teachthe4ps.com - For instructors of marketing.

According to “Mountain Dew Wants Some Street Cred” (Bloomberg Businessweek, April 26, 2012) Mountain Dew accounts for 20% of PepsiCo’s US soft drink sales.  The brand is especially popular in the southeastern part of the country — even outselling Coca Cola in convenience stores in Coke’s home state of Georgia.  Mountain Dew’s customer demographics skew to young whites – a slow growth demographic.  So the company has been trying to reach out to young Latinos and blacks.

This short article touches on many different elements of marketing — demographics, targeting, new product development, and advertising.  You could describe the demographic issue in a couple of slides, show the ad below — part of the new “This is How We Dew” campaign — and then ask students what else Mountain Dew could do to appeal to these new target markets.  We have also posted this over at Learn the 4 Ps.

OK, it is a bit sexist, but so is a lot of advertising.  I like that it speaks directly to its target audience — the 18-40 year old male.

Millennials (or Gen Y) refers to those born between 1978 and 1994 (that is the definition we use in our text books).  Right now this group is 18-34 years old and fits right at the heart of many marketers’ target markets.  Unfortunately, for a variety of reasons — both economic and cultural — these consumers are not spending in the same way as earlier generations.  In “Young Consumers Pinch Their Pennies” (Bloomberg Businessweek, March 22, 2012), you can read a wide range of statistics from a recent Pew Research Center survey.  Among the findings, 46% of 18-24s would choose Internet access over owning a car.  For previous generations, cars were an important part of life.  This has companies like GM looking at new strategies, “As Young Lose Interest in Cars, G.M. Turns to MTV for Help” (New York Times, March 22, 2012).  Also posted at Learn the 4 Ps.

Young people represent an important demographic group to many marketers.  Many young people don’t have strong brand attachment, so many consumer product companies target this group.  In our books we define this group as having been born between 1978- 1994 and the actual range varies according to the source — which differs from the 13-24 year old age range cited in this blog post.  Keep that in mind if you present the data in class.  The blog post “Number Crunching:  The Top 51 stats for Generation Y marketers” (TNW Social Media) offers a lot of useful data about social media engagement with brands, gadget ownership, technology usage, and mobile phone usage.  Some my favorite stats (see the blog post for the original sources):

• 65% report researching the next model for their current product, immediately after making a purchase,
• 62.7% of US undergraduates surveyed had an internet-capable handheld device,
• 59% visit Facebook during class, and
• 62% of youth brand and technology decisions are influenced by friends and family.

This data will present well when you cover consumer behavior and demographics.  For users of our books, you can find extensive coverage of technology usage in Basic Marketing (chapter 5) and Essentials of Marketing (chapter 3) — but this post offers an update.

How times have changed.  This article starts with the results of a 1957 survey of Americans that showed 80% believed that people who preferred the single life were “sick,” “immoral,” or “neurotic.”  In 1960, 13.1% of U.S. households were “one-person” — today that number has more than doubled to 27.6%.  In some big cities, the number is over 40%.  You can read more about this trend and its implications for realtors, cruise ship operators, and home improvement retailer Lowe’s in “Solo nation:  American consumers stay single” (CNN Money/Fortune, January 25, 2012) or in sociology professor Eric Klinenberg is new book, Going Solo: The Extraordinary Rise and Surprising Appeal of Living Alone. This article might give you some ideas when discussing demographic trends.  A good question for students might be to ask how companies like Comcast, Starbucks, a restaurant, or a real estate developer might adapt its product to appeal to this consumer.  I have also posted this at Learn the 4 Ps.

Internet marketing research firm, comScore, has just published a new white paper, “It’s a Social World: Top 10 Need-to-Knows About Social Networking and Where It’s Headed” (December 21, 2011).  The report is a free download, although you need to surrender some personal data (name and contact info) to get access.  The research cited in the report really shows how prominent social networking has become in the online experience — all across the globe:  “Social networking is the most popular online activity worldwide accounting for nearly 1 in every 5 minutes spent online in October 2011, and reaches 82 percent of the world’s Internet population, representing 1.2 billion users around the globe.”

I have copied a couple of charts from the report below.  The first shows that usage is high (basically 80-85%) across all age groups — and growing.  The second chart shows the average number of hours per month per visitor.  Download the report for more information.

This article, “Using Google’s Data to Reach Consumers” (New York Times, December 22, 2011) describes a clever campaign Vicks used for its new Behind Ear Thermometer.  To identify a target market Vicks’ marketing managers first looked to smartphone users who were more likely to buy the $40 thermometer.   They ran ads on popular apps like Pandora, which also allowed them to target demographic characteristics, including gender and whether a user was a parent.  Next, it turned to Google Flu Trends an online database that shows which parts of the country have greater flu activity.  Vicks targeted parents in high flu incidence areas who received banner ads stating:  “Flu levels in your area are high, be prepared with Vicks revolutionary Behind Ear Thermometer.”  If they tapped the ad, location services told them of the nearest retailer carrying the thermometer.

This case study is one of the best examples of digital advertising I have read lately.  A nice example of using analytics to identify a target market and a great use of mobile advertising.

AdAge shows us a list of 14 “Stats that Mattered for Media and Marketing in 2011” (AdAge Stat blog, December 12, 2011).  A few of my favorites:

• 71% of P&G’s advertising spending was outside the U.S. — up from 22% in 2011.
• Nuclear families account for just on fifth of all U.S. households, but 34% of the spending.
• Discretionary spending — just over half have less than $10,000 per year to spend on non-essential goods.  A lot of firms chasing less discretionary dollars.

We cover a lot of demographic information in chapter 5 in Basic Marketing, so you might find some of this useful to supplement that chapter.  Of course the advertising spend data works with any advertising chapter.

With sales slow in the U.S., Procter & Gamble brand managers are looking to sharpen their appeal to the growing Hispanic market.  In 2010, there were about 50 million Hispanic-Americans living in the U.S.  In our books we cover this demographic trend in chapter 5 (Basic Marketing) or chapter 3 (Essentials of Marketing).  Obviously P&G sees this growing market these numbers.  So its crack marketing research uncovered new ways to appeal to this market.  This article, “Hola:  P&G Seeks Latino Shoppers” (Wall Street Journal, September 15, 2011, non-subscribers may need to click here) highlights efforts in packaging and product.

This example will work well when you cover demographic trends, market segmentation, cross-cultural, or product — since most of the examples in the article have to do with adapting product to this market.

With demographics you can see the changes coming from a long way off.  The oldest baby boomers turn 65 this year — and many companies are changing marketing strategies to appeal to this growing market.  This article “How to Market to an Aging Boomer: Flattery, Subterfuge and Euphemism” (Wall Street Journal, February 5, 2011 – non-subscribers click here) provides some great examples about how a diverse range of companies from ADT Security Services, to Kimberly Clark’s Depend brand, bathroom fixture maker Kohler and paint retailer Sherwin-Williams are carefully approaching the new baby boomer.  Great examples of how these companies are adapting promotion, place, and product to better meet the needs of this target market.