We started this book by asking, “What will the New America look like?”
Now that we have shared information and insights that sheds light on that question, it is time to ask a second one
“What will new American business look like?”
How will it operate? What will its priorities be? We invited Victor Edozien of The Asaba Group to share his views. Victor, a seasoned strategy consultant, is originally from Nigeria. He holds undergraduate and graduate degrees in electrical engineering and geology from Syracuse University. Also, he studied business administration and management at University of Pittsburgh and University of California, Berkeley. He started his career as an engineer at United Technologies, where he was awarded a US patent. He then went to business school and joined the Ford Motor Company.
After Ford, he joined a Bain & Company consulting spin-off called The Lucas Group. This was a corporate strategy consulting practice focused on the needs of private equity funds and their portfolio companies. Here, he led numerous growth strategy engagements, which has led to substantial growth in revenue and profits for private equity investors and Fortune 500 clients. Recently Victor helped launched The Asaba Group, a strategy consulting practice focused on developing pragmatic winning growth strategies in the multicultural environment. The goal of The Asaba Group, located in Boston, is to help corporations, private equity investors and middle market companies enter and prosper in this new market.
How should a company find success in America’s growing multicultural markets?
That is a disarmingly simple question. Therefore, I will answer in an equally simple way.
A company should think about entering the new markets in essentially the same way it would think about entering a new market abroad. You begin by asking these strategic questions:
What are the relevant market segments? (Size and defining attributes)
What is your unique value proposition to these segments? How well do your products fit the needs of the target consumers?
What are the optimal channels to fulfil the requirements of the target segments?
Let us say you had decided to sell your products in Vietnam. How should you undertake your marketing efforts?
You would not simply go there with your same products, place advertisements in Vietnamese electronic media and magazines, and expect to succeed. You would most likely begin by asking the key strategic questions mentioned earlier. Yet, many American businesses approach ethnic markets without asking these same strategic questions. These businesses proceed by spending money and time placing ads. This is indicative of viewing ethnic markets as only a downstream tactical initiative.
Repeatedly, we see mid-level marketing and brand managers who are charged with making decisions about the ethnic markets without clear knowledge on how to approach these markets. These managers have defaulted to hiring ethnic advertising agencies and placing ads in what they have defined as “culturally relevant” media. Creative content is typically an African- American, Asian or Hispanic face in their ad. These, in most instances, maybe the same ads used in the mainstream media. With this done, it assumed that the job is done.
This approach reflects the prevalent attitude that ethnic marketing is really an afterthought – something that comes after your mainstream marketing efforts. The result? A number of non-strategic and uncoordinated efforts that get very little incremental revenues or build lasting customer loyalty. Non-strategic investments with little or no economic returns.
Let us return for a moment, think again, about how you would go into Vietnam, and try to achieve market success there. (The same questions might be asked about China, Eastern Europe or any emerging market.)
If you followed the current practices – hiring an ethnic-oriented agency, placing some ads – you would sell some product, because there is always latent demand in any market for products, which meet the needs of consumers. However, are these sales the true potential of the product? Would these practices get the sales and ROI you should expect from growing markets?
To achieve success you must find answers to the questions mentioned earlier:
What are my relevant market segments?
Remember that not every Vietnamese will buy your product. It is more likely that a target segment, perhaps two million Vietnamese, will potentially buy what you have to sell. They are your relevant market segment.
Then, taking things further, you can divide the potential two million target consumers. You may determine that there is a segment that will buy your premium product and another segment that will buy your value product.