To Organize or Not to Organize Around a Multicultural Strategy

Jul 21, 2004

By Terry Soto

Sears, Roebuck and Co. announced on Friday in the Chicago Tribune that their multicultural marketing group will be disbanded and the individuals in the department will be reassigned to individual business units to handle multicultural marketing. The dissolution of what had been the stand-alone multicultural marketing group typifies the upheaval at Sears, which has been looking for ways to cut costs and become more nimble.

Several companies have experimented with multicultural marketing departments only to later break them up, with the assumption that each business line should be marketed to every customer. While this may seem a reasonable premise, for a number of reasons, few have found success after doing so:

  • Understanding the intricacies of segmentation is complex and time consuming. Brand teams rarely have the expertise, the resources or the focus required.

  • The turnover in brand teams is constant, making it difficult to create true expertise and on-going support for ethnic initiatives within the group.

  • Brand teams often believe they have insufficient dollars for their mainstream programs and are less likely to allocate sufficient multicultural marketing funds, even in the face of ethnic market size and consumption potential.

  • Brand teams are measured on quarterly results and seldom exercise the foresight or vision to think in investment terms to develop new segments.

  • Brand teams seldom talk to each other which creates organizational inefficiencies in research, inconsistent messaging, inconsistent voice and actions in the community, and less synergy overall.

On the other side of the coin, companies such as Kraft Foods have successfully created specialized marketing teams to support their organization across various disciplines, campuses, divisions and geographies. At Kraft Foods, Marketing Services (MS) is a collection of teams that work in Kraft’s business divisions supplying marketing strategies. The MS function has over 500 professionals located at Kraft’s division headquarters: Glenview, Illinois; Rye Brook/Tarrytown, New York; Madison, Wisconsin; and East Hanover, New Jersey.

MS is divided into nine consumer-related service areas, each offering a different expertise. The Ethnic Marketing area provides insight and direction for marketing and promoting to various ethnic markets, as well as coordinating and sponsoring ethnic events around the country. The business divisions depend on MS for consumer understanding and leading edge business ideas.

Moderator’s Comment: What organizational examples have you seen that are working successfully to target the U.S. multicultural marketplace? What have you
seen that has not worked? What do you think are critical success factors for organizing around a multicultural strategy? Why is all of this happening?

One has to wonder if Sears realizes just how much is riding on multicultural marketing. Hispanics, Asians and blacks now account for more than 25 percent
of the company’s sales and are likely to grow as a share because of the nation’s changing demographics.

It remains to be seen how much the organization will struggle with their multicultural initiatives with little coordination between divisions and no company
multicultural strategy. While Sears spokesman Chris Brathwaite said, “We’re taking multicultural marketing to the next level by making it part of the fabric of the overall organization,”
this is easier said than done without tremendous effort and unwavering commitment from its upper management. I question whether the dissolution of its Multicultural department
is unlikely to diminish the firm’s commitment and investment in multicultural markets.

Terry Soto – Moderator

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