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Mass Marketing

THE EVOLUTION INTO MASS
MARKETING Mass Market
marketing segmentation
Mass marketing first emerged as a workable strategy in the
1880s. Prior to that time, local markets in the United
States were geographically isolated, few products had
brand recognition beyond their local area, and continuous Price Price
process technology had not yet come into its own. Profits
in the fragmented markets were based on a low
volume/high price strategy. Quantity Quantity
Between 1880 and 1890, several things occurred that
eliminated the barriers and enhanced the appeal of mass Supply
Demand
marketing. The railroad and telegraph systems were com-
pleted, thus providing the potential for nationwide distri-
bution and communication. Mass-production techniques Figure 1
and equipment were refined and adapted to a variety of
products. Additionally, the population was growing rap-
idly, the country was recovering from the Civil War, and
the largest depression in U.S. history until that time was
ending.
In general merchandise retailing, Sears and Montgomery
These favorable circumstances by themselves did not Ward developed a mass-marketing niche through mail
create mass marketing. Entrepreneurial vision, drive, order. Grocery retailer A&P, on the other hand, estab-
organization, and resources had to be added to implement lished its mass market through private branding and sys-
the strategy. From 1880 to 1920, early innovators in many tematic operation of multiple stores.
different industries stepped forward to seize the opportu- Mass marketers continued their domination in major
nity. Although the total number was relatively small—one
industries well into the 1960s. Many of them maintained
or a few per industry—the impact on the U.S. economy essentially the same mix, while others expanded their use
was enormous. Many of these pioneering marketers built of the strategy. Sears and Montgomery Ward, for example,
national reputations for their brands and companies that
added store retailing in the 1920s. In the 1930s, super-
continued into the early twenty-first century.
markets appeared with a different emphasis than previous
Two of the most widely recognized examples are
grocery retailers—national brands. Over the next several
Ford and Coca-Cola. Henry Ford applied the concept in decades, large discount stores came into prominence with
the automobile industry. His Model T was conceived and a format similar to the supermarkets.
marketed as a “universal” car that would meet the needs
of all buyers. By adopting mass-production techniques
and eliminating optional features, he was able to reduce THE EVOLUTION FROM MASS
costs and sell his product at an affordable price. The com- MARKETING
bination catapulted the Model T to the top of the mar- The successes of mass marketers led to the appearance of
ket. Asa Candler was equally successful at using mass an alternate approach to marketing. Potential competitors
marketing in the soft-drink industry. Like Ford, he also wanting a share of the large market had two options. One
viewed his product as being the only one that consumers was to replicate the organization, promotion, and distri-
needed. His initial mass-marketing efforts focused on an bution systems of the company that had created the mass
extensive national advertising campaign. As product market. The other was to go after a part of the market that
recognition grew, he established a network of bottling had unique needs by developing products specifically for
operations throughout the county to facilitate sales and them. For nearly all of the challengers, building an opera-
distribution. No product in history has matched Coca- tion to parallel that of an entrenched industry giant was
Cola’s total sales. not profitable or realistic. As a result, most of them gravi-
Other mass marketers of this era achieved success by tated to the more attractive market-segmentation
focusing on one aspect of the approach. Manufacturers approach. (Figure 1 shows the different demand curves for
such as Quaker Oats, Proctor and Gamble, and Eastman mass marketing and market segmentation.)
Kodak used refined mass-production techniques to estab- General Motors used market segmentation as early as
lish consistent product quality. Still other manufacturers, the 1920s when it produced different models for different
such as Singer Sewing Machine, developed integrated dis- groups of customers to compete with Ford. Pepsi made a
tribution systems to ensure reliable delivery to the market. series of attempts, beginning in the 1930s, to crack into

508 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION