The recent news stories regarding legal vs illegal immigration is overshadowing some basic numbers we need to understand...
From my email:
Hispanic Market Hits Tipping Point
Demo Accounts for One in Six U.S. Residents; Nearly Half Are at Ease in English
If you're looking to reach upholders of traditional American values, your best bet might be the Hispanic market.
The market is growing: The 2010 Census expected to count a record 50 million Hispanics, or one in every six U.S. residents, meaning the Hispanic population will have increased a stunning 42% from the previous census in 2000. (By comparison, the non-Hispanic population will have edged up just 5% in that decade.) It's also got scale: Hispanics are now the nation's second-largest consumer market after white non-Hispanics, who are still the largest group at about 200 million.
But perhaps the most remarkable aspect of Hispanics in America is how closely they exemplify our idealized concept of 1950s America. They are young (their median age is about where the whole nation was in 1955) and more often live in large, traditional, married-with-children families with lots of participation from grandparents.
More often than not, according to data from the Bureau of Labor Statistics, they eat family meals at home, and spend less than average on alcohol. They're moving to the suburbs, tend to be community-oriented, and have high aspirations for their children. In short, they are the sweet market for consumer goods and services that the entire nation used to be when baby boomers were young.
Hispanic children are overwhelmingly U.S. born. Fully 91% of Hispanic children were born in the U.S., compared to only 47% of Hispanic adults, which has great implications for the demographic's speed of acculturation. With the Hispanic market at this tipping point, one of the biggest challenges for marketers is reaching young, acculturated bilingual Hispanics who behave differently than their parents who didn't grow up in the U.S. and don't spend as much time with Spanish-language media, but still feel a deep sense of Latino identity.
More than 1 in 3 Hispanics in the U.S. (34.3%) are children under 18 years old, as compared to fewer than one in four children (22.5%) that are non-Hispanics. The youthful U.S.-born Hispanic population means that children of immigrants, who typically attend public schools, where they learn English, will acculturate much faster than their parents did. And, in fact, English is making gradual gains as the language U.S. Hispanics are most comfortable speaking. Some 27% are most comfortable in English, with another 17% comfortable in both English and Spanish; meaning that nearly half -- 44% -- of the demographic is at ease in English.
Over the next decade, as millions of bilingual Hispanic teens become young adults, we can expect their consumer behavior to move closer to other non-Hispanic young adults. However, the very large size of this segment suggests that the Hispanic culture is likely to remain strong, even among U.S.-born children.
The major difference between today's immigrants and those who have come before them is the phenomenon called globalization. Inexpensive air travel, the Internet and native-language TV stations featuring content from country of origin all allow this group of immigrants to come to the U.S. and become acculturated but still have close ties to their home countries in ways that past immigrant groups could not. That is having and will continue to have a transformative effect on the U.S. culture, including music, food and sports, as illustrated by this year's World Cup fervor.
Hispanics will become a major force in U.S. consumer-spending growth over the next decade and beyond. The slowing growth and aging population that characterizes other segments of consumers means that younger and larger Hispanic families will be more vital to future growth in consumer spending than at any time in the past.
The Hispanic population is, on average, more than 10 years younger than the average for non-Hispanics. Their median age is just under 28, which means that 75% of adult Hispanics are age 18-49, compared to 56% of non-Hispanics. The household size of U.S. Hispanic families is the largest of any segment. The average Hispanic family has 4.0 members, compared to 2.9 members in the average white, non-Hispanic family. And only 4% of adult Hispanics live alone, compared to 15% of white non-Hispanics.
Hispanic consumers are the most geographically concentrated of any large consumer segment. The eight states with the most Hispanics are home to 76% of all U.S. Hispanics. About half of Hispanic consumers live in California and Texas. The other six states having more than one million Hispanics are Florida, New York, Illinois, Arizona, New Jersey and Colorado. By contrast, the eight states with the largest concentration of non-Hispanics have just 44% of that consumer segment.
By 2015, millions of baby boomers will have begun retiring, thus reducing their consumer spending. Hispanic consumers will play a major role in replacing those retirees in the consumer marketplace and will contribute to the upsurge of retail spending and economic growth.
And given their growing influence on this country's culture, perhaps one day we may be saying: "It's as American as dulce de leche."
