Step 4: A quick check as to which groups get what investment.
|Total Population||W 25-39||As a %||% of Population||% of our Target||TGT Index||Gelatin Index|
Ready For Market Planning and Decision Making
Based on this process you have a few strategic decisions:
- Gelatin consumption is driven by two factors: price/income and novelty
o Hispanics and Black/AA make less than White non-hispanics, so they will be better gelatin consumers
o We will need to develop novelties for all 4 quarters to keep the product growing into a cash cow
- 12% of all Hispanics are in our target (women 25-39), they are a large group (17% of the population and 20% of the women in our target), so they get an investment budget.
- 11% of all Black/AA are also in our target, they are a large group (12% of the population) but are not as large as Hispanics (at 14% of our target), so they will get a budget, but it will not be an “investment” budget, but probably a maintenance-level budget.
- Finally, white non-Hispanics, while indexing low on all counts, still will represent 46% of our consumption, so they get a “large/maintenance” budget.
Marketing Decisions Based on What the Data Suggests
|Expected Sales||$ 260,000,000||Creative||Media|
|% to Advertising||$ 26,000,000||10%||20%||80%|
|$ 5,200,000||$ 20,800,000|
|% of Consumption||Index||Budget|
|White Non-Hispanic||46%||80||35%||$ 1,820,000||$ 7,280,000|
|Hispanics||31%||158||47%||$ 2,444,000||$ 9,776,000|
|Black/AA||16%||115||18%||$ 936,000||$ 3,744,000|
|Asian||7%||95||–||$ –||$ –|
|All Others||1%||30||–||$ –||$ –|
|100%||100%||$ 5,200,000||$ 20,800,000|
I have purposely avoided the issue of “acculturated” vs “non-acculturated” Hispanics to avoid more complexity, but it is easy enough to factor those, too, in the equation.
As a result of this “Total Market” approach, I would be dedicating 35% of the budget to White Non-Hispanics, 47% to Hispanics and 18% to African Americans. I would probably decide against any specific advertising against Asians (small grow, medium index) and all others (no influence on sales whatsoever).
Once you have identified and segmented your Total Market you have to develop your Total market strategy. Stay tuned for lesson 2, Developing a Total Marketing Strategy That Targets your Market Segments