Is there a case to be made for marketing consumer packaged goods to the lesbian, gay, bisexual, and transgender community (LGBT)? Do the resources devoted to targeting this particular audience really pay off?
In a discussion at the 2005 "Reaching Out" conference held in Boston on February 5th, a group of panelists from the consumer packaged goods (CPG) industry shared their experiences on the internal and external challenges of marketing to gay and lesbian consumers. The conference was organized by gay and lesbian students at Harvard Business School, MIT Sloan School of Management, and Yale School of Management.
Gary Osifchin, a brand manager at SC Johnson, said his company is good at talking about diversity from a business perspective. "It all ties back into the bottom line. It's about reaching out to diverse consumers and making sure that you have a sound business rationale for doing so." The difficulty lies in the lack of available research. "You don't have the typical data that you have for other targets," noted Osifchin. "I know that in Glade aerosols I have a $2.2 million share gap opportunity among the Hispanic population of air freshener buyers and a $2.8 million opportunity among African American consumers. I can take numbers like that to management."
It's important that a company have clear internal policies in place on equality and non-discrimination in the workplace before approaching the gay and lesbian community, he added. SCJ did that, and then moved into the LGBT market slowly through conference and benefit sponsorships and product sampling.
Billy Lagor (HBS MBA '03), a marketing director at Hasbro, said there is no LGBT marketing involved in his current position—"Our consumers are five years old," he quipped. But he did work at Procter & Gamble for five years, where they crafted their strategy by considering a product's marketing challenges and targeting the "alpha consumer," who sometimes happened to be gay. When it comes to certain health, fashion, and beauty products—such as Crest White Strips, which P&G advertised in Out magazine—the LGBT market can be a convincing target.
| It is something that is scary, but not to be feared. |
| — Matt Tumminello, Target Ten |
In the competitive CPG market, everyone is hoping to gain even the slightest edge, said Matt Tumminello, president of the public relations and marketing firm Target Ten. While he agreed that there's little available data on the buying habits of gay and lesbian consumers, companies can get creative by simply looking at indicators for certain products. For example, Target Ten client Johnson & Johnson deduced that the LGBT community would be a good target for their Tylenol P.M. product. Travel and an urban environment are two leading causes of sleeplessness, said Tumminello, and the gay and lesbian population tends to travel more than the general population and live in cities.
It's important to find internal advocates for a campaign before attempting to formally sell it to management, said Tiyale Hayes, a consumer and market knowledge manager for Procter & Gamble.
"It's like pre-selling—planting the seeds," she said. Once you've made your case and have the advocacy in place for it, you can build a business proposition behind it."
What about consumer backlash against gay and lesbian marketing? asked moderator Bill Bean, a general management consultant. One of his clients is somewhat hesitant to target the LGBT market given the polarized climate of society today.
"It is something that is scary, but not to be feared," said Tumminello. "You need a commitment from the top that the company is not going to back down. The worst thing you can do is start an initiative and pull it. People did that in the '90s, but I don't think it's happening anymore. The reality is that the train has left the station. When companies look at consumers, there is the gay and lesbian community on one side and on the other the guy who says, 'God hates fags'. It's a no-brainer."
Hayes of Procter & Gamble cited the American Family Association's current boycott of Crest and Tide due to the company's recent support for the repeal of a Cincinnati law that denies equal protection of homosexual rights. "The company has had one consistent response throughout," he said. "First, we are about attracting and retaining the best talent. So we can't endorse a law that would hinder that on any level. Second, we are about building new business. Wherever new markets are, that's where we are."
"If you want to be successful, you have to target," stated Tumminello. Gay- and lesbian-oriented magazines may reach a smaller audience, but the value of advertising in them is immense.
"If an ad runs in People magazine, no one mentions it. But if a fabulous lesbian ad runs in print or on television, you and your friends will probably discuss it over dinner. Can you imagine, having a group of people talk about your ad for three or four minutes? You have to educate people about that difference." 