(Source: Advertising Age, 07/26/10)
Wednesday, August 04, 2010
Another Look at the Hispanic Market
Saturday, July 17, 2010
Understanding Cross Cultural Marketing
This happens to be my second posting from Mediapost today on Hispanic Marketing.
Along with the work I do for a group of radio stations in Fort Wayne, Indiana; I also do some work for the local Hispanic Newspaper.
Go here for details and look on the right side for the links.
America is a melting pot and polyglot of fresh talent, the foundation of the nation is built on the sweat, tears, and hard work of immigrants, who bring with them not only their talent, skill-set, and abilities, but also their language, customs and distinctive cultural behavior. This is what makes America great, and it is a tradition that continues to this day.
So it's logical to think of the importance of using Spanish when communicating with and engaging the U.S. Hispanic market. But this simple approach does not work across all age groups. It has to do with fitting in, and not standing out.
We know first-hand the value of fitting in. As children, we were accustomed to moving around across different countries, cultures and languages. The first thing any kid wants at school (and, most importantly, on the playground) is to be accepted as part of the group. The first "weapon of choice" is always the mastery of the language, replete with all the slang and colloquial expressions. The consequence of humiliation is well-known in any kid's mind. It may be okay to look and dress differently, but the common denominator that brings everyone together is language.
For the young Hispanic, this translates to mastering the English language at an early age, and fitting in. This is the young ones' symbolic value, and this is what becoming American means to them. It also comes, unfortunately, with the rejection of their Latin identity.
Consequently, they are creating a new identity, where language becomes a tool of expression that is on-code with the hybrid new culture of this new generation of first-born Americans.
As generations of immigrants before them, this transformation and metamorphosis phase are common, as seen in the wave of Italians, Germans, Eastern European Jews, Greeks, Chinese, Filipinos, Koreans, Vietnamese, Armenians, Lebanese and Syrians before them.
So while the option of having "Español" buttons and "Español" call centers may be treasured by plenty of Hispanics, the vast majority might not care that much.
Some assume that Hispanics don't speak or want to speak English, which is false. Acculturated Hispanics, those who have incorporated American cultural codes, including language, feel comfortable enough to use English. These individuals are usually referred to as the "second or third U.S.-born generation" and, for many of them, mainly when they are teens, speaking Spanish is a sign of inferiority, they don't want to go "back" from where their parents came. They want to be American not Hispanic.
As they mature, however, they will find a need to know their roots (this is a reptilian act) and within that search, many will regret not speaking Español anymore.
And all this is without talking about the type of Español brands need to address. Mexican-Americans and, by definition, "wherever you come from" Americans have developed a new symbolic language, creating new words and expression that blend their mother tongue with English.
 | Dian Hasan is a San-Diego based brand storyteller and business innovator at MindCode, a U.S.-based branding, innovation and consumer research company. He has worked with MindCode clients in the consumers goods, retail, hospitality and tourism industries in the U.S., Mexico and Argentina. |
Unexpected Innovation
from Mediapost:
This is how we commonly view innovation, correlating it directly with R&D, often overlooking the fact that innovation is not the exclusive domain of the developed economies and can come from any corner of the planet.
"Necessity is the mother of all innovations" and the trigger point to innovate is fundamentally human. This can be equally found in the high-tech labs of Tel Aviv and Tallinn, Seoul or Silicon Valley, as well as on the streets of a mega-metropolis like Mexico City, in the mud villages of sub-Saharan Africa, or deep in the tropical rainforest of Borneo. The latter category is best described as street-level innovation.
While in Mexico City recently, I was enjoying an al fresco lunch in the Art Deco-adorned neighborhood of Condesa, when a fruit vendor caught my attention. His mobile fruit stand-cum-retail device was a wooden plank placed on a wheelbarrow. A glass-enclosed box displayed jicama and all the other tropical fruits, with rows of plastic containers for the salsas, lime and condiments, and a "Jicaleta" sign adorned the front. The first hint of innovation, a hybrid combo of "jicama" and "piruleta" (Spanish for lollipop). And to top it off; customers were given little Styrofoam saucers to keep the sauce from dripping. Street-level innovation at its best!
