MASS MARKETING

Mass marketing is a marketing approach in which the
marketer addresses all segments of the market as though
they are the same. The approach results in a single marketing
plan with the same mix of product, price, promotion,
and place strategies for the entire market.
The appeal of mass marketing is in the potential for
higher total profits. Companies that employ the system
expect the larger profit to result from (1) expanded volume
through lower prices and (2) reduced costs through
economies of scale made possible by the increased volume.
In order for the system to work, however, certain conditions
must exist. One is that the product must have broad
appeal and a few features that distinguish it from competing
products. Another is that it must lend itself to mass
production. In addition, the opportunity must exist, and
the marketer must have the ability to communicate and
distribute to the aggregate market.

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

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 509
Meeting Management
Coca-Cola’s market share through changes in product and
targeted promotion strategy. In the 1940s, television provided
a powerful tool for both new and old companies to
reach segmented markets. By the 1960s, market segmentation
had surpassed mass marketing as the primary
approach.
MASS MARKETING NOW AND IN
THE FUTURE
In spite of the shift to market segmentation, mass marketing
continues to be used in many situations and has
potential for others. Products with broad appeal and few
distinguishing characteristics, such as household cleaners,
potato chips, and pain relievers, lend themselves to mass
marketing just as they always have. At the same time,
businesses that use mass marketing for their goods and
services continue to look for ways to enlarge their markets
by designing different appeals for noncustomers. Chewing
gum, for example, is presented as an alternative to smoking.
Utilities and credit cards offer special rates to entice
potential high-volume customers, while discount retailers,
such as Wal-Mart, match their mix of mass-marketed
products to local customer bases.
Any product that has mass-marketable attributes will
likely be marketed by some form of the approach. In addition,
the Internet provides a new medium for mass-marketing
initiatives, and newly opened international markets offer a possible arena for mass-marketing opportunities