Luxury Consumers Exhibit New Confidence

Affluent consumer confidence had a strong upturn in the third quarter, according to an on-going tracking survey of luxury consumers by PMP author, Pam Danziger.  As a result, luxury consumers picked up their pace of shopping in the past quarter, with luxury spending up 25.8 percent over last quarter.  This according to Unity Marketing's Luxury Tracking Survey conducted October 9-15, 2012 among 1,289 affluent consumers (avg. income $290.6k; avg. age 44 years.)

"The first half of 2012 showed affluent consumers restrained in spending on luxury goods and services, but spending rebounded strongly in the third quarter survey,"  Pam Danziger, president of Unity Marketing and author of Putting the Luxe Back in Luxury:  How new consumer values are redefining the way we market luxury.  "Over half (52 percent) of affluent consumer surveyed feel they are financially better off today than twelve months ago; this measure hasn't been this high since 1Q2011.  Rising even more sharply is the percentage of luxury consumers who feel the country as a whole is doing better now as compared with three months ago.  Some 37 percent of affluent surveyed feel the country is now moving in the right direction, up 15 percentage points from last quarter," Danziger reports.

Rising affluent consumer confidence is sparking a pick up in spending on luxuries, with these categories posting the strongest quarter-over-quarter increase:

• Luxury clothing and apparel, with spending up 95.2 percent over second quarter;
• Luxury kitchenware and cooks' tools, up 83.1 percent;
• Luxury beauty, cosmetics, fragrances, up 75.4 percent;
• Luxury dining, up 67.7 percent; and
• Luxury fashion accessories, up 52.2 percent.

"Throughout 2011 and 2012, we have seen luxury consumer spending mostly on a downward trajectory, with their feelings of consumer confidence as measured by the Luxury Consumption Index (LCI) wavering over the same period.  Finally in the latest survey, we see a strong measure of growing confidence which should give marketers from high-end to mid-market a boost.  After all the affluent consumers we survey are the economy's 'heavy-lifters,' accounting for only 20 percent of U.S. households but over 40 percent of all consumer spending,"  Danziger explains.

Unity Marketing has been calculating the LCI since first quarter 2004 based upon five key measures of luxury consumer confidence including their expectations for future spending on luxury, their personal financial conditions and their overall assessment of the economy as a whole, in surveys conducted every three months among over 1,200 affluent luxury consumers.  This quarter's luxury tracking survey, conducted from October 9-15, 2012, took the measure of 1,289 luxury consumers (average income $290.6k; avg. age 44 years; median net worth $797k.)

Viewing General Media Doesn't Mean Abandoning Ethnic Media

Many marketers believe that if their target audience uses the general media, their messages do not need to appear in media that are targeted to specific ethnic audiences. PMP author, Pepper Miller, disagrees.

In her recently released book, Black Still Matters in Marketing, Miller writes "African Americans, both young and old are seeking and developing deeper connections with people like them in both online and offline media environments. Black Americans use general market media, but embrace Black media. Being comfortable with diverse media does not mean the abandonment of Black media. It's not one or the other, but both. [Media that targets multicultural consumers] means showing overtly that you are seeking a connection to particular consumer groups in their native settings, social media networks, and through their preferred entertainment."

Miller and the co-author of the chapter on Black media, Kevin Walker, CEO of CultureLab suggest specific TV channels and online blogs and portals that speak to Black Americans.

Black Still Matters in Marketing is found at the PMP website as well as on Amazon and through other booksellers.

Guidelines for PR with the New Media

Among other very useful items in Teneshia Jackson Warner's just-released book, Profit with Purpose: A Marketer's guide to Delivering Purpose-Driven Campaigns to Multicultural Audiences, are seven steps for dealing with the new media scene.

The first is one that is timely and timeless, no matter what medium you are approaching with a public relations campaign. "Make it easy for reporters," writes Jackson Warner. "Journalists, like everyone, are hard pressed for time and the easier you make it for a reporter to write a story, the better your chances of clinching the deal."

2. Buy an iPhone and/or an iPad. With the media creating content for these platforms, you need to be personally familiar with them.

3. Don't pitch via social media. Eighty percent of journalists prefer to be contacted through email.

4.  Media outlets want more than just text. They're looking for pictures and video too.

5.  Get to know journalists on social media platforms. Follow their Tweets. But unless you know them personally don't 'friend' them on Facebook.

6. Pitch the TV newsroom between eight and nine in the morning, if possible, to precede the daily staff meeting. Unless it's breaking news, pitch your story a few days or a week ahead of time. TV journalists also want to speak to real people using your product, not just a CEO or spokesperson.

7. The old rules for pitching still apply. Just because social media has rocked the boat doesn't mean it's a different boat. Hold fast to the traditional etiquete of introduction first and questions later.

Among other reader benefits, Profit with Purpose has hundreds of tips for dealing with celebrity endorsements, choosing partners to promote your purpose, and includes a guide to the causes with which specific  celebrities are involved.

Click on the links above for a special money-saving offer on this new title.

Danziger's Luxury Consumption Index Shows Decline in Confidence of Affluents

Confidence in the country is also slowing

In the third quarter 2012 luxury consumers got nervous about their financial status, causing Unity Marketing's exclusive Luxury Consumption Index (LCI), which measures affluent consumer confidence, to plummet.  The LCI has proven a reliable leading economic indicator not just to the luxury consumer market, but the overall U.S. economy.

Along with the drop in the LCI, luxury consumers cut back their level of luxury spending during the second quarter (April-June) by 8.2 percent from first quarter.  The decline in spending was even more pronounced comparing year-over-year, down 26.9 percent.

Author Pamela Danziger (Putting the Luxe Back in Luxury)  points to the recent quarterly release by leather goods maker Coach Inc (COH.N) as an example of a brand that seriously overestimated HENRY customers' willingness to spend.  Coach tried to eliminate coupon promotions tied directly to its discount outlets, which are the company's biggest source of revenue, and which attract HENRY customers looking to stretch their dollars.  This mistep led to Coach reporting weak same store sales growth in the quarter ending June 30, which then caused its stock to have its worst day on Wall Street since the 9/11 attacks.

"The number of people willing and able to pay a premium for luxury brands, like Coach, is getting smaller as this weak economy continues.  Our latest survey reveals that the affluent consumers believe things are only going to get worse, before they get better,"  Danziger cautions.

In analysis of the latest downward slide in the LCI, Thomas Bodenberg, Unity Marketing's chief consumer economist, explains, "Several months back, market pundits told us that the 2007-2009 recession had run its course, and that it was only a matter of time before this event would have diffused into the consumer economy.  However, this is NOT the case, borne out by consumer sentiment. Two factors are dominant:  first is the interconnectedness of our global economy, as economic turmoil in Europe readily translates into uncertainty here. The second looming factor is the upcoming election, whose results will either drive or inhibit consumer sentiment and willingness to purchase."

Unity Marketing has been calculating the LCI since first quarter 2004 based upon five key measures of luxury consumer confidence including their expectations for future spending on luxury, their personal financial conditions and their overall assessment of the economy as a whole, in surveys conducted every three months among over 1,200 affluent luxury consumers.  This quarter's luxury tracking survey, conducted from July 6- 13 2012, took the measure of 1,271 luxury consumers (average income $274.8k; avg. age 44.8 years; median net worth $817k.)

>>Of special interest to political watchers:
This quarter the measure of the LCI that dropped the most was luxury consumer confidence in the direction of the country overall.  Nearly one-third of the affluents surveyed believe the country is worse off now than it was three months ago.

Pepper Miller Shares Insights with M2W audience

For the second time, PMP author, Pepper Miller, President of The Hunter-Miller Group was voted best speaker by the standing-room-only audience of the 8th annual M2W conference in April 2012 at the Chicago Cultural Center. She also earned the award in 2005.

Pepper is the co-author of What's Black About It and author of the newly released,  Black STILL Matters in Marketing.

In her presentation about what it means to be a Black woman in America today, she stressed that "Different is not Deficient."

Highlights included:

1. The definition of the Black family is changing: Seventy-three percent of all Black births are to single moms, but that doesn't mean they are bad moms.
2. A new generation of young, single, accomplished and childless Black women are breaking stereotypes about Black women today.
3. Many Black women are delaying or foregoing childbearing. In 2008, 39 percent of Black women aged 20 to 34 had no children compared with 34 percent of childless Black women in 2003.
4. The internet is not necessarily an equalizer. Although Black women are all over the internet, they tend to congregate and share their stories in relevant online communities that make up the powerful, yet under-the-radar, Black social network and blogosphere. 

Marketers who want to take advantage of these trends need to understand how to speak to Black women and where to find them. Pepper Miller's latest book, Black Still Matters in Marketing, addresses questions of respect and approach, and provides a detailed list of some of the best blogs and other media where marketers can appeal to both male and female customers.

On making the award to Pepper, Nan McCann, producer of M2W, said, "Once again, Pepper eloquently and compellingly presented insights on Black women that could be game changers for anyone charged with creating successful outcomes in any commercial, political or social enterprise. As one attendee wrote in an exit survey, 'She really brought the message home.'"

More information on the conference is available by visiting www.m2w.biz.

Why being "uncomfortable" may make you a better marketer

In the introduction to her new book, Black STILL Matters in Marketing, Pepper Miller comments on the need to be open to differences among customers, especially when you are trying to find real insights about your clientele.

Here is an excerpt from Pepper's introduction:

Real insights are more than light bulb moments. They are gleaned
from opening up to people and situations that are completely different
from our own. Experience is still the best teacher—more than reading
or hearing about something.

Sometimes we have to embrace being uncomfortable to become comfortable
with one another. I learned this with my first intern. I was open
to working with him but I have to admit, I was also a little bit leery.
“How is a person who just landed from China (literally) albeit an
MBA candidate, with good English language and computer skills going
to work on Black consumer trends?” I asked myself.

Thankfully my apprehension quickly faded after our first conversation.
We were both excited. We immediately began to talk about cultural differences
(with interest). I shared examples of Black nuances that helped
shape successful marketing campaigns, and he shared his experiences
with Black acquaintances. Later he told me that he had questions that
he wanted to ask of his acquaintances (to get to know them better
and understand the culture) but was afraid of being labeled insensitive,
stupid, or a racist.

Sometimes, we are the creators of the “class system” that we despise.
We refuse to walk in others’ shoes, to attempt to see the world through
their eyes. Instead, we try to force people to be more like us, to think
like us. It is not something done maliciously. Many don’t even realize
what they are doing.

I’ve worked with a couple of clients who had products that were
targeted to mid-to-lower-income customers. In those cases, African
Americans represented a significant percentage of their businesses. We
talked with this segment in focus groups and one-on-one interviews
to learn about their needs, and when the customers spoke in their colloquial
language and told stories about their lifestyle that didn’t fit with
the clients’ upscale attitudes, the client was turned off.

These marketers proceeded to craft marketing and advertising that
totally ignored the language, stories, and lifestyles that research had
shown to exist. And marketers wonder why their messages aren’t resonating
with different groups.

Is your cost cutting leading to low employee morale?

Chris Wirthwein,  CEO of 5MetaCom, a technical and scientific marketing agency, and the author of Brand Busters, writes in the spring 2012 issue of Marketing Management that marketers should not fall into the trap of  believing that lowering prices will sell more product.

He cites several examples, also explained in his book, of products that are sold at a premium price because they have intrinsic value to the customer. He argues that discounts or lower prices have to be considered in the context of profit margins, but also in the context of other effects within a company.

It seems to us that he has an important point when he writes that a more insidious loss than even the obvious one of revenue is "the effect price cuts can have on everything from employee morale to customer service. When the focus becomes all about cutting the price, employees can become so driven on cutting things out that they lose sight of the things customers appreciate."

Focused on cost cutting, "companies may forget that they have to invest in research, marketing, merchandising, and customer service innovations, all of which help to sustain a brand and a business." 

Andrea Syverson:Tips for rising above the competition

MultiChannel Merchant recently published an article by Andrea Syverson, author of BrandAbout!, with four creative ways to rise above the competition.