Later, while sitting in traffic at a busy intersection, I noticed a street vendor walking between the long lines of cars. He was selling water, soda, candy, cigarettes and snacks. It seemed like a lot to carry at first glance. But instead of doing a nifty balancing act, he donned a fisherman's vest with multiple pockets for all the different merchandise. A convenience store on foot.
I glanced across the other side and saw a man in a clown's suit, replete with a red nose, showing off his juggling prowess. An instant entertainment to take your mind off of gridlock, all for some small change.
And while some people from the developed world will argue that such sights are displays of urban poverty, I beg to differ, as this is human ingenuity finding solutions for daily challenges. Solutions that don't go unnoticed by the international corporate world.
During the Asian crises in late 1990s, Unilever, after having observed Indonesia's fragmented retail landscape of small street-side convenience kiosks across the country, decided that was the most effective distribution channel to reach the masses. It launched "micro packaging," pushing everything from body wash to shampoo, detergent and cooking oil in small sachets. The profit margins may also have been "mini"-sized, but the world's largest archipelago with over 220 million people made up for it in volume, handsomely.
It is therefore prudent for any marketer, advertiser and brand-builder to understand the local culture and habits, including the retail landscape. And as in the case of the "Jicaleta" wheelbarrow, salsa and other food-related brands might consider using these unique mobile retail devices and branding them accordingly.
| Dian Hasan is a San-Diego based brand storyteller and business innovator at MindCode, a U.S.-based branding, innovation and consumer research company. He has worked with MindCode clients in the consumers goods, retail, hospitality and tourism industries in the U.S., Mexico and Argentina. |
Friday, May 28, 2010
10 Facts about...
The Hispanic Consumer from Mediapost:
Hispanics see shopping as entertainment and opportunity for family / friends time, "me time" and even date time with spouses. Different trips call for different experiences and companionship. Many stores have taken advantage of this opportunity to be a destination for social activity by adding cafes, lounges and bars.
When targeting Hispanics, the competitive set is not just other retailers and stores, but also destinations. By developing the overall store experience, retailers have an opportunity to increase time spent in store as well as store loyalty.
2. Variety is the spice of Hispanic shopping
Hispanics are not motivated to simplify their shopping routine. In grocery shopping, a minimum of five channels are used by shoppers.
Understanding what category associations the Hispanic shopper has with different stores creates new opportunities in distribution.
3. Personal map replaces "near my home"
For Hispanics, shopping is not an isolated event but rather a part of their busy daily routine. Knowledge and preference of stores are based more on proximity to daily activities than proximity to home.
The challenge is to evolve beyond zip codes and understand the Hispanic footprint and where they live their daily lives. This "personal map" opens the door to discovering and expanding the base of Hispanic targeted stores.
4. One shopper, four lists
Hispanics are making lists and any one shopper most likely has a number of different types of lists in their arsenal.
The four types of lists:
- Complete: family staples and add-ons, such as cereal and kids needs for school projects.
- Mental: routine shopping needs kept mentally, not written down, such as bread, eggs and milk.
- Recipe: created around the specifics for a recipe/occasion; usually complement a mental list.
- Eternal: the ever-evolving list of the things needed or wanted sometime, somewhere, depending on the availability, price, etc. Such as fresh nopales or other hard-to-find imports.
For brands, understanding trip mission and category helps understand which list you want to "get on" or "make" and where to start the conversation within the buying cycle.
5. Brands battle it out at the shelf
While-list making is important, the store shelf, where 70% of Hispanic purchasing decisions are made, is the last stand for swaying the brand purchase decision.
Key attributes, packaging and promotions are factors that influence the final decision. Being relevant to the Hispanic consumers' needs and preferences can win that battle from the shelf to the basket.
6. The emergence of digital in retail
The perfect storm is forming from the overwhelming numbers of Hispanics participating in the digital world and new digital retail activities. And while Hispanics under-index in coupon clipping, they are over-indexing in online and mobile application redemption.
Leveraging these opportunities with online, mobile and in-store applications is the next phase in connecting with Hispanic shoppers.
7. "Shopping" is limited to only planned trips
Hispanics have been under-reported in frequency of shopping trips, despite their high number of channel choices, enjoyment of experience and larger basket sizes. This disparity is because Hispanic shoppers define "shopping" differently. Shopping involves only the planned/routine trips, and doesn't include spontaneous trips, which are frequently made.
