Consumer report: if you think you know your target market, think again

Entrepreneur, May, 1997 by Gayle Sato Stodder

He was Joe Average; she was Jane Doe. They lived in a traditional nuclear family and watched "Laverne & Shirley" for laughs. They thought disco was hip and computers were for nerds. And they believed there was such a thing as the right brand of dishwashing liquid or the correct kind of car. They were typical American consumers - and back in 1977, the world of business still believed in them.

But a funny thing happened on the way to 1997. We discovered we were not a nation of typical citizens with common market needs and a one-size-fits-all identity. We were large-sized women and single dads, ethnic minorities, yuppies and slackers, affluent seniors, savvy teens, gourmet coffee drinkers, self-made millionaires and burnouts seeking lives of voluntary simplicity. Instead of assuming that one "head of household" - presumably a man - was calling all the shots on purchases, businesses learned to recognize the considerable economic muscle of women and children.

As we discovered this diversity, we also found the technology to differentiate ourselves. Enter the age of target marketing, with computers to track our incomes, lifestyles and spending habits. Though niche marketing had already dawned in the '70s, in the '80s and '90s, it not only changed the landscape of American business, but it also changed the way consumers viewed themselves. Joe Average and Jane Doe are now history. In 1997, the typical American consumer has a name, a life and a laundry list of particular needs. And in the future, say experts, consumers will demand even greater recognition of their individuality.

None of this is to say that broad societal trends have been absent these past two decades. On the contrary, Americans are now older, wiser, hipper and more exacting than ever, thanks to the forces of time and technology. As we look back on the past 20 years of consumerdom - and forward to the decades to come - it's clear that the only constant will be change. Welcome to the kingdom of the new, improved American consumer.

* WOMEN AT WORK

In 1997, it's news to no one that women are working. The trend that began with the women's movement of the '60s is now an inescapable reality. According to the Bureau of Labor Statistics, some 59 percent of women participate in the paid work force today, compared to 48 percent in 1977.

Though most of us take working women for granted, their impact on society can't be underestimated. For one thing, increased economic power means women consumers can no longer be marginalized.

"When I started working with big companies [in the '70s], they looked at women as relevant mainly as purchasers of domestic items," says marketing and trends consultant Judith Langer of Langer Associates Inc. in New York City. "Now it's recognized that women play vital roles in all kinds of purchases. Even in the high-tech [industry], which is skewed toward men, companies can't afford to ignore the needs of women."

What do women need from your business? Try respect and courtesy without condescension. And since more and more households are headed by two wage-earners - or single women and men - time is the ultimate commodity.

"Today, no matter how little money you have, you have more money than time," says marketing guru Martha Rogers, co-author with Don Peppers of Enterprise One to One: Tools for Competing in the Interactive Age (Doubleday/Currency) and co-founder of Stamford, Connecticut-based Marketing 1:1 Inc. "People accept that they have to spend money [to acquire things], but spending time is another matter."

Dual-income couples have spawned another contemporary phenomenon: the economically powerful kid. According to New York City market research firm Packaged Facts, children aged 5 to 14 spend an estimated $16.7 billion and influence the spending of another $150 billion annually. Packaged Facts reports that children today are increasingly independent, entrusted with a range of family responsibilities, and encouraged to participate in family buying decisions.

The same applies to teens. Teenage Research Unlimited in Northbrook, Illinois, estimates teens aged 12 to 19 spent $70 billion of their own money and another $33 billion of family money in 1996.

* TRADING IN STEREOTYPES

Though the youth market certainly existed in 1977, the assumption was that kids and teens were essentially broke, financially irresponsible, and dependent on their parents to make purchasing decisions. Kids today may indeed differ from their '70s counterparts, but that's only part of the story. Businesses understand the youth market more clearly than they did 20 years ago. Where marketers once relied on stereotypes to influence their decisions, they're now looking at actual attitudes and behavior.

A parallel shift has taken place with other "specialty" markets. In 1977, for example, the stereotypical older American lived on a modest fixed income. Today, we know that seniors are likely to have as much discretionary income as their working children, if not more.

In the past, minority markets also fell victim to faulty assumptions. One of these was that marketing to racial and ethnic minorities required no special effort. Another was that the minority market could be lumped into one big demographic blob. Upon closer inspection, neither of these notions proved true.