From the October 1996 issue of Entrepreneur

Historically, marketers were accustomed to working in broad strokes. Mass was the word of the day, and consumers were usually perceived as white, middle-aged, middle class--your basic homogeneous unit. The vehicle of choice was the phone book-sized catalog la Sears; the market of choice included anyone who fell between the ages of 18 to 49. The flavor of advertising was, as a rule, bland. Clip art advertising painted a Beaver Cleaver picture of American society: everyone drinking the same milk, buying the same refrigerator, wearing the same trousers.

The baby boom heard 'round the world changed all that. Add the awakening of ethnic and cultural pride, the power of the growing senior market and the onslaught of the Information Age, and you have markets begging to be sharpened down into increasingly microscopic levels. Consequently, marketing in the '90s is becoming akin to taking apart a set of Russian nesting dolls--each shell reveals a smaller piece of the apparently similar constituent. It's no longer good enough to remove the first canister to behold the 50-plus market, or the baby boomer market, or the ethnic market. It's uncovering that tiny doll in the middle that's the key to your success.

Consider that a few years ago, you'd be exalted as cutting-edge if you launched a campaign specifically targeting blacks. Now that's considered pass, even borderline offensive. Marsha Feltingoff, owner of Alma International Inc. in Boca Raton, Florida, points out you can no more use the same marketing strategy to reach a black teenager and a black baby boomer than you could to reach a black teen and a white senior citizen.

Consequently, Feltingoff has built her $20 million company on a marketing strategy as diverse as her audience. She markets African jewelry to an adult black market via glossy black packaging, an upscale gold emblem, and an infomercial that combines authentic African music and a message clearly encouraging cultural pride. Meanwhile, Feltingoff appeals to the younger black market through the Internet: Her Web site, which markets information on musical artists, features a nightclublike atmosphere, bold graphics, and hip cultural and linguistic references.

"I take a very direct approach to [marketing]," says Feltingoff. "I like to peel away the layers of the onion and get to the core of each marketplace I want to reach."

Feltingoff represents a new wave of entrepreneurs who know they must become fluent in niche marketing to stay one step ahead of today's marketing-savvy consumer. "It's much easier to throw jelly beans up in the air and hope they fall in the right place. But that leaves a lot to chance," says Feltingoff, who dabbles in specific market segments via joint ventures or equity investments. "If you take the time to know your market, if you do the homework and build the foundation, you can hone in on that consumer--and your success rate is going to be a lot greater."

Different Folks

"There has been an enormous change in the marketplace," says Ross E. Goldstein, president of Generation Insights, a San Francisco consulting firm that tracks trends. "The consumer marketplace has become so differentiated, it's a misconception to talk about the marketplace in any kind of general, grand way. You have to talk about specific corners of the marketplace. And the imperative for the marketer is to really understand who your consumers are on a number of different levels: what their motivation is, how a particular product or service fits into their lives, what they're looking for, what options are available."

The challenge is to pick a niche, any niche, because "there are a zillion of them," Goldstein says. "You can market to socioeconomic status or to region or to gender or to lifestyle or to technological sophistication. There's no end to the number of different ways you can slice the pie."

To get a feel for just how exact a science marketing has become, consider these statistics:

Female baby boomers influence 80 percent of leisure decisions and conduct 44 percent of business travel.

Vocabulary levels of 18- to 25-year-olds dropped sharply between 1940 and 1980, and continue to steadily decline.

Forty percent of all U.S. Latinos watched the 1995 Super Bowl, while 70 percent watched the 1994 World Cup Final.

About one-third of America's college students don't watch television at all, and 55 percent watch less than 1.5 hours a day.

Black adults aged 24 and younger are three times more likely to buy a pager than the average U.S. adult.

Though obvious in their dissimilarities, these groups are all veterans of the marketing wars. As a result, they display a remarkable discernment about marketing and share an aversion to being lumped together, condescended to or manipulated by businesses.