Understanding this small but important difference opens the door for creating moments of interception that encourage and recognize spontaneous shopping trips.
8. Private labels take the stage
Where 37% of Hispanic shoppers purchased more private label products in 2009, 25% plan to buy more this year. Private brands account for 31% of Hispanic household grocery basket; averaging $89 every two weeks out of a total of $267.
To the general market, private labels are seen as generic and recognized for their price benefits. For Hispanics, however, private labels are seen as store brands, placing a higher importance on the value they carry as a product from a trusted store. To take advantage, stores must leverage their store loyalty in promoting private labels.
9. Product attributes drive brand choice
The number one reason that Hispanics try out new brands/products is the quality of their ingredients. Hispanics are moved by attributes of "well-being" like real, natural and fresh. Additionally, Hispanics are becoming more aware and increasingly more educated on health issues, taking steps to manage these issues by looking for low-fat, low-sugar and low-calorie options.
Besides packaging, product cross-promotions and communications, highlighting well-being could make the difference in choosing one store or product over another.
10. Different definition for convenience
The convenience and drug store category is important for the Hispanic market; however, the Hispanic shopper defines the quick-trip benefit of convenience differently.
For the general market, convenience is based on the speed of the experience from location to transaction. For Hispanic consumers, it's about a good experience even at the c-store and drug store level. "Location convenience" is about how quickly they can get to the store so they have the time to find what they are looking for.
These fundamental differences change how we talk to consumers about the store experiences and product offers to better reach the Hispanic consumers' need for convenience.
Wednesday, May 05, 2010
Hispanic Update
Time to break some stereotypes:
Media, Marketing Trends: Hispanics Younger, More English Proficient
A majority (62%) of Mexicans over the age of five who are living in the U.S. speak English "proficiently," while having a median age of 11 years younger than the country at large, according to new data from the Pew Hispanic Center.
"Proficiently" means speaking English solely at home or doing so "very well." The findings come from a Pew analysis of 2008 Census data. Figures are based on a survey, where people said they were either born in Mexico or have family origins there.
The median age for Mexicans in the U.S. is 25, compared to 36 for the full U.S. population. The 31 million Mexicans also have a lower median age than for all Hispanic residents.
The median income for Mexicans 16 or older in 2008 was just above $20,000, slightly below the full Hispanic population. Among 10 Hispanic groups, Puerto Ricans and Cubans tied for the highest at nearly $26,500, according to Pew's analysis.
An earlier Pew report on Internet usage found that online news users tend to be employed full-time (50%) and two-thirds (67%) have at least some college education. Racially, this group skews toward Hispanics and whites, while 32% of Hispanics get their news entirely offline.
With 19 million Mexicans who are conversant in English, that could give marketers some options in addition to Spanish-language media to reach them. Still, Spanish-language media appears to maintain its efficiency, since more than 60% of all U.S. Hispanics don't view themselves as "proficient" in English.
While some marketers appreciate the younger-skewing Hispanic population, the median annual personal income is a bit over $21,000. Still, data from the University of Georgia's Selig Center shows that estimated Hispanic buying power -- $978 billion in 2009 -- is significant, coming in higher than the GDP of all except 14 countries around the globe.
Buying power is defined as personal income available after taxes, not including money borrowed or saved in previous years. Hispanics represent 9% of all U.S. buying power, according to the Selig Center. The $978 billion figure is expected to increase by 36% over the next five years, faster than the predicted 22% jump for the general population.
Separately, Spanish-language network Telemundo recently released a survey that addressed economic concerns. It found that 63% of Hispanics feel the economy has not improved, but has "stabilized." An additional 20% said the "worst is yet to come." The Telemundo-commissioned phone survey of 500 adults was conducted from Feb. 11 through March 7 by research firm Ipsos.
Telemundo said, however, that the figures show that Hispanics are more "optimistic" than the general population. It cited a poll conducted by Ipsos and commissioned by publisher McClatchy, which found 31% of U.S. residents saying the economic bottom is yet to come.
At 46.8 million, Hispanics make up more than 15% of the U.S. population, using a combination of current and 2008 Census figures. People who self-identify as Mexicans make up about two-thirds of the Hispanic population, the largest share by far. The next-largest community is Puerto Ricans, at about 9%. Cubans are third at 3%. Some 34% of Mexicans -- 11 million -- don't have health insurance, more than double the U.S. population.
