Friday, June 10, 2005

Staggering Implications of Market Research Results for Black Businesses!

When Anita Diggs of Warner Books wanted to find out statistical information from the data collected about African Americans' buying habits, she realized that the information she wanted was nonexistent. Such a study has never been done in the African American communities and the information given to her had no value to her marketing plan. As a result of this shocking revelation, Anita, with others initiated a study to find out about the buying habits of African Americans. The study has started and is presently in progress and the shocking figures are coming in. Without the completion of this study, other observations have already hinted about the tremendous amount of buying power of the African Americans.
Results: From the figures just attained so far, African Americans spent $300 million buying books and over & $3 billion in buying computers and computer products in the past year. Evidence also suggested that Blacks do not buy books using the bestseller lists. African Americans buy books and products through the recommendation of a relative, a friend or a neighbor. Sixty five percent of books being published by the main stream publishing companies are of no interest to the Black communities according to Anita Diggs.
Value of Research: Many big businesses are able to attain figures of market research done by many independent organizations including the government to design their marketing strategies. When such information is not available, a lot of money is spent to collect such data. The value of this data is very important to sales and advertising managers. Without such information, marketing becomes a hit and run tactic and in most cases advertising money is wasted in a medium that may not be useful.
Scientific information carries the power of predictability of the behavior of consumers. Any wise marketing manager or advertising executive will direct marketing to mirror the results obtained from such research. For example, it will be very unwise to advertise in a newspaper in which Black people hardly ever read. Similarly, it will be a wrong business decision to ignore the buying power of African Americans.
Another interesting information fastly emerging from other observational studies is that the minority pool is getting larger and larger, and will eventually attain enormous economic power. Hispanics are joining hands with Blacks and tapping into the African American market. Some Asians are dissatisfied when not included in the minority pool because being a minority today finally has its value and economic power. For example, the panel discussion about the "Minority Publishers: Where is Everybody?" was sponsored by a women’s group and was centralized on African American issues. If we put all the minority groups together and also included women, then we have a majority with a giant political and economic power!
Implications of Research Results: Years ago African American businesses died in the processes of trying to get the word out since advertisement was and it is still very expensive on the mediums that are more effective. Those Black businesses unable to afford large advertisement money later disappeared into history. Today, things are different because the Internet becomes a giant equalizer against the monopoly created by big businesses. Any online business willing to work very hard with effective low cost promotions can start tapping very deep into the revenues of the market place. It does not take a giant company to develop and maintain an effective website to sell products to people. The most important issue however is to know how to reach those potential consumers in the African American communities. Better still, it is important to know how to get the attention of the buying middle class.
The Role of the African American Newspapers and Magazines: An effective communication pipeline connection must be constructed between the consumers and the sellers to help the Black dollars circulate in the Black communities. Black radio stations are fewer, and radio advertisement is generally expensive for small businesses. Years ago an observational study indicated that African Americans do not easily buy or embrace new products when advertised on Black radio stations except when such a product was associated with an event. Television advertisement is out of the question for small Black businesses except if done collectively in the case of exposition fairs. The only effective pipelines to consumers from sellers are the African American newspapers and magazines.
However, for those newspapers to be empowered in delivering sales information to the Black communities at large, they must be affordable and run parallel reports. For example, a newspaper serving the Black community no matter how small, can follow "a book review" section of the newspaper with a low cost classified or display advertisement section for publishers, authors and bookstores. Similarly, the same thing can be done for restaurants, gift stores, business services and the choices are endless. Such a relationship between the Black newspapers and booksellers or Black businesses will create an enormous economic empowerment for African Americans. It will also deliver valuable information to the Black community while small Black booksellers will be able to effectively tap into the $300 million book market. It was estimated that a Black newspaper with a good circulation can earn an additional $100,000 from each issue. This can be accomplished if a well designed and effective classified advertisement section is included in the paper or magazine and also on the Internet version of the same paper. Internet is very important to help market every newspaper today.
One of the biggest problems for Black businesses is the lack of information or statistical data to help market to Black communities. Another big obstacle is the high cost of newspaper advertisement. African American Magazines with national circulation like Ebony, Black Enterprises or some local magazines with impact into the Black communities can initiate low cost classified advertisements to help promote small Black businesses. It is a win-win situation for everybody. If the Black media and the Black small businesses can enter into such an alliance of helping each other, the future is very brilliant for small Black businesses.
For the alliance between Black media and Black small businesses to work effectively, the media must be ready to deliver the service cost effectively and the businesses must be ready to deliver quality services and products at competitive prices to the Black communities.
Also, the Internet has created an effective and cheaper way to communicate with the Black consumers. Based on market research, an average African American middle class home has one Internet accessible computer system. Black newspapers can now utilize their online websites to market to the Black communities and especially the Black middle class.
