Small Business Concierge, Spring Issue 2022

Market Study: Marketing to African Americans

By : Margaret A. Jackson, MBA|MBA Research Study | Market Study: Consumer Insights

Executive Summary

This paper explores and analyzes marketing to African Americans and outcomes and historical information that plays a role in considering marketing and advertising strategies. Marketing to African American people appears to be an ongoing challenge for marketers. It is not surprising since 86.1 percent of marketers are white managers and directors, relying on marketing data and consumer behaviors. They are hopeful of it, giving them a glimpse of how to market to the African Americans to develop loyal consumers. The overarching challenge is that white American marketers' blind-spot is not grasping how to genuinely understand black people, which creates brand loyalty and trust. Airbnb started by three white men disconnected from the realities of what would happen when posting a black face on their online platform, which led to easy discrimination. White privilege clouds the eyes of white America, and as a result, presumptions are made that inadvertently or overtly discriminate against black people.

Small Business Concierge Communications & Digital Media Corporation is owned and operated by an African American female that does not presume that African Americans will engage in business with the company because she is black. It is the opposite. The company’s CEO understands that winning black trust is a process and will take genuine engagement to earn African American consumer loyalty. The key findings included historical implications of the black experience in America, building relationships of trust, and black unity & storytelling. The market to attract African Americans with messaging that they identify with is ripe. The state of the culture, at this time, are black voices demanding to be heard and will not be silenced. 63% of blacks want to be an entrepreneur and pursue their passion. Marketing that message to the African American communities is an overwhelming market potential for the company. Business on the Edge is not marketing to the black business owner; it is marketing to the history and systemic plight of that black business owner. For example, the massacre and burning down of Black Wallstreet in 1921 by white Americans. Business on the Edge recognizes that supporting a black business means supporting a Black America’s Dream and not tolerating systemic racism. Marketing to African American business owners, entrepreneurs, and those pursuing their purpose boils down to “the mattering concept.” The mattering concept is a term coined specifically for this assessment’s executive summary. The African American people are not interested in being marketed to; they are interested in matter-ing. The word matter is defined by Oxford Lexico as “be of importance; have significance, (of a person) be important or influential” (Oxford Lexico, 2020). The most apparent recommendation to market to the African American minority group is to invest time and energy in what matters to them.

What matters to African Americans? Black history, the good, bad, and ugly matters, and they want the good of black heroes and sheroes celebrated, the bad of slavery acknowledged, and the ugly of systemic racism changed. Marketing this message will build trust and relationships with the African American community. Building unity through storytelling and respecting black men in places of honor as distinguished men rather than uneducated gang-banging monsters, criminals, and rapists and showcasing black women as strong, passionate women as educated professionals and leaders in the global community rather than portraying them as angry black women because they are passionate. Marketing to the African American minority group is beyond data and consumer behavior. It is about the connection between what matters to African Americans.

Business on the Edge, Inc selected the market segment African American businesses. The African American group is an attractive market to pursue because they are America's disadvantaged, relentlessly stereotyped by marketers. The group faces systemic racism and inequities every day. It is an opportunity to be a company that can come alongside them with mass media support, coupled with technical assistance, which may be the right mix to win them as loyal customers. Small Business Concierge Communications & Digital Media Corporation is led by an African American female who intimately understands the black plight and the yearning to pursue the God-given purpose despite a system that prefers to oppress Black America's potential for success. The market segment size of Black-owned businesses is more than two million business establishments in the United States

Market Size and Demographic: African American/Black Businesses Black-Owned Businesses in U.S. most recent –2007-2012 SBA Advocacy