"Consumers are infinitely wiser about the ways of marketing than they used to be," says Goldstein. "We're talking to a more mature audience, people who know more of what they want and what they're looking for. With the avalanche of information available to consumers, they can scrutinize their purchases more actively than they used to. And they're better able to separate the reality from the fantasy."

New Ages

Imagine an 18-year-old standing next to a 49-year-old. Now show me a marketer who can draw similarities between the two, and I'll show you the laughingstock of his industry. "The [18- to 49-year-old] market doesn't make any sense," says Cheryl Russell, editor of The Boomer Report and editor in chief of New Strategist Publications in Ithaca, New York. "That's just sloppy marketing. Now they've tried to move it up to 25- to 54-year-olds, which is equally silly."

"We're living in a world in which the numbers don't mean what they used to," says Goldstein. "People used to go from one stage to the next, and there was fairly good agreement about the ages at which you do certain things. But what we're seeing now is no longer linear--it's circular. People repeat stages and recycle their lives, so you have people raising a family, getting divorced, and then raising another family. You can have two men who are 64 years old, and one is retired and driving around the country in his Winnebago, while the other one is just remarried with a toddler in the house."

Lowering The Boomer

Yet, while the markets continue to divide like some out-of-control amoeba, the business world has been slow to grasp the new reality of marketing. Part of the problem is this: Instead of rushing to pick up on the transition in marketing, businesses have been lulled into a mindless game of "follow the boomer."

"The baby boomers have driven everything in marketing since the end of World War II, and every company that has gotten a little out front in terms of anticipating what the boomers are going to buy has prospered enormously," says Geoffrey Meredith, founder and president of Lifestage Matrix Marketing, a strategic planning, consulting and marketing communications company in Lafayette, California.

"The baby boom fooled many people into believing that young adults were a force in the marketplace," says Russell. "And for most people in business today, that's all they've known. They don't understand things have changed. They keep chasing after the younger market, hoping to replay the past, waiting for the new group of young people to change everything the way the boomers did. [But] it's only when the boomers started to move beyond the young adult age that the whole idea of generational marketing emerged."

Generational marketing, which defines consumers not just by age but by social, economic, demographic and psychological factors, can be traced back to about 1980. And though it has yet to be fully tapped, it's already becoming dated as we move on to the next twist: cohort marketing (see "A Closer Look"), which Meredith defines as the study of "people who underwent [the same] experiences during their formative years, forming a bond that leads them to behave differently from others, even when [those] others are closer in age."

The cohort construct, developed in the political science arena in the 1940s to determine people's voting patterns and popularized in sociology during the late 1950s, has until now "been almost entirely ignored as a marketing tool," Meredith says. Unlike generations, which are formed according to birth dates and usually span about 20 or 25 years, cohorts vary in length depending on the historic events that define them. Preferences in music, food and apparel, as well as attitudes toward money and sexuality, are often dictated by what was popular during the cohort's coming-of-age period.

To tread an even narrower path, Meredith considers not only cohorts but also other factors such as life stages, or what people are doing at a particular time in their life (getting married, buying a home, retiring); and physiographics, or physical conditions related to age (menopause, nearsightedness or farsightedness, arthritis). By targeting according to these cohorts, "and talking to markets through subliminal cues that are cohort-related, you can achieve extraordinary responses," Meredith says.

Subtlety is the key, now that most of these cohorts have been hammered with marketing manipulation for years. Meredith points to an effort by Johnson & Johnson to market Affinity shampoo for "over-40 hair," as well as the campaign promoting Campbell's Senior Singles as the "soup for one." Both of these efforts "failed miserably," Meredith says.

On the other hand, Meredith notes the success of a Nabisco Oreo commercial that, to appeal to older adults, chose respected actors from that age group who danced to a tune that was popular in the 1940s. "That way, you target 65-year-olds without explicitly saying, `Hey, 65-year-olds, buy this!' " Meredith says. "If you play big band or swing music, they'll respond."

You can't realistically address marketing without taking into account the boomer market, and you have to also consider that 4 million of them are going to be 50 this year. But whatever you do, don't mention the term "senior market" to them.