1. Tell the stories of your iconic brands.
2. Involve customers in all you do.
3. Keep to a core message for the brand.
4. Tether your customers to your employees.

As usual, Andrea gives excellent examples from a diverse group of companies.  Click here to see the entire article.

Is it Marketing or Advertising

We aren't trying to pick on Stuart Elliott, advertising columnist at the New York Times, but we noticed an interesting headline, in Tuesday, Feb. 21st's column, Marketing Budgets Rise for Some Giants.

For the most part, the article discusses how much more money some consumer products companies will be spending in 2012 on advertising of all types. Most of our authors who are experts in marketing and market research would tell you that money spent on advertising in social media, print media, on television and radio is not marketing. Marketing and market research is what should come before advertising spending decisions are made, and after the advertising money has been spent to see if the campaigns were effective.

What seems to be a problem is that companies and journalists (especially headline writers) often confuse advertising and marketing, assuming they are one and the same.  Companies may budget for marketing when what they are really doing is budgeting for advertising without getting the fundamental research they need to make the best decisions about how to spend their advertising dollars.

M. Isabel Valdes and the experts who collaborated with her on the book, WIN! the Hispanic Market argue that too little is spent on market research about Hispanics to validate advertising decisions. They also say that much of the Hispanic market passes through the "leaky bucket," with companies not aware of the actual size of the market, again because inadequate resources are allocated to gathering the data needed.

Similarly, in her forthcoming book, Black Still Matters in Marketing, Pepper Miller says that much of the research conducted on Blacks is not relevant because researchers don't bother to go where Black consumers are.

It would be helpful if the terms advertising and marketing were not used interchangeably in the C-suite and the boardroom. Then executives would be able to better understand what their dollars are going for and why they are sometimes not being spent effectively.

Non-Hispanic managers need to "get it"

The mission of PMP's latest release, WIN! the Hispanic Market: Strategies for Business Growth, is to alert corporate managers and investors to the coming power of the Hispanic market, both in numbers and consumer spending. It also focuses on the concern that consumer market research and data collection in corporations does not record many sales to Hispanics and therefore, corporate managers often do not appreciate just how much of their market is multicultural.

The book's author, M. Isabel Valdes, is a strong proponent of high quality market research as well as taking an in-culture approach to marketing. She believes marketing in-culture is essential to winning "share of heart" among Hispanics. The contributions to the book of 19 strategic, data, and marketing research experts support her beliefs with cogent examples and suggestions of how data collection can be improved.

The sad thing, from our point of view, is that most of the early orders for this book are coming from Hispanic managers. The good thing is that the book should help these ethnic managers "sell" their point of view within the companies they work for. But wouldn't it be great if non-Hispanic white managers took the initiative to learn more about this important growing market and how to appeal to it to grow their businesses in the United States?

Our authors have much to teach us

On a very personal note: The multicultural titles we publish at Paramount Market Publishing are usually written by members of the segment they are writing about, whether they refer to themselves as Hispanic, Latino, Black, or African-American.

As a White editor, who grew up in a largely Caucasian environment, I find myself profoundly grateful for the insights these authors provide for us. This is especially important in the multicultural world that is now the United States.

Although some people are extraordinarily uncomfortable with the U.S. as a multicultural society, what we learn from our authors is that the values of other ethnic and racial groups are, for the most part, similar to our own. They believe in the importance of respecting each other and other cultures. They want their children to have a good education and find opportunities for advancement in our world.

They love their families and want the best for them. And, they want the media to respect their cultures and share good news about their groups as well as the disappointments.

And, they provide these insights in their books in an authentic, non-judgemental way. They don't whine and complain about the treatment they receive by some other members of our society, but they also don't shy away from topics such as racism that hold them back from their dreams and aspirations.

Coming up in the first quarter of this year, we have some exceptional books from two of our bestselling authors, M. Isabel Valdes and Pepper Miller. You won't want to miss them. And in the second quarter, we'll hear from two new (to us) authors, Teneshia Jackson-Warner and Jeff Burns Jr.

More about the subjects covered by those new authors later. But in the meantime, take advantage of what you can learn from all of our multicultural authors by going here.