Exhibit 3.1

An external coronavirus pandemic factor is a significant problem for black-owned businesses and their businesses’ survival. Black-owned businesses have been hit hard and severely impacted by the pandemic. Spending marketing dollars are not a high priority for black businesses since they are virtually nonexistent. The struggle to start and run a black-owned business is met with financial disparities and resources to thrive as a business. A pandemic adds to that struggle. “Preliminary data shows that African Americans have been disproportionately affected by infection and death rates from COVID-19 in the United States. Now, Black entrepreneurs say that the virus is killing their bottom lines, and the economic impact of the pandemic is pushing them out of business” (Newsone, 2020). “The Covid -19 economic shutdown has hurt African American businesses the most among racial and ethnic groups in U.S., with a 41% decline of black owners from February to April, a new study from the National Bureau of Economic Research shows. While the pandemic has hit entrepreneurs across the board, closing some 3.3 million small businesses at least temporarily, the sidelining of 440,000 African Americans was especially severe. Black owners may have fared worse because fewer of them operated in industries deemed “essential” during the pandemic, among other factors, according t o the NBER paper” (Bloomberg, 2020). The black marketplace is shrinking due to the coronavirus pandemic. Marketing to a community that struggles under normal circumstances will be hard -pressed and apprehensive about engaging in new products and services, especially marketing, advertising, and branding.

U.S. Census Bureau

124,004 41% -19.8% -17.6%

Exhibit 3.2

The final obstacle is to help solve black business challenges. The internal factor to market to this group is under research and development to solve black business challenges. The external factors weigh how to prepare to market to the African American business owner and internally designing a marketing model specific to underfunded African American businesses. This market segment group lacks supportive resources, access to capital, technical assistance, and business development tools to achieve sustainable business objectives. “It is important to note these funding gaps are not due to differential rates in Black firms applying for financing,” according to the report. “In fact, recent survey evidence indicates that Black-owned firms both employer and non-employer apply for financing at equal or higher rates than white-owned firms but are denied at higher rates.” (Baltimore Business Journal, 2020). The potential market size is large enough to pursue the market and possibly create a competitive advantage.

Market Potential Size (in millions)

African American Business Owners

Small Business Concierge

Membership $420.00 1-year total U.S. black business Market

Women in Business Membership $375.00 1-year

Men in Business Membership California Change in Business Ownership 28.6% of 3.7M

$840,000,000 $382,071,000 $698,184,480 $44,444,400

Exhibit 3.3

The African American external challenges and plights are not new to the world; how to market to a people that the greatest nation on the planet views as inferior and insignificant is the first challenge to overcome. Disparities are lurking on every turn, and the hope of starting and running a successful business has its own set of challenges for black America. The problem’s background does not begin with merely segmenting the market and then market to Black America. The problem begins with black America’s origins in this country and belief systems that drive their decision-making processes and choices. The slave mindset a thought that hinders progression within the black communities. Black American’s taking their rightful place in history, if acknowledged, is a game-changer for Black America.

The battle to overcome the persistent disparities and build, compete, equally, and equitably in American is to fight an inequitable system and demand change. Black business owners that overcome are the shoulders that other black-owned businesses can stand upon, learn from, and navigate to the American dream that was never intended for them to have or pursue. “But if business leaders can pool their resources, their resolve, and their clout, they can collectively turn their economic power into a force for equality and e set up to pursue, this moment calls for grander ambitions. What it requires is concerted action” (Forbes, 2020).

Literature Review

Marketing to minorities is a comprehension of consumer insight of cultures, values, influences, and acknowledging that they matter as consumers. Insensitive advertisement results from careless neglect to better understand the minority group that a company is attempting to attract as customers. “Marketing relies on consumer insights about cultural changes in order to discover new opportunities and abandon markets that have disappeared because of cultural changes. Marketing both influences and is influenced by culture by both promoting, reflecting, and reinforcing cultural values” (Schiffman, 2019p. 272). Marketing to minorities has had its flops over the years by marketing agencies. Here are a few ads that missed the mark.

Advertisements Implications

1. Mr. Clean “Mother’s Day”

2. Dove – “Before & After”

“ad from 2011 that the real work of a woman is cleaning the house”

“Dove completely missed the fact that they’re implying here that dark skin is dirty. This is an advertisement that shows discrimination, even if that wasn’t the message that Dove was trying to send. Unfortunately, the cosmetics brand made the same mistake again in 2017 with a commercial that showed an African American woman turning into a white one.”

3. Antonio Federici – “Submit to Temptation”

4. Renault – “The ‘N’ Word”

“Ice cream manufacturer Antonio Federici missed the mark when they mixed sexual and religious undertones in these inappropriate advertisements.”

