Presented on 10/04/08

MBA GENERAL MANAGEMENT SMM108 Seminar grouping (Sem B -2007/2008)

Peer Lecture Topic

Mass MarketingMass Marketing

Maximum Market ShareMaximum Market Share Mass marketing aims to reach as many

people as possible

QUANTITY

Example: Coca-Cola. Burger King. K-mart.

Broadcast networks (ABC, CBS). TV is more mass than publications

Network TV more mass than cable TV

The Evolution Into Mass The Evolution Into Mass MarketingMarketing

1880-1890 commerce emerged 1880-1890 commerce emerged 1920s Mass radio Usage1920s Mass radio Usage 40s-50s-It Expanded after Great 40s-50s-It Expanded after Great

Depression Depression 60s-70s-slowed in anti capitalist era60s-70s-slowed in anti capitalist era Telegraph & Railroads development Telegraph & Railroads development

enhanced communicationenhanced communication

Sources: Tedlow, /Richard S (1997) ‘The beginning of mass Sources: Tedlow, /Richard S (1997) ‘The beginning of mass marketing in America: George Eastman and photography as a marketing in America: George Eastman and photography as a case study’ journal of macro marketing fall 67-81case study’ journal of macro marketing fall 67-81Gardner, Dana.(1998) ‘’E-Mail status is elevated as mass Gardner, Dana.(1998) ‘’E-Mail status is elevated as mass marketing tool’’ InfoWorld June 1:84marketing tool’’ InfoWorld June 1:84

Sources:Sources:Tedlow, /Richard S (1997) ‘The beginning of mass Tedlow, /Richard S (1997) ‘The beginning of mass marketing in America: George Eastman and photography marketing in America: George Eastman and photography as a case study’ journal of macro marketing fall 67-81as a case study’ journal of macro marketing fall 67-81Gardner, Dana.(1998) ‘’E-Mail status is elevated as mass Gardner, Dana.(1998) ‘’E-Mail status is elevated as mass marketing tool’’ InfoWorld June 1:84marketing tool’’ InfoWorld June 1:84

Ford ‘T Ford ‘T Model’Model’

coca-colacoca-cola

Proctor and Proctor and gamble gamble

Quaker OatsQuaker Oats

SearsSears

Kodak

The Origins Of Mass Marketing

Mass marketing started alongside mass production at the turn of the twentieth

century – Henry Ford

Ford decided that he wanted to see every

American family owing a Ford car

Producing a standardised product from standardised parts means Ford could reduce costs

Ford famously joked that you could have a Model T in ‘any colour, so long as it’s black’.

Source: Niche v Mass Marketing Source: Niche v Mass Marketing www.school-www.school-portal.co.uk/GroupDownloadFile.aspportal.co.uk/GroupDownloadFile.asp

Mass Marketing

This involves a business aiming at whole markets

rather than particular parts of them – the idea is that

they have a universal appeal

Everyone should be a consumer of the product

The company aims its products at

young and old and is still the market

leader today

The goal of mass marketing is to achieve market

domination – the ultimate prize being

the creation of generic brands

Source: Niche v Mass Marketing Source: Niche v Mass Marketing www.school-www.school-portal.co.uk/GroupDownloadFile.aspportal.co.uk/GroupDownloadFile.asp

Why Mass Marketing

Low costs

Increased sales

Low prices

Which created

Which in turn created

Source: Niche v Mass MarketingSource: Niche v Mass Marketing

www.school-portal.co.uk/GroupDownloadFile.aswww.school-portal.co.uk/GroupDownloadFile.aspp

Mass Vs Mass Vs Targeted MarketingTargeted Marketing

Mass MarketingMass Marketing Target everyoneTarget everyone SimpleSimple Use Existing Use Existing

resourcesresources Simple evaluationSimple evaluation

Targeted MarketingTargeted Marketing Identify & Pursue a Identify & Pursue a

MarketMarket Require Require

sophisticated sophisticated resourcesresources

Can be expensiveCan be expensive Evaluation can be Evaluation can be

difficultdifficult

(Using Your Library's Electronic Resources to Market LibraryPrograms, Materials, and ServicesAugust 10, 2005Eric Graham, Senior Library Consultant, SirsiDynix Inc.)

Mass Marketing No Mass Marketing No more!more!

ReasonsReasons DemographyDemography PreferencesPreferences

Specialized magazinesSpecialized magazinesSpecialized TV channels (as video-on-Specialized TV channels (as video-on-demand )demand )TV & Radio channelsTV & Radio channelsInternet-search enginesInternet-search engines

P&G P&G shifting from Mass shifting from Mass Marketing to millions of Marketing to millions of particular consumers. particular consumers. "You find the people. You "You find the people. You are very focused on are very focused on them," Stengel( P&G's them," Stengel( P&G's global marketing officer) global marketing officer) says. "You become says. "You become relevant to them’’. relevant to them’’. (Business Week, Cover (Business Week, Cover Story, July 12,2004)Story, July 12,2004)

In 2003, P&G spent $4.4 billion, or 10.1% of In 2003, P&G spent $4.4 billion, or 10.1% of sales, on advertising. In 1998, the last time sales, on advertising. In 1998, the last time its spending reached 10%, unit sales volume its spending reached 10%, unit sales volume rose by nearly 4%. Today, P&G's unit growth rose by nearly 4%. Today, P&G's unit growth rate is running closer to 9%. "You can draw rate is running closer to 9%. "You can draw the inference that they are spending the inference that they are spending smarter on advertising smarter on advertising (Business Week, Cover Story, July 12,2004)(Business Week, Cover Story, July 12,2004)

only 10% of the 6,200 only 10% of the 6,200 consumer magazines consumer magazines published today in the U.S. published today in the U.S. are general-interest titles, are general-interest titles, down from 30% two down from 30% two decades ago.decades ago.(Samir Husni, a journalism (Samir Husni, a journalism professor at the University professor at the University of Mississippi)of Mississippi)

