Considering “Total Market “Strategies? Research & the Front-lines Offer Positive Outlook [INSIGHT]

For those brands still deciding on the merits of Total Market (TM) strategies and whether to make the shift, the panel presenting the preliminary results of AHAA: The Voice of Hispanic Marketing’s Total Market benchmark study at the recent Association of National Advertisers (ANA) Multicultural Conference, made compelling arguments on the need to evolve towards Total Market strategies.

“While the definition and best practices of Total Market strategies may still be evolving, it is becoming clearer that for many brands, shifting to TM strategies is becoming a business necessity,” said panelist, Carlos Santiago, Chair of AHAA Research Committee/Chief Strategist of Santiago Solutions Group. “Taking the old concept of General Market to the next level, new TM strategies should reflect the impact of multicultural populations on the marketplace.  Company strategies need to evolve to reflect the societal change that has happened in the new American mainstream.”   

Point #1: For brands undecided about whether to adopt TM, the ANA panel made compelling arguments for its consideration.  TM is becoming a business necessity to reflect the impact of the multicultural population on the new mainstream.

According to co-panelist Roberto Orci, Chair of AHAA/CEO Acento Advertising, Walmart familiarized the concept of Total Market strategy two years ago, stating “that the multicultural segment was leading all of their growth. “  Walmart eliminated “silo segment marketing” conducted by multicultural marketing teams and made multicultural marketing a business imperative across all its business units.   “That’s how you define Total Market strategy,” noted co-panelist Lizette Williams, Senior Brand Manager for Kimberly Clark. “It’s the active inclusion of multicultural consumers throughout the entire business strategy process, from the beginning, when you are developing a big idea, to the execution.”  

Point #2:  TM, introduced by Walmart, grew out of a shift from silo marketing because of the reality that multicultural was leading growth across all their business units.  Essentially, this is how TM came to be defined: inclusion of multicultural across the entire business strategy.  

Williams who leads the Total Market transformation at KC further expanded her Total Market strategy definition by describing the TM strategies as a hybrid, working with the brand team and the multicultural team. “It’s like a table with legs.  The top is the broad reaching and inclusive brand strategy that exists on a national level, encompassing diverse and ethnic consumers.  The legs are the segmented and regional strategies that allow for the local differences and foundation for sustainable and long-term growth.”  This reflected AHAA study results presented by Santiago earlier, which indicated that in practice, Total Market strategies currently being implemented by companies are a hybrid of total business strategies, blended with segmented strategies:  “With a hybrid TM strategy, not only are the commonalities addressed within the overall new mainstream, but also the nuances that are so important to resonate directly with the segments fueling the growth of the brand.”   

Point #3:  But the definition of TM is not limited only to a single top level strategy – it should be a hybrid which also includes segmented and regional strategies, which results in accelerated growth.  

Expanding on the AHAA study results, Santiago shed further insight on the motivators for trying TM strategies.  Of those currently implementing Total Market strategies, “the drivers for trying TM were equally based in budget efficiencies and marketing effectiveness. In fact, a majority of the designated brands applying TM approaches were delivering incremental results in market share, revenue growth, ROI and distribution.”

Point #4: According to AHAA’s study, the main drivers for TM are budget efficiencies and marketing effectiveness.  Of those currently using TM (most with select brands), it is showing positive results in market share, revenue growth, ROI and distribution.

Throughout the panel, all three presenters appeared to be in agreement that implementing a successful Total Market strategy required strong leadership, from the CMO, CSO, or President.  Williams observed: “With the CMO as the lead in moving this forward, the issue of multicultural markets stops being worked as a narrow silo and the topics become elevated to a business conversation across all business units.”   Santiago agreed:  “With the right leadership, businesses are able to target every group driving the growth of the business. Strong leadership at the C-suite level allows for cross company alignment with benchmarks for reaching ethnic consumers in general market budgets.”  

Point #5:  Since TM strategy requires cross company commitment and action, if you want to successfully implement TM strategies, it usually requires strong leadership at CMO, CSO or President level.

During the Q&A, audience members questioned how to tackle the subject of Total Market strategies with companies who feel they are growing fine without addressing multicultural markets.  Santiago acknowledged that change management is challenging.  “It requires a strong collaborative working relationship among leaders, brand/product and segment management, as well as general market and multicultural agencies, all working toward the same business goals, held accountable for achieving those goals and collaborating with one another.”  Williams punctuated the discussion with a straightforward suggestion from the front lines:  “When I first started, I quantified how much multicultural market potential they had lost over the past five years by not having a strategy.  Those numbers were surprising and opened up a place to start the discussion.  Then I asked them what their ROI was on the “Doing Nothing” strategy.  I presented a plan for implementing a Total Market strategy and it finally made sense.  They had nothing to lose and it’s been growing ever since.”  

Point #6: TM strategies are not an easy sell, with some companies feeling they don’t need it or they are growing fine without it.  But with collaboration among key client-side marketers, their agencies and consultants -and with intelligence of what it costs to “do nothing”-the facts are compelling enough to start a discussion and move towards TM action and multicultural inclusion.    

While the definitive definition of Total Market strategies and the standards for its application have yet to be finalized, Santiago noted that the conversations and benchmarking on TM strategies would certainly continue, including a roundtable coalition of 10 ANA members currently at various stages of the Total Market journey and 10 AHAA members.  A more detailed definition and best practices recommendations, along with a full report from the AHAA Total Market Study are expected in 2014 at the AHAA Conference.  
 
About SSG

SSG is a strategy consultancy driven by management P&L experience and predictive analytics. We develop fact-based business models, growth roadmaps, insights and segmentations for the Total Market and the evolving Hispanics, Multicultural & Millennial segments. We help clients focus their limited resources where the highest market opportunities exist, and which strategies advance maximum, efficient Total Market growth.