Over the past decade, the distribution of household incomes has shifted so much that a much larger proportion of consumers now earns significantly higher-than-average incomes--while still falling short of being truly rich. As a result, what used to be a no man's land for new product introductions has in many categories become an extremely profitable "new middle ground." How can marketers capitalize on this new territory? The key, say the authors, is to rethink the positioning and design of offerings and the ways they can be brought to market. Procter & Gamble, for instance, redefined the positioning map for tooth-whitening solutions by offering its $35 Whitestrips. P&G wisely positioned itself between the $400 bleaching technique that dental centers popularized and $2 to $8 whitening toothpaste. In product categories where the middle ground is already populated, it's important for companies to design or redesign offerings to compete. An example is the Polo shirt. How do you sell a man yet another one after he's bought every color he wants? Add some features, and call it a golf shirt. Here, marketers have introduced designs based on the concept of "occasional use" to stand out. Finally, companies wishing to reach the almost rich can change how they go to market. Consider Target Stores, which has pioneered a focus the company itself characterizes as upscale discount. The strategy has made Target an everyday shopping phenomenon among well-heeled urbanites and prosperous professionals.
Marketers have masterfully targeted the middle class and the very rich, but a breed of consumer is flying under their radar--those who aren't truly wealthy but still rank in the top 20% of earners. Three tactics can help companies reach the "almost rich."
Jill Hoover was looking skyward, marveling at the heart-stopping beauty of Paradise Park-Seattle's newest attraction, its tallest and scariest roller coaster to date: the Anaconda. "Quite impressive," Jill thought. But a scuffle in the ride queue quickly brought the CEO of Paradise Parks back to earth. The company's 19 seasonal and year-round amusement parks had always been popular--ever since Jill's father founded the original Paradise Park just after the Second World War--but they hadn't been very profitable of late. Operating costs had been spiraling, and every dollar of extra revenue had been hard won. At the company's annual management off-site meeting, held that morning at the Seattle park, CFO Nathan Cortland proposed that Paradise offer its customers the option of a "preferred guest" card. Cardholders would pay more, but they would get first crack at the rides--entering through separate lines--and would get seated immediately at any of the parks' restaurants. According to Nathan, the plan would bolster Paradise's sagging finances because it would target the "mass affluents"--a rising demographic of moneyed but time-pressed people who might visit the park more often and spend more if it weren't for long lines at the rides. Jill respects Nathan's idea--but hasn't her plan to upgrade some of the parks' souvenir shops to gift boutiques already shown some promise? And doesn't Nathan's plan smack of elitism, as Jill's longtime friend and park manager Adam Goodwin suggests? The CEO has resolved to get back to Nathan with a decision about "Operation Upmarket" by the time she leaves Seattle and returns to headquarters. Should Paradise Parks offer guests different levels of service? In R0110A and R0110Z, John Harrington, Edward Goldman, Alexander Labak, and Robert Crandall offer their advice in this fictional case study.
Jill Hoover was looking skyward, marveling at the heart-stopping beauty of Paradise Park-Seattle's newest attraction, its tallest and scariest roller coaster to date: the Anaconda. "Quite impressive," Jill thought. But a scuffle in the ride queue quickly brought the CEO of Paradise Parks back to earth. The company's 19 seasonal and year-round amusement parks had always been popular--ever since Jill's father founded the original Paradise Park just after the Second World War--but they hadn't been very profitable of late. Operating costs had been spiraling, and every dollar of extra revenue had been hard won. At the company's annual management off-site meeting, held that morning at the Seattle park, CFO Nathan Cortland proposed that Paradise offer its customers the option of a "preferred guest" card. Cardholders would pay more, but they would get first crack at the rides--entering through separate lines--and would get seated immediately at any of the parks' restaurants. According to Nathan, the plan would bolster Paradise's sagging finances because it would target the "mass affluents"--a rising demographic of moneyed but time-pressed people who might visit the park more often and spend more if it weren't for long lines at the rides. Jill respects Nathan's idea--but hasn't her plan to upgrade some of the parks' souvenir shops to gift boutiques already shown some promise? And doesn't Nathan's plan smack of elitism, as Jill's longtime friend and park manager Adam Goodwin suggests? The CEO has resolved to get back to Nathan with a decision about "Operation Upmarket" by the time she leaves Seattle and returns to headquarters. Should Paradise Parks offer guests different levels of service? In R0110A and R0110Z, John Harrington, Edward Goldman, Alexander Labak, Robert Crandall, offer their advice on this fictional case study.
Jill Hoover was looking skyward, marveling at the heart-stopping beauty of Paradise Park-Seattle's newest attraction, its tallest and scariest roller coaster to date: the Anaconda. "Quite impressive," Jill thought. But a scuffle in the ride queue quickly brought the CEO of Paradise Parks back to earth. The company's 19 seasonal and year-round amusement parks had always been popular--ever since Jill's father founded the original Paradise Park just after the Second World War--but they hadn't been very profitable of late. Operating costs had been spiraling, and every dollar of extra revenue had been hard won. At the company's annual management off-site meeting, held that morning at the Seattle park, CFO Nathan Cortland proposed that Paradise offer its customers the option of a "preferred guest" card. Cardholders would pay more, but they would get first crack at the rides--entering through separate lines--and would get seated immediately at any of the parks' restaurants. According to Nathan, the plan would bolster Paradise's sagging finances because it would target the "mass affluents"--a rising demographic of moneyed but time-pressed people who might visit the park more often and spend more if it weren't for long lines at the rides. Jill respects Nathan's idea--but hasn't her plan to upgrade some of the parks' souvenir shops to gift boutiques already shown some promise? And doesn't Nathan's plan smack of elitism, as Jill's longtime friend and park manager Adam Goodwin suggests? The CEO has resolved to get back to Nathan with a decision about "Operation Upmarket" by the time she leaves Seattle and returns to headquarters. Should Paradise Parks offer guests different levels of service? In R0110A and R0110Z, John Harrington, Edward Goldman, Alexander Labak, and Robert Crandall offer their advice on this fictional case study.