Friday, June 03, 2005

Follow up on my Hip Hop Marketing comment below

Hip hop is truly a veritable force for marketers to be reckoned with. Hip Hop culture pervades our society on so many levels. If you notice, most new cars have rims at least 16-17 inch in diameter. Now, I'm not saying that Hip Hop culture is the sole cause of this. However, surely big rims, dubs, daytons, etc. have pushed the envelope of how big rims can go. Arguably, auto racing motorsports have pushed larger rims, but not to the sizes we see today.

But, the whole image of Hip Hop has revolutionized everything from fashion, automobiles, to design. If you watch MTV , VH1, BET , and other programs, they have many Hip Hop influenced threads throughout their programming.

Marketers need to stand at attention. However, and more importantly, companies in all industries need to become aware that segmenting out target markets with Hip Hop elements can prove very fruitful to their ability to capture new customers.

I think as we move forward, we will see an incredible amount of "niche markets" being successfully exploited and developed. This means new opportunity for new businesses. Small businesses tend to be significantly more agile and responsive than larger businesses. Less than ten (10) years ago, hip hop culture was just starting to come up as a force of influence. Now, it pervades many aspects of everyone's life. What has happend with hip hop on a macro scale is the example of what is going to happen on a more micro, niche oriented scale.

Some of my supporting reasons for my "niche markets" claim include:

1. The internet. The internet is incredible in its scope and power. It can truly change the world, and has. Get a computer in the hands of a Citizen of a Communist country, and they will see, through the internet, that their Communist way is not the best. The internet, thus, will allow more and more companies to market their products to more and more segmented niches for a lower and lower cost.

Shoot, TV advertising is losing its luster and effectiveness with the advent of TiVo. Not to mention that men aged 18-24 spend more time online than they do in front of the tube, plasma, liquid crystal, or whatever you watch.

2. Trends of consumers. As the world becomes one global marketplace through various technologies, including the internet, there will be an increasing demand, by consumers, to have unique product that sets them apart. In many ways, it is beautiful how we are becoming one global marketplace. However, this globalization will somewhat sterilize the once-uniqueness of brands, and result for more uniqueness.

Recently I was reading how the demand/sales for pro-athlete footwear has gone down. Have consumers become numb to the marketing line of "If a pro wears it and endorses it, then I should too"?

3. In Seth Godin's book, "Purple Cow" book, he argues that all the big products that satisfies the whole nation and/or world are already here and done. We need to specialize, differentiate, and find niches to exploit. Stay focused on a niche, and screw the rest. If you can't conquer a market niche, what makes you think you can conquer the whole nation as a market? Maybe your product that you are married to isn't as good as you thought.

In visiting with a friend on this topic, he mentioned a story about a Q&A session Harley Davidson hosted at a recent trade show. Many of their avid, loyal fans questioned their marketing strategy and complained that Harley could get a lot more business if they'd quit solely targeting baby boomers and go after the whole motorcycle crowd. The senior executive for HD replied, "We haven't even converted 5% of the baby boomer market, let alone the rest of the motorcycle crowd!" Duh, there's a reason HD struggled until lately. Because they didn't have a target, niche market to exploit.

As an aside, baby boomers are a great opportunity. You have a market retiring with more money than any retirees previous, with more disposable income, longer life expectancy, and a higher level of health. All those attributes combined result in a very lucrative market with a lot of opportunity.

4. Technology, combined with globalization, will allow more products, produced in lower quantities, available to solve more unique problems. As more of the world converts to the web, the ease of inventors, entrepreneurs, and others will ease the connection of high-quality IP with a capable manufacture in a developing country to manufacture the product.

You can see that the basic thrust of my argument is that technology, namely the internet, is going to further revolutionize the consumer, how they live, and what products they buy. As such, figuring out a way to create more unique, niche oriented products can open an enormous window of opportunity for entrepreneurs, visionaries, and business.

Thursday, June 02, 2005

My Rant on GM

I'm sure most of you know that GM, and Ford's, credit rating has been downgraded to Junk. Surprise, Surprise!! As a somewhat avid automobile enthusiast, alright, I'm an addict, but don't even start me on Subarus, seeing their credit score plummet through the floor is no surprise. I think the problem can be directed to a few causes.

1. Uninspiring design. Seriously, who thinks the new Chevy Malibu is a smash hit? Fleet cars, here we come!!! Again. And what about the incredibly hideous, almost on par with the Asstek, Uplander . Until GM beefs up its design, they ain't goin' nowhere. Cadillac simply can't carry the whole company. (At least they are moving in the right direction by removing their underperforming brands like Oldsmobile.

2. Too much overhead. Now, I'll admit, I haven't pored over their financials, however, GM spends in excess of $3 billion a year on advertisements. That's advertisements alone. OK, now I understand that they are the World's Largest Automobile Manufacturer, but come on, that's $3.5 billion trying to push crappy product on a consumer that won't buy it. Not to mention the current ad campaign pushing the 1 million+ people that rely on GM (retirees included) for an income. But, if they have 1 million relying on them, maybe the problem was developing long before now. Management just failed to figure things out.

But, alas, the U.S. government will probably bail out the Big 3, or 2, if necessary. Though, Bush recently said that he wouldn't help because "the big 3 need to learn how to compete with the competition" (this is paraphrased, as I can't find the article where I read this). But, and I can't remember where I read this, over 10% of the U.S. population's jobs rely on the automotive industry. Which means that the Government, for sake of national security, would probably do something to help out the ailing big 2. At a minimum, Kudos to Chrysler for having such a successful smash with their 300C and Magnum. I mean, this stuff is bling, it's even showing up in Rap videos.

All together now, "Hip hop culture is here to stay and a veritable force for fashion, trends, and lifestyle." At least most marketers are now realizing this.