A majority of Mexicans live in California (37%) and Texas (25%). About 70% of Cubans live in Florida, while 51% of the 1.3 million Dominicans live in New York and almost 80% of them in the Northeast.
(Source: Media Daily News, 04/22/10)
Friday, April 23, 2010
Insight into the Hispanic Mom
from Mediapost:
This new research identifies key insights for approaches and messaging with this audience, particularly with regard to choice and selection of a family vehicle.
General Panel Demographics:
- 87% are women ages 18-34
- 79% are married or living with a partner
- 50% say their country of origin is Mexico
- 67% household income is $45,000 or less
- 60% are stay-at-home moms
- 74% have children ages 0-5 in the home
Key Outcomes & Marketing Opportunities:
Factors Influencing Purchase
- More than 56% of respondents said that expecting a child was a major factor influencing the purchase of a new vehicle
- Room for passengers (78%) is a major factor in choice, followed by safety/security and price/value
- Nearly all respondents said they test drove the vehicle that they purchased
- Respondents also said that they test drove other vehicles -- averaging two or more
- 1 of 4 purchase or leased a vehicle during the last year; a lesser percentage are considering purchasing in the next 12 months
- Most respondents indicate preference for a SUV or Minivan, followed by station wagon or four-door sedan
- The majority of respondents indicate they have a preference between foreign vs. domestic vehicles
- Toyota (21.9%), Ford (21.1%) and Honda (18.8%) lead in brand preference
- The majority of respondents say they receive information regarding family vehicles and auto safety via TV (79%) and the Internet (68%)
Hispanic moms are a key and influential target for automotive communications, particularly as related to selection and purchase of a new family vehicle.
Key Take-Aways:
Hispanic moms are a key and influential target for automotive communications, particularly as related to selection and purchase of a new family vehicle. There are many, many ways to positively influence buyer behavior of your vehicle brand by making mom the central point of your marketing communication platform:
- Understand her needs/walk in her shoes in terms of how her family and having children is an important factor in the vehicle that she purchases -- what is important to her, should be reflected in your messaging
- Provide her with tips and information that help her visualize the features and functionality that your automotive brand will bring to her -- if it saves her money, time or helps her store more stuff -- let her know.
- Don't limit yourself to TV spots -- the Internet, Video Downloads, Mobile, Grass Roots Events, In-Retail, non-traditional media, are all great ways to reach this busy mom.
- Remember she is a viral creature. If you build her trust, she will share your data with her friends and family -- priceless for any marketer.
 | As COO at Todobebé, Cynthia Nelson is responsible for sales, marketing, technology and strategic planning. She also oversees packaging and roll-out of 360? integrated media programs, product licensing and content syndication. She is known as a marketing and business strategist and is a frequent speaker and board member of major conferences, as well as a published author on digital marketing to U.S. Hispanics. For more information, visit Todobebé or reach her here. |
Monday, April 12, 2010
Hispanics and Food
It makes sense.
The fastest growing ethnic group overall is also leading the way in this category.
By the way, if you are wanting to reach the Hispanic Community in Northeast Indiana, send me an email: Scott@ScLoHo.net . I have a recommendation for you.
The following is from MarketingCharts.com. Click on the charts to make them BIGGER:
Hispanics Create More than Half of Food Growth
Hispanics have become the most important U.S. demographic growth driver in the food, beverage and restaurant sectors, according to data from Hispanic market research firm Latinum Network.
Hispanics Outspend All Other Groups in Food
The U.S. Hispanic segment made up more than 50% of real U.S. food, beverage and restaurant growth between 2005 and 2008, generating $52 billion of new inflation-adjusted spending. In contrast, non-Hispanics generated $40 billion of new inflation adjusted spending during the same period. This means that between 2005 and 2008, Hispanics accounted for 57.7% of sales growth in the food, beverage and restaurant sector.
Latinum analysis indicates this growth can be attributed primarily to an increase in the number of U.S. Hispanic households, and secondly to an increase in consumer spending among U.S. Hispanics. In the food, beverage and restaurant business, this new spending offset most (84%) of the real decline in demand across the entire $1 trillion sector. Latinum attributes this divergence in demand mainly to differences in ethnic preferences, economic and cultural integration, and demographics.
