The Race for Market Share
A Who's Who of Buying...
and maybe why.
our business has a story to tell. Every day is a new page. You are writing it, and it unfolds as you make decisions. You notice how the marketplace is changing. And you adjust.
The race for market share is afoot. Who uses your products and services? People in Chicago? New England? Little Rock? Are they soccer moms? Seniors? Young people? Healthy living enthusiasts?
These are some of the demographic groups you worry about. Ignoring demographic changes in your geographic market means you are ignoring the business story you need to be writing. Demographic changes help you read the future. And prepare for it.
One of the most telling stories showing the importance of demographics is the story of Antonio Swad. He moved from Ohio to Dallas to open a pizzeria. With an Italian-Lebanese background, Swad soon realized that his dream of a traditional pizzeria did not fit the demographics of his largely Hispanic neighborhood. A savvy marketeer, Swad changed the eatery name to Pizza Patron and focused his efforts on serving his Latino community. So, how does an Italian pizzeria attract and keep Hispanic consumers?
Swad embraced the Latino culture through the hiring of bilingual employees to interact with a mixed demographic. He dedicated both time and money to the development and support of community service efforts. As national immigration politics heated up, Swad allowed customers to pay in pesos. This decision met with such controversy that it received national media coverage—a very good thing for a growing business.
The story of Antonio Swad is an excellent example of an astute business owner who recognized that the primary key to the success of his Pizza Patron was in his service to the community. Selling pizza became secondary to recognizing the demographics of the consumers. Swad wrote the future of his Pizza Patron by making certain he served the community in which he operated. Today, Pizza Patron has 95 outlets in six states.
In business, you must meet your consumers where they are—or where they are headed. Eighty-five percent of the country’s growth has taken place in the South and West. Only 54% of children under age eighteen are white non-Hispanic, compared to 80 percent of people over age 65. What does this mean for your business?
Looking forward, the boundaries between categories of consumers are beginning to blur. Consumers no longer like to be singled out based on income, gender, ethnicity or education, One of the keys to keeping your marketing relevant is letting your customers know that you think of them as individuals and that you understand their lifestyles. We know these consumers by many different names such as Baby Boomers, Gen X,Y and Z. And who are these Millennials you keep hearing about? Let’s take a brief look at who they are, how they buy and what that could mean to your business.
Understanding the differences
The Greatest Generation
Born between 1909 and 1945, they’ve seen it all. The litany of inventions that have shaped the 21st century in their lifetime can fill volumes. This is the generation of the Roaring 20s, the Great Depression and World War II. When it comes to advertising, they’ve seen it all—from the local newspaper to radio, black and white TV and now, they’ve learned to navigate the Internet to make shopping easier. They are cautious when it comes to doing business. They are practical and loyal to both brand and service. These seniors don’t generally “shop for fun” but are generous spenders when it comes to the grandchildren. Seventy-five percent of the over-50 crowd are grandparents, and they buy 25 percent of all toys sold in America. Don’t make the mistake of thinking octogenarians aren’t using the Internet. According to the U.S. Census Bureau, people over the age of 65 spend more than $7 billion online each year!
The Boomers generation has been an historic landmark group to watch when predicting new business growth trends. By 2030 the over-60 group will have grown by 80%. They are a group of consumers 76 million strong, spending more than $400 billion more per year than any other generation. At one time this age group would have been labeled as “old”—but not so with the Boomers. They typically have exceptional drive and have been identified as a generation with a Peter Pan complex. They are active, empty-nesters (or possibly full-nesters), grandparents, single and married. Marketing efforts are wise to play to the active youthfulness of the Boomer lifestyle.
These are the children of the Boomers. Born between the years of 1966 and 1976, they are roughly 44 million strong. They are just peaking in terms of earnings and purchasing power. They are tech savvy, love to shop—online or bricks-and-mortar. This is the generation that experienced the high divorce rate of the Boomers. They are the first generation of “latch-key” kids. They are pragmatic and skeptical. As the most educated generation, it is no surprise they place a high value on knowledge and education. They are the “what’s in it for me” generation, and marketing efforts should clearly answer that question for them. They are independent thinkers and they seek value in the products and services they choose.
Millennials or “echo boomers” are the upcoming young adults—the pre-teens, teens and college students. This is the “failure to launch” generation that, for whatever reason, have approximately 20% of 26-year-olds are still living with their parents. These young people are technologically sophisticated. They grew up with cable television, video games, and the Internet. They have been exposed to more ad strategies and messages than any other generation, and they are immune to the traditional sales pitch. They’re 75 million strong, have disposable income, process information quickly and are brand loyal. If you are a Boomer business owner, these are your grandchildren. If you’re fortunate to be a consistent part of their lives, you know a lot about them already. Equally importantly, you know the spending impact this generation has on your own wallet.
Finally, we get to the infants, toddlers and elementary school age generation. It’s our youngest generation, and the demographics and theories are still developing. This is the first generation to be born and raised entirely in the Internet era—and to the parents who accept and understand the technology that is a part of their lives. At this point, we can only surmise the technological influences on Gen Z. Even at a young age, these kids are an integral part of family decision making. They aren’t “along for the ride”—parents discuss options openly with these kids and they are given choices. They are often a part of purchase decisions from what goes in the fridge to the car in the garage. They are involved and participate. Still, the questions remain. How will this early lifestyle translate into spending habits? Purchase decisions? Advertising response?
How do you determine your prime demographic?
Good question. The easiest and most cost effective thing you can do is to engage your customers in friendly conversation. You’ll be surprised what they’ll tell you about their spending habits and preferences when you simply ask smart questions and listen!
Internet services such as SurveyMonkey.com are easy and relatively non-intrusive. If you’re searching for a more sophisticated cost effective means to survey your customers, there may be help available from a university internship or classroom program. Putting together more formal surveys, the way you write the questions can bias the answers you get, and asking your online audience or customers to fill them out is another way.
An easier option is to develop your own surveys or general questions based upon personal accounts rather than strict facts. Asking a research-type question per week on Facebook will at least give you a small sampling of an answer that may be fleshed out to a smart assumption about your customers.
Social technology services that offer cursory analysis of your Twitter or Facebook accounts can be a source. Many social monitoring and management platforms will at least give you gender, age and perhaps household income.
You are writing your business future. Like Antonio Swad, determine your demographic market and then target that market for your products and services. It’s a brave, new world out there. Always has been, always will be. Today’s big difference is that it is moving very fast. Move your business into the future, or get left behind.
by JOHN C. SMILEY