“

In 2007, Renault thought that “the ‘N’ word” could mean “November.” It can’t. While the car company might not have meant anything insensitive, this particular phrase has a history that doesn’t lend itself to a double meaning. People were understandably outraged.”

5. Flora – “Uhh, Dad I’m Gay”

“This ad ran in South Africa and was meant to promote a brand of margarine called Flora. The message is that dads need a strong heart to deal with their son and daughter coming out. Members of the LGBTQ community were genuinely hurt by the offensive advertising campaigns.”

Exhibit 3.4 Quality Logo Products Blog, 12 Offensive Advertisements Your Business Can Learn From (Quality Logo Products Blog, 2020).

While it is essential to promote and advertise the company’s products to minority groups, it is equally important to be sensitive to what the message could inadvertently imply. Hollywood is notorious for insensitivities to diverse cultures. For example, the film Lone Ranger starring Johnny Depp, who plays Tonto, clearly an indigenous stereotype, and, by the way, indigenous people enjoyed the film. Marketing to minority groups prefers not to be offended by advertisements and expected to purchase the product.

Mitigating marketing whoops would mean adding diverse marketing profession als to the marketing and advertising team. Michael Jackson and Rhymefest wrote a song called Man in the Mirror. The song talks about making a change and starting with the man in the mirror.

“I’m starting with the man in the mirror

I’m asking him to change his ways

And no message could have been any clearer

If you want to make the world a better place

Take a look at yourself, and then make a change” (Man in the Mirror, 2008).

Marketing agencies must change their organizations that add diversity and inclusion in the workplace as marketing and advertising directors and managers grasp how to market to diverse groups of consumers. Moreover, they need hiring agencies to govern hiring minorities without bias. Otherwise, they may very well add water-down diversity rather than diverse populations free to be themselves in the workplace without discrimination.

Marketing to Minority and Diverse Segments

In an article, Maryville University addresses diversity and inclusion in modern advertising, stating, “Statistics show that America is becoming increasingly more diverse, as recent data reveals that growth among racial and ethnic minority populations outpaces that of Caucasians. It’s vital for modern marketers to know their audience, but they should also remember that diversity extends beyond race alone” (Maryville University, 2020). The article goes on to cite recent “a Newscred survey of U.S. Marketers found that more than 91% of U.S. marketers agree with the statement there is still room for growth in using more diverse images by marketers. It’s clear that most American companies have a diversity blindspot that may be impacting business growth potential” (Maryville University, 2020). 91% of marketers agree that using more diverse images is needed in marketing, but the change is slow. Why? An educated guess would infer that people who hold marketing roles are not from diverse backgrounds. According to the U.S. Bureau of Labor Statistics, 2019, Marketing and sales managers 86.1% percent of them are white, 6.1% are Black or African American, 5.6% are Asian, and 8.9% are Hispanic or Latino. Whites hold advertising and promotions managers positions: 89.5%, 0.7% are Black or African American, 7.0% are Asian, and 9.0% are Hispanic or Latino. Marketing to minority groups when they are not represented in the corporations and agencies that are developing marketing campaigns will continue to lag and be challenged on how to best market to minority segments and groups.

Marketing approaches vary and a deeper dive on connecting with diverse groups is a theme from Small Business Trends on “Effective Marketing Approaches Vary for Minority Groups” (Small Business Trends, 2003). “Businesses should use differing media and approaches to reach targeted minority audiences in marketing efforts according to Forrester Research Inc.

Advertising-media technology and message-effectiveness trends continue to develop differently for different ethnic and racial groups. A mail survey of 54,817 U.S. households has identified key trends in technology adoption, media consumption, and receptiveness to marketing among Asians, Blacks, English-speaking Hispanics, and Whites.

‘Marketers should take note. Understanding the differences among each group is critical to developing effective marketing campaigns,” said Jed Kolko, principal analyst at Forrester. “Our survey results show that there is more to reaching minorities than understanding demographic differences. Income, for instance, does not necessarily determine what technology someone invests in and what influences them to purchase it ’” (Small Business Trends, 2003).