"There are very few businesses that are attuned to the generational opportunities because they're assuming the boomers are going to be like their parents were," says Russell. "And that's a big mistake because boomer lifestyles and attitudes are very different. They created the youth market 30 years ago, and they're still the youth market now that they're in their 40s and 50s. They're just as hedonistic, impulsive and self-centered as they've always been."

"Boomers like rock 'n' roll," Meredith says. "They liked it when they were 18, they like it now that they're 50, and they will like the Rolling Stones when they're 75."

Actually, boomers are "dead set against being anything like their parents," says Phil Goodman, founder of the Boomer Marketing & Research Center in San Diego and author of The Boomer Marketing Revolution (Boomer Marketing & Research Center). "They've taken that theme with them throughout all their life cycles, and they're not going to change when they're 50. If you're dealing with a 50-year-old boomer, you're dealing with a person who doesn't see himself as 50 years old."

So, in response to the hoopla over the boomers turning 50, Goodman spouts, "Who cares? People are waiting for boomers to change. They can wait until hell freezes over--boomers are never going to change. Fifty-year-olds today don't resemble 50-year-olds from 10 to 15 years ago. And if they don't resemble them, if they don't act like them, why would you market to them that way?"

Cultural Awareness

Another segment that cannot be ignored is the ethnic consumer. With 25 percent of the population either black, Latino or Asian, ethnic Americans represent close to $600 billion in gross income. Amy Hilliard-Jones, founder of Chicago multicultural marketing firm Hilliard-Jones Marketing Group, calls the market "unmined gold."

"The income they represent is well above the income potential of certain countries in the world, including Canada," Hilliard-Jones says. "And yet many U.S. businesses have a strategic plan to invest in other countries [but are ignoring] the significant potential right here within the borders of this country."

Like consumers overseas, ethnic American consumers must often endure the brunt of inane marketing efforts. According to Hilliard-Jones, companies often think it sufficient to just change the faces in a marketing campaign or to place a few ethnic consumers in the backgrounds of ads--"as part of the party," she adds, "but not the host."

Another common mistake is to generalize ethnicities--focusing on, say, Asians, rather than individually addressing the different orientations of Chinese-, Japanese- and Korean-American consumers. To avoid such issues, marketers are called upon to "use a lot of strategic analysis and cultural sensitivity when approaching a multicultural market," Hilliard-Jones says. "They can't make assumptions but must take the time to build a base of cultural awareness."

That doesn't mean relying on stereotypical nuances, such as slang or overtly ethnic overtures. "You don't have to do that to show you understand different ethnicities," says Hilliard-Jones. "What people want is to be recognized that they exist, treated relevantly, and respected for their culture and the heritage that their culture represents to them."

No Mass Appeal

The realm of niche marketing is--by now, you've probably guessed it--a wild ride. Perhaps that's the reason it's taken small businesses so long to catch on. Actually, niche marketing "can be somewhat complicated and costly but no more so than other [types of] marketing," says Meredith. "The payoff, however, is that the marketing results are much more targeted and effective. So small-business owners, to the extent they can apply these techniques and find a niche, can really go after a market and own it rather than having to compete with everyone else."

The Internet should help niche marketing mature, making the concept more accessible for small-business owners as well as consumers. "The Internet eventually will be a vehicle that can reach the masses and yet at the same time target very specific niches," says Russell. "It will provide customized, individual, one-on-one, interactive marketing."

And, when you strip away all the current methodologies, niche marketing really becomes as simple, as low-tech as being able to communicate one on one. "Address consumers naturally, as you would in a personal conversation," says Goodman. "The only way to market to people is to market to one individual rather than to a group. Just create your marketing as if you're talking to John or Jane Doe sitting across the table from you."

This school of thought is worth a try in an era when it's imperative not just to aim for somewhere on the target but to hit the bull's-eye. "People resent being lumped with people they have nothing in common with," says Meredith. "I don't think mass marketing will ever be successful in this country again. The days of Life magazine are over."