Mass Marketing

Mass Marketing, targeting a large percentage of the relevant population as purchasers of a particular product or service.The size of the market depends on the nature of the product sold and the goals of the company. Typically, mass marketers want to sell in a range between half the relevant population and everyone.

The history of photography offers a good example of the mass‐marketing process. In 1877, when George Eastman purchased his first picture‐taking equipment at a cost of some fifty‐five dollars, photography was a mysterious art demanding chemical knowledge, mechanical ability, and a considerable sum of money. Photographers were either professional portraitists or serious amateurs. Few Americans had ever taken a picture or mastered the technical processes of developing and printing. Eastman set out to eliminate these financial and technical hurdles by devising photographic methods that were simple and cheap. As he did so, however, he discovered that barriers related to consumer behavior remained. Finding a less than enthusiastic response to his innovations, he concluded that “in order to make a large business we would have to reach the general public and create a new class of patrons.” Eastman consciously “created” a mass market for his camera and film. He intensively distributed his product, simplified it so that a child could use it, advertised it widely, and—most importantly—slashed the price. The Kodak Brownie camera sold in 1900 for one dollar and film for fifteen cents. By the time of Eastman's death in 1932, cameras and photography had become ubiquitous features of American mass culture.

Eastman's story contains within it many of the elements that defined mass marketing from the late nineteenth century through the 1960s. These elements include the vision of the mass market; the willingness to sacrifice profit margin for volume; and the preconditions, in terms of income, logistics, and psychology, for the creation of a receptive market.

Vision.

Without the belief that a product will have a broad appeal, there would be no mass marketing. When mass marketing began in earnest in the United States, that belief did not grow from systematic market research. Instead it came from entrepreneurs' sense of what people wanted. Thus, Eastman intuitively grasped that people would like to take pictures. When they did not respond at first, he coaxed them with persuasive advertising. Such visionary mass marketers have played a vital role in American business history. Henry J. Heinz (1844–1916) knew people really wanted his pickles, relishes, and beans in cans or jars. He went bankrupt in the 1870s seeking to mass market his products but tried again in the 1880s with happier results. Henry Ford felt the same way about the automobile. The American people wanted and deserved the benefits of automotive transport, he was convinced. Therefore the fact that the first two companies with which he was associated failed was merely an historical accident. Only after such failures and at a relatively advanced age did Ford produce his first Model T in 1908. Through this product, Ford became the most important mass marketer in the twentieth century. He put a high‐quality automobile within the reach of a theretofore‐unimaginably large market.

Visionary mass marketers enabled millions of Americans to purchase products and services undreamed of when mass marketing began in the 1880s. These include all the apparatuses of kitchen and bathroom, of home entertainment, and, in recent years, personal computers. They also include air travel, telephones, and financial investment services.

Margin and Volume.

The willingness and, indeed, the insistence on selling many units of a product and making money on volume, rather than selling fewer units and making money on the margin between cost and selling price, is an exceptionally difficult decision to make and sustain. Mass marketers sometimes have made decisions that seem contrary to the logic of the profit system. Henry Ford, for example, continuously cut the price of the Model T. As he did, demand skyrocketed. Even when demand exceeded supply, Ford permitted shortages to occur rather than raise prices. This seemed economically irrational but illustrates the commitment to low prices that is a crucial element in mass marketing.

Preconditions.

America would have had no mass marketing without mass consumption. Mass consumption required a population with enough wealth to purchase the products being marketed, the means to deliver these products to their purchasers, and the desire to buy. All these existed in the United States by the 1880s. After a devastating Civil War and a deep depression in the 1870s, America's economic and political life by the 1880s had achieved a level of stability allowing for increased consumption. The producers of expensive consumer durables developed time‐payment programs, placing their products within reach of ever‐widening circles of consumers. But economic well being was not constant. The overall trend toward greater mass purchasing power was punctuated by periodic collapses. When those occurred, as in the 1930s, the mass market, especially for expensive consumer durables, quickly shrunk in size.

A second essential precondition is logistics. The United States is a continental nation of over three million square miles. For a mass market to arise, goods had to be transported and business information transmitted at affordable prices. The railroads and the telegraph initially made this possible.

A third precondition for the mass‐marketing revolution was that Americans had to harbor “wants” that exceeded their “needs” for survival such as food, clothing, and shelter. People had to feel that they deserved consumer products, that they would be happier owning them, and that they could afford them. A socialist once deplored “the damned wantlessness of the poor.” Thanks to a deep‐rooted national ideology of personal fulfillment summed up in the resonant phrase “the pursuit of happiness,” and powerfully reinforced by advertising, “wantlessness” has not been a problem in the United States.

Marketing Segmentation.

Perhaps the most important trend in marketing in the later twentieth century was the rise of market segmentation and the relative decline of mass marketing. Market segmentation sought to divide a market in a multitude of ways—the most common being demographic (age, income, and education) and psychographic (lifestyle). Market segmentation permitted price customization. For example, an airline that charged the same fare for every seat of a jumbo jet might be thought of as following a “mass market” approach to travel. The same airplane with three classes (first class, business, and tourist) has segmented its service in accord with customers' willingness to pay and has thus made possible higher revenues.

With the spread of personal computers, the Internet, and other new information technologies at the end of the twentieth century, most observers envisioned a data‐rich environment, in which products could be customized to individual taste, giving currency to the phrase “mass customization.” Simultaneously, however, this era saw the rise of such giant firms as Wal‐Mart that used information technology to build a mass market through low prices. Thus, predictions of mass customization must be viewed with caution. Mass marketing remained a vital part of the American economy as the century ended.
See also Automotive Industry; Consumer Culture; Department Stores; Gilded Age; Internet and World Wide Web; Mass Production; McDonald's; Shopping Centers and Malls.

Bibliography

Alfred D. Chandler Jr. , The Visible Hand: The Managerial Revolution in American Business, 1977.
David A. Hounshell , From the American System to Mass Production, 1800–1932: The Development of Manufacturing Technology in the United States, 1984.
Alfred D. Chandler Jr.,, Thomas K. McCraw,, and and Richard S. Tedlow , Management, Past and Present: A Casebook on the History of American Business, 1996.
Robert J. Dolan and and Hermann Simon , Power Pricing: How Managing Price Transforms the Bottom Line, 1996.
Richard S. Tedlow , New and Improved: The Story of Mass Marketing, 1996.

Richard Tedlow