Mass Affluence: Seven New Rules of Marketing to Today's Consumer

Rating:
Summary: A ground-breaking, seminal work
Review: A collaboration between Paul F. Nunes (Executive Research Fellow at the Accenture Institute for High Performance Business in Wellesley, Massachusetts) and Brian A. Johnson (Senior Research analyst at the New York City based investment research and management firm of Sanford C. Bernstein & Company), Mass Affluence: 7 New Rules Of Marketing To Today's Consumer reveals that there is a pendulum swing in marketing from "one-to-one" customer strategies back to mass marketing. But there's a problem -- Today's more affluent but cautious consumers aren't responding to the strategies that worked with their middle-class predecessors. Mass Affluence lays out seven new rules of mass marketing specifically directed for use with the increasingly affluent populace and shows how innovative companies are implementing these novel strategies with high-end products that fill a heretofore ignored middle-ground in ordinary product categories ranging from clothing, to oral care, to house hold cleaning, and more. A ground-breaking, seminal work, Mass Affluence should be considered mandatory reading by any corporate manager charged with the responsibility of marketing his company's services or products in today's increasingly volatile, global, and competitive marketplace.


Rating:
Summary: A Marketing Book Than Can Make a Difference
Review: It's not just the rich who are getting richer; it's also a broad swath of some 22 million U.S. households who have gained significant levels of wealth, income and discretionary spending over the past 30 years. In a meticulously well-researched and well-written marketing best seller, researchers Paul Nunes and Brian Johnson document the phenomenon of mass affluence. They then describe the tremendous opportunities marketers have in crafting innovative new products and services to serve the top 20 percent of households that have some 60 percent of the nation's discretionary spending power.

The timing of this important work could not be better for retailers and brands struggling to increase share and margins in a Darwinian marketplace. I've been involved in consumer marketing for more than twenty years and I've seen only a handful of marketing books that can really make a difference. "Mass Affluence" is one of them. We were so impressed with the book that we bought copies for all our associates. I highly recommend it.


Rating:
Summary: Lead, Follow, or Get Out of the Customer's Way
Review: Nunes and Johnson help to increase our understanding of an especially powerful trend in contemporary marketing: creating or increasing demand for customized products or services which have been mass produced primarily for affluent consumers. This is a complicated subject in that, as recent research clearly indicates, many of these same products and services also appeal to less affluent consumers. This is precisely what Michael Silverstein and Neil Fiske discuss in Trading Up: The New American Luxury in which they refer to "products and services which possess higher levels of quality, taste, and [key word] aspiration than [other] goods in the [same] category but are not so expensive as to be out of reach...[trading up to products and services which] sell at much higher prices than conventional goods and in much higher volumes than traditional luxury goods and, as a result, have soared into previously uncharted territory high above the familiar price-volume demand curve." According to Nunes and Johnson, what is needed is "an approach that considers the facts about mass affluence and delivers a comprehensive view of how companies can change their marketing strategies to capture the value created from greater consumer affluence. That is why we wrote this book; that's what we're attempting to provide."

Indeed they do, and with discipline and eloquence. Their material is carefully organized within four Parts: The New Rules of Positioning, The New Rules of Designing Offerings, The New Rules of Customer Reach, and then a final section which responds to the question "What's Next?" Then in their Epilogue, Nunes and Johnson share their observations and suggestions with regard to "Reenvisioning an Industry" (i.e. the jewelry and watch business), applying to it the "seven new rules of mass marketing" previously introduced and discussed in the first chapter.

Long ago, Warren Buffett suggested that price is what we charge and value is what the buyer thinks it's worth. I was reminded of that as I read Part One in which Nunes and Johnson explain "The New Rules of Marketing." These are not their rules nor are they even rules per se. Rather, they are strategies which the competitive marketplace has already determined are more appropriate to new realties. For example:

Old Rule: Avoid middle-market positions between low-cost and premium.

New Rule: Seize the new-middle-ground position, above the rest of the conventional offerings and below the ultrapremium solutions. (Please see Figure 2-1 on page 33.)

Old Rule: Produce less-expensive versions of luxuries to sell to the masses.

New Rule: Introduce new models of ownership that make a wealthy lifestyle, and even real luxuries, affordable to the masses.

According to Nunes and Johnson, traditional mass marketers can "play by the new rules" (i.e. can capture the spending of the moneyed masses) without sacrificing the former core mass market. How? Give customers the chance to spend more by offering new premium versions, adding on product upgrades and differentiated service levels to existing offerings. Also, honor customers with the recognition they desire by creating status levels that richly reward willing-to-spend customers in all of the ways they wish to be recognized. Also, offer the right price to each customer by using effective pricing to achieve differential margins based on qualities that aren't intrinsic to the offering. Customers may not always be right but, ultimately, their perceptions ARE market realities. They are asking different kinds of questions now. For example, "What does this [watch, handbag, dress, set of golf clubs, etc.] say about me?" Moreover, they are less concerned about a luxury item's purchase price than they are about ROI which includes enhanced self-esteem in their own eyes as well as in others'. New realities do indeed require different (if not "new") strategies by which to respond to them. Nunes and Johnson offer several in this book, anchoring each within a context of relevant information and appropriate examples. Well-done!

Those who share my high regard for this book are urged to check out James H. Gilmore and B. Joseph Pine's Markets of One: Creating Customer-Unique Value through Mass Customization, the aforementioned Trading Up, James B. Twitchell's Living It Up: America's Love Affair with Luxury, Virginia Postrel's The Substance of Style: How the Rise of Aesthetic Value Is Remaking Commerce, Culture, and Consciousness, Gerald Zaltman's How Customers Think: Essential Insights into the Mind of the Market, Joseph Epstein's Snobbery: The American Version, and Bill Stinnett's Think Like Your Customer: A Winning Strategy to Maximize Sales By Understanding and Influencing How and Why Your Customers Buy.

Rating:
Summary: Not How...But Why Starbucks a Success
Review: There are no lack of books on the market talking about affluent marketing, however Mass Affluence goes beyond a simple recitation of case histories and delves into the functional statistical realities that are driving today's Frapuccino fixation. Mssrs. Nunes and Johnson have a clear and articulate "voice" that takes very dry statistics and make them easily understood and accesible for today's marketers.

Pity the retailers and manufacturers that don't read and absorb these new fundamental truths behind why Starbucks is selling so many cups of coffee. While America has become enamored of darker roast coffees, the real fact is that their are incrementally more Americans able to afford a $4.00 cup of joe with a little carmel squirt and a dollop of whip cream.

Clear, consice, logical and well-presented, Mass Affluence is an empirical study on the shifting of American demographics and a guideline to changing how marketers approach bringing their wares to market.

Seldom have stats been used to make a more compelling arguement in such a readible way. Logic and intelligence combine to make Mass Affluence a compelling read.