American marketing and advertising organizations must be intentional in their messaging to market to diverse subcultures and minority groups. It can no longer tolerate commercials that advertise McDonald commercials with Hispanics and Blacks as the employees. Volkswagen apologizes for racist ad "Volkswagen pulled and apologized Thursday for a racist advertis ement posted on its Instagram page that a company official called “an insult to every decent person.” The 10-second clip depicted a pair of oversize white hands dragging a Black man away from a new VW Golf 8 sedan and flicking him violently into a restaurant called “Petit Colon,” a name with overtones of colonization" (Boston Globe Media, 2020). The marketing landscape changed and marketing to minority groups is intentionally mindful with in-depth insight into groups and genuinely interested in understanding them and their cultures. Loyal customers invest in committed companies that are genuinely wanting to serve them and genuinely want to understand their culture.

Marketing to African American Business Owners

Small Business Trends published an article about Author Pepper Miller, about her book Black Still Matters in Marketing, and how she examines the past five-years and changes on how to market to Blacks. “The author of Black Still Matters in Marketing starts off the book by examining the changes in the past five years, and asks two questions: Is Black consumer behavior much different from Whites? Is it now time to stop labeling, and perhaps limiting ourselves with race? After acknowledging the many changes, she concludes: ‘Black still matters in marketing.’ And then she goes on to explain that the book is not about “targeting” blacks in marketing, but rather about offering solutions to help marketers understand African Americans and comfortably frame messages to Black America.” (Small Business Trends, 2013). This paper’s common theme has been the evidence of marketers, primarily white 86.1% are challenged on how to best market to African Americans and other minority groups from framing messages to the actors in the messaging. As stated earlier in this paper, minority groups want to be respected and want marketers to want to know and appreciate their culture. It is not just about the marketing data, potential revenue, but rather about connecting to African Americans and their deep culture. “Take Miller’s point about connection, using a scene from the movie The Break Up to illustrate the point about recognizing culture and the nuances that can come with it

‘There is a scene in the 2006 movie The Break Up starring Vince Vaughn as Gary and Jennifer Aniston as Brooke, where we see the couple arguing. Gary won’t help Brooke with the dishes following a dinner party in which Brooke did all of the work. After several selfish reasons and snarky comments as to why he shouldn’t do the dishes, Gary reluctantly gives in. But Brooke backs up and declines his help and tells him, ‘I want you to want to do the dishes.’ I love that line and totally get it! It’s the same with connecting with Black America. No group wants to force another group to appreciate their culture and who they are they simply want that group to

want to appreciate it. Just like Brooke in the movie, it is a matter of respect more than actually doing.’” (Small Business Trends, 2013).

African American Small Business Market Potential

The African American market need to be engaged by opportunities but are often overlooked as not a viable black business owner. “In 2016, 1% of venture capital dollars went to Black and Latinx founders and that number has not swayed much to date. VCs are missing out on a trilliondollar opportunity*. Considering minority businesses produced approximately US $700b revenue in 2019, supporting these underserved entrepreneurs is a must to enrich and strengthen our economy and our communities” (EY, 2020). The pandemic stay in place (SIP) order has shutdown, 450K black nonessential businesses, it is more urgent to serve and help revive black businesses. Marketing business saving resources is critical to the businesses and the black communities. “Without equitable access, the future of many Black and Latinx-owned businesses and millions of jobs hangs in the balance. If action isn't taken, the overall impact will be significant. These companies won't scale thus reducing their potential to employ others and to create wealth and prosperity for the founders and their communities” (EY, 2020).

2020 Trends for Black Entrepreneurs surveyed by Guidant Financial and Small Business rends Alliance found the motivations for blacks wanting to open a business. 34% of blacks want to be their own boss and 29% of their reason response was “wanted to pursue your passion” (Guidant Financial, (2020)”. The phrase “pursue your passion” is a marketing opportunity to black entrepreneurs. The top three reasons can all be met with creative marketing that would appeal to black entrepreneurs.

Motivation for Opening A Business

Exhibit 3.5 “Motivation For Opening A Business” (Guidant Financial, 2020)

63% of blacks want to be an entrepreneur and pursue their passion. Marketing that message to the African American communities is an overwhelming market potential for Business on the Edge.