Key Findings on Hispanic Food Spending Behavior
- More than $9 billion of new value in food and beverage was created by Hispanics in otherwise dormant or declining categories such as fish and seafood, fresh fruit juice and dairy products between 2005 and 2008.
- $5.9 billion of new value was created by Hispanics in growing categories where they represent approximately 20% of the growth, such as vegetable juices and fruit drinks, meats including pork, ham and mutton and frozen meals, which represent the highest-growth food category among Hispanics. It appears that busy Hispanic professionals are increasingly turning to frozen meals to feed their children.
- While health & wellness trends reduced non-Hispanic consumption of beef, ethnic preferences buoyed Hispanic buying of beef.
- Hispanics are eating out more while others are cutting back, driving growth in fast food and full-service. In particular, Hispanics are increasingly likely to eat out during the work day, driving new sales in fast-food breakfasts and full-service lunches.
- The increasing rate of Hispanic home ownership is driving growth in household goods, while non-Hispanics are doing the opposite by reducing real estate holdings and their purchase of household goods.
- Hispanic teens are driving the majority of new growth in deodorant and feminine hygiene and at least 20% of growth in cosmetics and shaving needs.
The Future Looks Bright
Demographic trends indicate Hispanics should continue to be the dominant consumer segment in the food, beverage and restaurant sector for years to come, according to Latinum. Total U.S. Hispanic household spending is expected to top $1 trillion by 2013, and with relatively stable birth rates, household spending in this demographic should continue climbing until 2050.
Latinum advises food/beverage/restaurant retailers and brands to offer distinct products, channels, messaging and marketing strategies to the Hispanic market, such as Spanish-language advertising campaigns.
Minority Growth Represents Marketing Opportunity
The increasing percentage of the US demographic profile represented by ethnic minorities, including Hispanics, presents an opportunity to marketers and retailers, according to The Nielsen Company.
By 2050, more than half of the US population will be non-white (African-American, Asian, Hispanic). In that same time frame, the economic opportunity for brands in the multicultural CPG space is projected to exceed $500 billion.
When compared to the general population, on average, Hispanic shoppers tend to spend more on categories for babies and children, more in traditional mass merchandise and warehouse clubs, and more on food consumed at home.
Sphere: Related ContentTuesday, March 30, 2010
Hispanic Buying Power
from MarketingCharts.com:
According to a new Hispanic marketing trends survey, commissioned by the Hispanic advertising agency Orcí, the 2010 U.S. Census is expected to find that Hispanics number more than 50 million in the United States, and command $1 trillion in buying power. Yet half of U.S. advertisers, says the report, who acknowledge the cultural impact of Latinos, do not include Hispanics in their marketing efforts.
Latinos comprise more than 15% of the U.S. population, and are predicted to rise to 50 million in the 2010 Census, an increase of 42% since the last Census in 2000. In the 2000 report, the Hispanic growth rate of 24.3% was more than three times the growth rate of the total U.S. population, which was 6.1%.
Yet the research showed that 82% of respondents have no plans to begin or increase existing efforts aimed at American Hispanics in the next 12 months. This despite the fact that the great majority of respondents agreed that Latinos will impact U.S. companies' product and service offerings in the next five years, particularly in food tastes, fashion and technology.
Hector Orcí, co-founder and chairman of the agency, says "... for the last 30 years, a minority of companies that have been smart enough to take advantage of engaging Hispanic consumers, have seen their efforts make a difference to their bottomline... "
The survey also found that 78% of respondents do not use social media to engage Latinos despite the fact that Hispanics are the heaviest users of wireless access through mobile phones and laptops than any other ethnic group. In addition, close to 80% of Latinos engage in some kind of online socializing. Among those companies who do use social media to market to Hispanics, Facebook was the site of choice with Twitter a close second.
"Hispanics are tech savvy, young trend setters with incredible spending power..." Orcí said.
Other key results of the survey include:
- 89% believe Latinos will somewhat or significantly impact American taste in foods in the next five years
- 87% believe Latinos will impact fashion and beauty
- 82% expect Hispanics to impact entertainment
- 78% believe Hispanics will impact technology/communications
The survey was conducted via email to 9,300 senior marketing and advertising executives of B2B, consumer, small, medium and large Fortune 1000 businesses across the country in February of 2010.