Research shows that viewers watch 20% to Research shows that viewers watch 20% to 30% more television after getting a PVR, 30% more television after getting a PVR, but use it to skip about 70% of ads. Today, but use it to skip about 70% of ads. Today, only 4% of U.S. households are equipped only 4% of U.S. households are equipped with PVRs, but Starcom MediaVest with PVRs, but Starcom MediaVest predicts a surge to as much as 30% within predicts a surge to as much as 30% within three yearsthree years

By 2002, the networks' By 2002, the networks' average cost per average cost per thousand viewers, or thousand viewers, or CPM, had soared to CPM, had soared to $16.79 in prime time, $16.79 in prime time, compared with $1.96 in compared with $1.96 in 1972, according to the 1972, according to the Television Bureau of Television Bureau of Advertising.Advertising.

Readership of daily Readership of daily newspapers fell to 55% of newspapers fell to 55% of households in 2002, from a households in 2002, from a high of 81% in 1964high of 81% in 1964

David Martin, president of David Martin, president of Interbrand Corp. Interbrand Corp. Says,Says,

"All the research we're doing tells "All the research we're doing tells us that the driver of demand going us that the driver of demand going forward is all about products that forward is all about products that are 'right for me"are 'right for me"

(Business Week, Cover Story, July 12,2004)(Business Week, Cover Story, July 12,2004)

BeforeBefore Pharmaceutical Pharmaceutical

products worked products worked successful for last successful for last 30 years by using 30 years by using Mass MarketingMass Marketing

NowNow Regulators Regulators

became more became more sophisticatedsophisticated

Customers are Customers are becoming becoming reluctantreluctant

Scenario of Pharmaceutical industryScenario of Pharmaceutical industry

Resultant- Return on Resultant- Return on sales diminishing sales diminishing therefore relevant data therefore relevant data being provided to the being provided to the customerscustomersBusiness Week, Cover Story, July 12,2004)Business Week, Cover Story, July 12,2004)

Ads Ads Actively Actively ignored on ignored on TVTV

BeerBeer 4.8% 31.9%4.8% 31.9% Movie trailersMovie trailers 11.6 44.111.6 44.1 Soft drinks Soft drinks 21.6 82.721.6 82.7 Drug Drug 32.3 45.632.3 45.6 Specialty clothing Specialty clothing 33.4 62.433.4 62.4 Home products Home products 41.6 90.341.6 90.3 Fast food Fast food 45.1 45.1

95.795.7 Cars (national) Cars (national) 52.8 68.852.8 68.8 Pet-related Pet-related 55.5 81.555.5 81.5 Credit cards Credit cards 62.7 94.262.7 94.2 Mortgage financing Mortgage financing 74.1 94.774.1 94.7 Upcoming program Upcoming program 75.3 94.475.3 94.4

Ads skipped Ads skipped using using personal personal videosvideos

Survey of the 15 largest U.S. television markets, done in 2003Data: CNW Marketing Research Inc.The McGraw-Hill Companies, Copyright 2004

marketermarketerss

personal personal informationinformation

attitudesattitudes

desiresdesireshabitshabits

(Business Week, Cover Story, July 12,2004)(Business Week, Cover Story, July 12,2004)

Right For Right For Me?Me?

Mass Marketing Mass Marketing & Scams& Scams

Crackdown on mass-marketing Crackdown on mass-marketing scams scams The OFT1 estimates that scams such as bogus

competitions, lotteries and pyramid schemes cost UK consumers at least £1bn a year

http://news.bbc.co.uk/1/hi/business/4669670.stmLast Updated: Wednesday, 1 February 2006, 15:48 GMT

1. Office of fair Trading

The Great Mass Marketing The Great Mass Marketing

MistakesMistakes Mistake No. 1. Mistake No. 1.

It is wrongly believed that simply more It is wrongly believed that simply more customers and more sales marks the road to customers and more sales marks the road to profitability profitability

Mistake No. 2. Mistake No. 2. The wrong belief that almost everyone wants to The wrong belief that almost everyone wants to hear from them hear from them

Mistake No. 3.Mistake No. 3. The search for magic bullets The search for magic bullets

(Andrew R. Thomas, (Andrew R. Thomas, College of Business Administration, College of Business Administration, Centre for Organizational Development, The University of Centre for Organizational Development, The University of Akron, Akron, Ohio,Akron, Akron, Ohio, The end of mass marketing: or, why The end of mass marketing: or, why all successful marketing is now direct marketing) all successful marketing is now direct marketing)

Understanding Understanding CustomersCustomers Who your customers are?Who your customers are? What they want ?What they want ? What Motivates them to buy?What Motivates them to buy? How does the potential customer normally How does the potential customer normally

buy similar products in store, on the web or buy similar products in store, on the web or door to door)?door to door)?

Who is the primary buyer and primary buyer Who is the primary buyer and primary buyer influencer in the buying process husband, influencer in the buying process husband, wife, children, project leader, secretary)?wife, children, project leader, secretary)?

What kind of habits does my customer have?What kind of habits does my customer have?

(David, (available online)6 deadly small business marketing (David, (available online)6 deadly small business marketing mistakes, p4-5)mistakes, p4-5)

Challenges And ThreatsChallenges And Threats

the right way to send the right the right way to send the right message to the right person message to the right person at the right time at the right time

Conclusion

(Business Week, Cover Story, July 12,2004)(Business Week, Cover Story, July 12,2004)