Although some business owners may want to worry about competition because of pipeline connections of businesses online. The present evidence suggests that online competition is insignificant for loss of revenue due to a very small number of traditional Black bookstores and websites marketing books to the Black communities. Even the big businesses are joining hands online and constructing pipelines to booster website traffic. Why should small Black businesses not utilize such strategies? The reality is, businesses making huge money selling to Black middle class and within the Black communities are not Black owned. In some situations such services have been detrimental to the Black communities because they took money out of the community and failed to invest within the same locale. Consequently, the big guy is getting bigger and the Black communities are economically dying. This has been the trend before the Internet services came into play. The competition is not between Black independent booksellers compared to the struggle against the big bookstores chains or other big businesses. With the new trend in e-commerce, if the Black newspapers refuse to combine their regular newspaper services with online services and market to the Black middle class, outsiders will retain control of the market and Black businesses will be at great loss. The time to make an impact is the time of a changing technology or changing trend. The time to reach Black and minority businesses and influence buying habits and impact Black buyers is now!
It is important to mention here that the poor Black communities are still detached from online marketing compared to Black middle class whom are already connected and making waves. The digital divide is not a racial issue as it is an economic issue regardless of race. If the Black businesses are able to aggressively tap and control the sales to Black middle class already controlled by the big businesses, this will be of great benefits to the dying inner cities. We see what has happened to the inner cities over the years and there is no evidence to believe the rescue team is coming from the outside into the Black communities. If Black businesses thrive, Black organizations will no longer have to rely on big businesses for sponsorship. They will turn to successful Black businesses to fund programs which will jump start the inner cities. As a result, such economic empowerment will cause the decline of racism of any kind. The central focus of racism is economics. Twenty years ago, there were very few television commercials featuring Blacks. Today almost every commercial on television features both African Americans, Hispanics and Asians. The reason is clear, the big guys with obnoxiously long cigars counting the dollars know where some of the money is coming from and will therefore be unwise not to market to such educated consumers.
Understanding the African Americans economic power and their buying habits will help small Black businesses to effectively aim their marketing strategies. But it will take more than just knowing the facts and figures as much as directing the operation of Black businesses to construct connection pipelines for economic empowerment in joint partnership with the Black media.
Remember a common African saying, "Who cares about what people think , as long as they do not have to feed me?" Economic empowerment of Black businesses can help to disconnect the pipeline of racism. The only reason we worry about being judged by the content of our character and hopefully not by skin color is the dependency on an unfair system. At the moment of economic empowerment, Blacks will seize the control of their destiny, just like other groups have done, at such time, ladies and gentlemen, we will have attained freedom at last!
Article by 'Yinka Vidal, Managing Editor, OUTCRY Magazine
As a result of this article and discussions with some Black businesses, www.smallbusinesses.com is constructing an online Black Wall Street. The site is currently listing Black businesses FREE in a process of constructing a connection pipeline between Black businesses across the nation and perhaps internationally as well. So if you have a unique product to sell online and do not have a website, list your business name, product, addresses, telephone and fax numbers, E-mail address and a brief description of the product or service for FREE. If you have a business with a website and it can benefit the Black community to know about your product or service, do not hesitate to list your URL with the site at: www.smallbusinesses.com/BlackPages.htm
Visit: www.smallbusinesses.com/bookstore.htm
In addition to the above, a national calender of events and book signing schedule will be posted. If you have any activity going on in your area or you have a book signing schedule any where in the nation, do not hesitate to send us not more than a half a page press release. These press releases will be posted free of charge. Report by 'Yinka Vidal
OUTCRY Magazine June Issue: Coverage of the Chicago Book Expo
smallbusinesses.com
Book Expo Press Report #1
OUTCRY Magazine

4 comments:

Demetairs said...

Great info! Now I'm not an " I told you so " type of person, but this information just validates the comment I posted on your previous blog about where books by African American authors are placed in the mega stores. African Americans have strong buying power and it's a matter of reaching the consumer. Being that I work in radio, it's no surprise that Black Radio is no help to small black owned businesses. The problem with black radio is it's no longer black owned. Sure you hear black music, but the decision makers are not black. Therefore, when you hear the morning shows, all you hear is a bunch of gossip. No one is promoting the many talented black authors that we have. But there are other avenues that can be used to get the word out i.e. word of mouth, the internet, and black magazines. I believe the report is right on point because I'm an avid reader and I don't consult the bestseller's list to decide what books I'm going to read ( and that's mainly because the bestseller's list rarely contains black authors). As I stated in your previous blog, we have to use the means that are availible to us and then the big boys will come knocking at the door trying to get a piece of the pie. Examples are plentiful. Look at how a lot of filmmakers are going around the major studios to get their films out to the public. Look at how Prince used the internet to sell his CDs and made that huge profit by cutting out the middle man. Again, it can be done with a creative effort. Kudos for posting this information. Black consumers wake up and realize the power that you posess! Use it wisely and don't take it lightly.

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