusively. These family units are keen to select an area, a dwelling, and the products in which they choose to fill it with an eye for aesthetics, style, color and often a historical significance. They are not afraid of the unusual and extend their active lifestyle to enhance community life and to provide a rich and vibrant background for themselves and for those around them.

These gayborhoods often transform previously depressed areas into gentrified upscale neighborhoods with vast economic influence and appeal to a broad range of people outside of the gay community. The urban renewal they often drive is critical to reemerging cities and the once appealing neighborhoods that have fallen out of favor and into disrepair.

Not only is this group a huge force in urban renewal–whether living in urban eclectic neighborhoods or single-family suburban homes–they have huge spending power and economic influence. In fact, this group’s buying power is expected to hit $2 trillion by the year 2012! When reaching out to gay consumers, focus on their enhanced affluence and interest in style, brands, luxury and travel. The key is to speak to their individual identity, which is oftentimes ignored by mainstream media and marketing.

Take cues from some of today’s forward thinking companies. One example is IKEA, the Swedish based furniture retailer, which has made vast strides to capture the coveted income of the gay community. The company’s TV advertisements star a gay family of two men and their daughter. Other brands like Ford, Anheuser-Bush, Travelocity, Absolut Vodka, Tylenol and Altoids have capitalized on the opportunity to attract the gay population in their marketing and sponsorships. As a result, these brands have augmented brand awareness and sales with a vast following of gay consumers.

Mounting Hispanic Population

The 46 million people who make up the Hispanic population have over $700 billion in spending power. This growing group represents an increasingly vital component of a healthy housing and consumer products market.

The steady stream of immigrants has elevated the minority share of households to more than 25 percent.  As a result, the American housing landscape has seen a steady influx of non-traditional housing.  Multi-generational housing that fits an extended family lifestyle and infill neighborhoods are growing rapidly across the nation. 

According to industry insiders, in many areas of the U.S. builders are addressing this niche with home designs that recognize Hispanics’ inclination to house multi-generational families living under one roof.  Recent trends in Hispanic home building include greater numbers of smaller bedrooms, convertible garages, generous parking space and easy indoor-outdoor access. 

Savvy home industry marketers can capitalize on this growing trend by having a clear understanding of the audience and ensuring marketing messages are culturally relevant. In addition, companies can attract a strong, motivated workforce from this population if they recognize the need to tailor not only their marketing messages but also their employee training materials to accommodate language differences.  Home Depot is leading the way with a new publication titled Constru-Guía al Día (Up-to-date Construction Guide).  This Spanish language quarterly for construction contractors has emerged as a rare media conduit to Spanish-speaking, under-the-radar male immigrants. 

Ruppies . . . Shattering Post-Retirement Stereotypes

If you think you know the typical ‘mature’ adult, chances are you should look again.  As they did in their youth, baby boomers are forging their way into uncharted territory when it comes to life after retirement.  Ruppies, or “retired urban professionals,” eschew typecasts and are setting the new standard for life after retirement.  This cohort 40 million strong, with an estimated $2 trillion in annual spending power, is a force to be reckoned with. 

Ruppies seek high-density, bustling communities in large cities that make them feel young. For this group, location holds the key to the elusive fountain of youth.  According to a recent survey by the AIA, there is a marked emphasis on accessibility and a continued importance on increased informal space in the home…including open space layouts and flexible floor plans.

 

To make marketing messages relevant to Ruppies, avoid references to age.  Ruppies are drawn to messages that speak the truth and reveal meaningful, emotional connections. They judge companies, brands, products and services by the value gained and expect more than just functionality and performance.

To reach this lucrative cohort, consider media segmentation beyond traditional media outlets. Recent studies reveal that Ruppies are attracted to social media.  In fact, the findings show that 41 percent of baby boomers have visited social networks, such as Facebook, and 61 percent have been to sites with streaming or downloadable video. What’s more, they aren’t just visiting these sites on a one time only basis. According to a report by Forrester Research, about one-third of North American adults use social networking sites at least once a month.

Young Professionals

Generation X, now between the ages of 27 and 43, is a force about 51 million strong with a total spending power of over $200 billion annually. Born between the years of 1982 and 1998, Generation Y, has a population of about 75 million and averages an annual cumulative spending power near $150 billion.

These groups represent the fastest growing homebuyer segment in the country. About 1.5 million homeowners nationwide are younger than 25, two times the figure from 1997. These young adults will be the generation driving housing and home products trends over the next few decades. An increasing number of young adults will seek smaller ‘starter’ homes than in the past, which they view as a fresh alternative to a crippling mortgage payment, along with upkeep and maintenance expenses.

Published reports suggest that this group is flexing their buying power and penchant for home renovation. Renovations are popular among younger generations who see it as an opportunity to personalize their homes and make a statement. Young professionals are more likely to put all of their remodeling efforts into creating one or two very high-end rooms.  They also place a heavy emphasis on kitchens because of their entertainment value. 

Beware when marketing to young professionals. These young, price-conscious consumers are more knowledgeable than you might give them credit for. They are both skeptical and sophisticated in their purchasing decisions.  As they make up the most advertised to generation in history, traditional marketing messages are less likely to penetrate their collective psyche. They are savvy web users who are keen on the latest technology trends…so focus your sights on online marketing tactics.

What’s Next for the Housing Market?

Today's consumers insist that businesses understand and accommodate their personal taste and individual needs. They respond to messaging and visual imagery that speaks to them directly and that recognizes their unique lifestyle choices. Successful marketers are making the shift from broad, generic messaging to pointed, targeted communications that are delivered to each group in the places that they most often frequent for information on the web–via targeted programming and publications in the media, and through community sponsorship support.    

Prominent industry events and tradeshows often stimulate novel marketing approaches designed to appeal to an array of audience segments.  At this year’s Kitchen & Bath Industry Show, Meredith Publications (Kitchen and Bath Ideas, Better Homes & Gardens, Traditional Home, and more) and the NKBA partnered to create the 2008 Design Idea Center titled "Your Kitchen. Your Bath. Your Way. Designs for Every Lifestyle and Life Stage." The Design Idea Center featured products, appliances and materials from a variety of manufacturers and designers including Armstrong, DuPont Surfaces, Kohler, KraftMaid and Sub-Zero/Wolf. Each brand revealed a fresh and unique look that addressed the needs and desires of individuals as they progress through various life stages.

Be smart when marketing to each individual group. The increased pressure of a down economy causes a crucial need to connect with each consumer emotionally. Offer them solutions, avoid stereotyping, and look to personalized marketing approachs that serve the needs and desires of each cohort. In the home and building channel, it is critical to remember that the home represents who we are and how we define ourselves.  

Looking for more marketing advice? Click here to check out Steve Kleber’s blog or call 770-518-1000.

 

  <<Newer                                                                                                                           Older >>