I’d heard of the “bell curve” since junior high school. At that time I knew it as a distribution for grades in a school course. The middle of the bell curve ensured that roughly 80% of my classmates received a B or C grade. In the left hand tail of the curve, students received a D or F grade and on the right hand tail an A. Each tail represented about 10% of the class (please refer to Figure 1)
Years later I was contemplating how this bell curve notion seemed to apply to so many aspects of American (and Western) society in the post-war era. It seemed to go well beyond the grade distribution in a class. The 80% became the solid center of American society in many ways. From an economic perspective, the post war boom saw a rising middle class with increasing wealth and clout. We had a strong middle class (the bell curve) and the left and right hand tails showed poverty and wealth. During this period the American public education system became the envy of the world. We had great public schools for predominantly “average” students. We had few classes for children with special needs and few classes for gifted kids. Most kids were in a mix of average classes, with an occasional above or below average class for that troublesome or stimulating subject (for me it was math and history respectively).
I saw American air travel as mostly a coach class experience – inside the sweet-spot of the bell curve. At the time there were no discount carriers and only the truly rich could fly by private jet. Sears was where America shopped, with few discount stores and a limted range of high-end offerings
This notion seemed to apply to technology as well. Most homes had a 25” or so television set. There simply were no large or small screens. Most homes had a “mid-fidelity” stereo system complete with am/fm radio and a turntable. They likely acquired these items at the local stereo/electronics store that sold solid mid-range brands like GE, Sylvania and Sherwood. AM radio was the “left hand” tail of the bell curve with its low fidelity. A few audiophiles had high end stereo equipment, but they were few and far between. A friend’s father flew to Japan in 1978 to buy a special cartridge for his turntable. More than 30 years later it is still the talk of the neighborhood!
This bell curve trend was also obvious in media and entertainment. We had three and later four national television stations. If you lived in a rural area (the left hand tail of the curve) you maybe only got one or two. If you lived in a big city like New York or Chicago (the right hand tail of the curve) you got lucky with an extra two or three stations. This meant that if you ran into anyone in America, you likely had some TV channels in common, and even more likely a few shows in common too. Additionally, this meant most Americans got their daily news from a limited number of outlets – none of which catered much to a fringe audience. This was also the era of the big blockbuster movie. I think everyone I know saw “Butch Cassidy & the Sundance Kid,” “Papillion,” “ET” and “Raiders of the Lost Ark.”
But there were perhaps no greater manifestations of the bell curve notion than in retail and brand strategy. During this time, the most famous name in retailing was Sears. Any city of note had one. Sears was the place that America came to shop. Perhaps the most middle class American retail brand of all time. There were few discount stores on the left tail. On the right end of the tail was Tiffany & Co. Larger cities had maybe a few premium stores, but these were not where most people shopped.
From a brand perspective, we had perhaps the most iconic brand in the world – Coca Cola. And they sold, well, Coke. Sure there was Sprite and Fanta orange, but 80% or more of Americans viewed the brand as Coke. One ad campaign, on national television featuring one product could easily hit the 80% of American consumers that the Coke brand managers were trying to reach.
This paradigm worked well for most aspects of American society. In fact, it worked so well and was so easy to embrace that we for the most part failed to notice when it ceased being the primary paradigm for our society and culture. Sometime in the late 1980’s or early 1990’s, things changed. We moved into the era of the inverted bell curve (see Figure 2).
In the era of the inverted bell curve, many aspects of our society have shifted noticeably. From an economic perspective we are witnessing the hollowing out of the middle class. We have more poor in the left tail of the curve and more millionaires and billionaires in the right tail than ever before. In education we have mandated programs for children with special needs and entire schools and programs for gifted kids. The average students are now packed 50 to a classroom.
It’s no different with air travel. Those seeking a bargain have a range of disount carriers to choose from. Those seeking luxury in the air have never had more options. Meanwhile, the middle-class flier is wedged in like a sardine can in coach on a standard airline.
In technology we have tiny screens on our mobile devices and huge television sets at home. Nobody I know has a 25” TV screen anymore. We have MP3’s for music. They are low fidelity, low price and extremely portable on the left hand of the curve. We have 24-bit audio and $10,000 speakers on the right tail. In the middle, the CD is dying a slow painful death with year over year unit sales declining regularly. And good luck finding that local electronics store selling middle-quality products. It’s Best Buy or Wal-Mart on the left tail, and local “listening rooms” with equipment priced in the stratosphere on the right tail.
Our media has become more stratified than ever. Gone are the days of finding a TV show in common with a stranger from another part of the country. Heck, recently I couldn’t even find a channel in common with someone in my home town! Add in satellite radio, internet radio and TV and then try to reach that metaphorical 80% with one message on one channel!
But because we are marketers, nowhere has this change had more of an impact than at the retail and brand level. Sears, that once great bastion of American retailing savvy has its obituary written on an almost weekly basis. Instead we have Wal-Mart and the Dollar stores on the left of the curve servicing the price sensitive and retailers like Tiffany & Co. reporting record earnings on the right tail. The local mall is dying but niche specialty websites service every obscure product need imaginable.
And at the brand level, that most iconic and beloved American brand, Coca-Cola now has many flavors and variants of its core Coke product ranging from diet Coke, caffeine free coke, cherry Coke, vanilla Coke and many flavors of Fanta – orange, pineapple and even strawberry. But in addition, Coke now has a water division, a fruit juice division, an energy drink group. And they have to compete with a new coffee culture that is stronger than ever. Now try and have one television commercial touting one flavor of one product and see how much of that metaphorical 80% you can reach!
The net results of this paradigm shift away from the bell curve and towards the inverted bell curve have deep ramifications. It impacts go-to-market strategies, channel parity and challenges a host of marketing and advertising orthodoxy. It has deep implications for manufacturers, new product development and product managers. In my next installment, I will discuss the impact specifically on sales and marketing. We’ll cover the ramifications for manufacturers and product development folks after that.