Recommendations

Culture matters. The slave and divisive history of America continue to impact Black Americans. A blurred history proudly states that America was founded upon freedom and not oppression. First, America was not founded; it was taken from the indigenous people. For the sake of this argument, it will state what was founded. Freedom in America was founded for Whites, and slavery was founded and established for Africans who are today’s Black American nation. The origins of the African American culture and the contributions paid by blacks in history matter. It matters how messaging is marketed due to that history, to the African American group.

Recommendation #1 Acknowledge & Respect Black History

The first recommendation is to acknowledge black history and apply it to the messaging as a change agent to support black business owners’ advancement in competing in the marketplace. “President Trump is weighing in on history, blasting the New York Times Magazine’s 1619 Project, which reframes America’s history by focusing on the consequences of slavery and contributions of Black Americans, and at the same time announcing the creation of a new “1776 commission” to reinstate “patriotism” in American schools. At a White House history conference Thursday, he said that the Times had defiled the story of America. ‘The left has warped, distorted, and defiled the American story with deceptions, falsehoods, and lies. There is no better example than the New York Times’ totally discredited 1619 Project,” Mr. Trump said at the event. “This project rewrites American history to teach our children that we were founded on the principle of oppression, not freedom’” (CBS NEWS, 2020). Oppressing the realities and facts of history undermines the progression of Black Americans. “Some of America’s Founding Fathers, like George Washington, James Madison, and Thomas Jefferson, were slave owners and whose properties depended on slave labor. Slavery was also enshrined in the Constitution with the three-fifths compromise, which said three-fifths of the slave population would be counted for the purpose of determining direct taxation and representation in the House of Representatives” (CBS NEWS, 2020).

Black Division: Slave Fighting

It is important to mention a cultural stigma, lightly touching upon the divisiveness within the race. Slaves were not taught unity but division throughout slave history. The divisiveness of slavery, albeit challenging to reference, there is an underlining or rather a subconscious concern with the initial engagement of black-on-black commerce. The impact of slavery taught black people to distrust each other, as white slave owners pitted black slaves against each other. Although this may seem unrelated to black Americans’ marketing, one could argue that the divide and conquer mindset divides the black nation into 2020. “While slaves in the U.S. could be called upon to perform for their owners’ forms of entertainment, such as singing and dancing, male slaves also had the arduous task of fighting for the masters. Fights involving bare knuckles were arranged by the slave owners for their physically imposing slaves on the same farm to determine who was the strongest. Those who endure and beat the other enslaved are pitted against champions of the other plantations” (Face2Face Africa, 2019). The point is that black America’s belief system is met with caution when engaging with each other, and black business owners do not automatically open the door to doing business with another black just because they are black. Building trust is a more complicated experience and process. It cannot be glazed over if the company will engage and market to black business owners successfully.

Recommendation #2 Build Relationships of Trust

The second recommendation is to build relationships of trust. When marketing to Black American business owners, it will be imperative to gain Black America's trust, including trusting and purchasing from other Black business owners. However, once won, then they are more likely to become loyal customers. Black Americans prefer to buy an established brand and not any brand but top brands. "Generally, the consumption of African Americans consumers is a function of their social standing rather than ethnicity. Nevertheless, compared with all American consumers, African Americans consumers prefer leading brands, are brand loyal, and are unlikely to purchase private-label and generic products" (Schiffman, 2019p 298). Business on the Edge will have to overcome being a new private label when marketing to Black American business owners. The company must showcase the product as a top-of-the-line digital magazine, and black-owned businesses are appreciated and understood.

Recommendation #3 Black Unity & Storytelling

The third recommendation is to support black unity, cultural pride, and celebrating the black entrepreneurial heroes’ history that advanced America’s black race. The remembering of their names and their businesses. Bridget “Biddy” Masons born a slave 1818-1891, fought for her freedom in California after her Master moved from Texas to California. She won her freedom and her children’s freedom. She was a nurse, midwife and real estate investor; before her death in the 1800s, she built a wealth of over $300K in 2020, she would be worth $6,188,523.81. “Biddy Mason was a southern slave who become free after she moved with her masters to California. She built a career in Los Angeles as a nurse and a midwife, bought a piece of property, and used her business skills to become one of the wealthiest black women in the United States after the Civil War, as well as a notable philanthropist” (Browse Biography, 2011). The power of storytelling can inspire today’s black entrepreneurs to pursue their dreams and become black business owners.

Business on the Edge will be the chief storytelling. The company is marketing a message of hope, black America’s American dream, carving out a new path for tomorrow’s history standing on black change agents’ shoulders. Madam C. J. Walker hair care products for black women, Dr. Martin Luther King Jr., that had a dream, Jan Matzelinger innovator and manufacturing mogul, General Colin Powell, and many others that remind us that culture matters. The company will use an online platform design for easy access to media products and cultivate black market followers. In addition to marketing a message of building strong black entrepreneurs and encouraging the rebuilding of Black Wall Street in the top Designated Market Area (DMA) in the United States, New York, Chicago, Dallas, San Francisco/Bay Area, and Los Angeles.

Rank

Market Name State Representing TV Homes 1 New York NY 7,100,300 representing 6.441% of U.S. 2 Los Angeles CA 10,826,600 representing 4.786% of U.S. 3 Chicago IL 7,738,00 representing 2.949% of U.S. 4 Philadelphia PA 5,981,900 representing 2.555 of U.S. 5 Dallas-Ft. Worth TX 4,838,600 representing 2.378 % of the U.S.

Summary

In conclusion, Business on the Edge is not marketing to the black business owner; it is marketing to the history and systemic plight of that black business owner. Business on the Edge recognizes that supporting a black business means supporting a Black America’s Dream and not tolerating systemic racism. The rebuilding of Black Wall Street, the broken educational system, the building of financial intelligence, innovation in science and technology, and the freedom to dream big with black and brown skin. The company is marketing to future change in America’s land that can be home of all minority groups without fear of oppressive and abusive attacks. Black-owned businesses competing healthy in the marketplace is an opportunity for non-blacks to engage in businesses that are an essential part of the fabric of who and what shapes America, which is diversity.

Building trust means watching out for unintended marketing pitfalls. “Airbnb's early design choices were aimed at facilitating a user's trust both in the platform and fellow use rs, but some of those choices had the unintended consequence of enabling discrimination. For example, when it launched in 2008, would-be guests' names and profile pictures were prominent on Airbnb requests that hosts saw prior to booking. This design was in contrast to existing platforms such as eBay, where images of products dominated pages and users remained anonymous. At the time, Chesky was quoted as saying: ‘Access is built on trust, and trust is built on transparency. When you remove anonymity, it brings out the best in people. We believe anonymity has no place in the future of Airbnb or the sharing economy.’ But as it turned out, putting users' photos front and center made discrimination easier, according to Luca's research” (Forbes, 2020). Business on the Edge must be mindful that the African American market segment is one of three minority and subculture groups it will market its products and services. Which means while building trust with marketing to African Americans, trust must extend to all potential customer groups.

Storytelling is a magnificently wonderful tool to use in marketing. “An art. Not a process, method, or technique. Storytelling is described as an art … the “art” of storytelling. And like art it requires creativity, vision, skill, and practice. Storytelling isn’t something you can grasp in one sitting, after one course. It’s a trial-and-error process of mastery. Sounds like a lot of work, right? It is, and rightfully so because storytelling has become a crucial component of the most successful marketing campaigns. It sets apart vibrant brands from simple businesses and loyal consumers from one-time, stop-in shoppers” (Hubspot, 2018).

Storytelling is an opportunity to take stories and connect them to the fabric of African American culture and black businesses. It is stories that make a nation proud like Chadwick Bosman, the Black Panther, and Wakanda Forever etched in the black nation’s hearts. The story of the Avenger that quietly fought a secret battle with cancer and lost. The internet is flooded with tshirts, sneakers, hoodies, jackets, blankets artwork of the black man King T’Challa of Wakanda, the Black Panther’s memory will live on in the hearts of the black nation.

The most powerful tool in the marketing and advertising arsenal for Business on the Edge is storytelling. The black nation stolen, captured, warred against by African tribes, and sold to a people that stripped them of their identity, pride, kingship, and queenship. Stories that restore African Americans to a place of dignity, respect, and ability to take their rightful place in America will develop confidence and trust in a company's products and services that share their story.

References

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