And, according to a recent study by The Nielsen Company released almost simultaneously with the Orci study, America's demographic profile is undergoing major changes, and describes the potential impact on consumer packaged goods.
The report says that by 2050, more than half of the U.S. population will be non-white (African-American, Asian, Hispanic). This dynamic growth represents not only significant cultural shifts, but also one of the more remarkable marketing opportunities in history. By that 2050 milestone, the economic opportunity for brands in the multicultural CPG space is projected to exceed $500B.
| MultiCultural Opportunities in CPG (Billion Dollars) | |||
|
| Today | 2020 (+25%) | 2050(+74%) |
| Total | $299 | $373 | $520 |
| Asian | 33.3 | 47.4 | 60.0 |
| Black/African American | 129.7 | 158.7 | 220.1 |
| Hispanic | 136.3 | 166.8 | 240.1 |
| Source: The Nielsen Company/U.S.Census Projections (w/o inflation), March 2010 (Rounded from charted data) | |||
Key information on the Hispanic portion of the Multicultural CPG Buying Trends from the Nielsen study includes these observations.
When compared to the general population, on average Hispanic Shoppers:
- Tend to spend more on categories for babies and children. Hispanic households represent 11.8% of CPG total spending, but 16.6% of disposable diaper sales.
- Tend to spend more in traditional mass merchandise and warehouse clubs.
- Tend to spend more on food consumed at home.
- The Hispanic TV audience in the US is growing faster than the TV audience for the total population, showing a continued increase of Hispanic TV homes (2.3%) compared with total US TV homes (0.3%) for the 2009-2010 TV season.
- The number of people ages 2 and older in Hispanic TV homes will also grow, with estimates showing a 2.4% increase to a total of 44.3 million
Monday, December 28, 2009
How to Make your Business Grow in 2010
Advertising is about inviting people to do business with you. That's pretty basic definition.
2010 is the year of the Census in the United States.
The fastest growing niche market that will be revealed during the census (once again) is the Hispanic Population.
Unless you are advertising and marketing to this market, you will lose out because your competitors will.
So, to give you more facts and figures on what and why, take a look at this from Mediapost:
On average, Hispanics spend 13% more than GM consumer in the CPG category. As food plays an important role in Latino culture and they tend to have higher monthly food expenditures than non-Hispanics.
Hispanics also spend more than the GM on clothing because of their higher proportion of children and their younger demographic more prone to keep up with the latest trends. The average Latina has 11 pairs of jeans, while the average Caucasian female has nine.
2. Hispanics are quickly becoming the savviest of shoppers.
Hispanic women are significantly more aware (by a 48% to 36% margin) of "sales" before going to the store than GM shoppers.
Hispanics have always been savvy consumers and yet, the economic downfall has forced Latina moms to add new tactics to their repertoire like usage of coupons and in-store communications.
Although the current crisis hasn't affected Hispanics shopping patterns as drastically as the GM, Latinos are looking for partners that will help them navigate their current reality. Going forward, the key challenge for merchants is to redefine the consumer's value equation from "value = price" to "value = price + something else" (e.g., customer service, product's healthy attributes, designer exclusives).
3. Hispanic research and plan for each trip.
Hispanics plan their trips well -- more so than the GM population -- not only for what's needed, but also for the value that can be attained.
For Hispanics, the planning phase is important in organizing the shopping trip and controlling impulse purchases and budgets, not eliminating additional fill-in shopping (the general market's primary motivation is limiting the number of trips in a given time frame).
4. Hispanics are macro shopping.
Hispanic consumers are almost four times more likely than GM consumers to make their grocery shopping at mass merchandisers and mega stores.
Hispanic consumers travel significant distances to shop in these channels and spend considerable time and money in each visit, thus making large purchases and family-sized items a top priority for those shopping trips. Also, these mass merchandisers allow the consumers to shop for multiple-product categories.
5. Hispanics are not one-stop shoppers.
Hispanics significantly outpace the national spending averages across nearly every channel in CPG spending. The shopping experience plays a far more important role in their lives than for their non-Hispanic peers, making them a highly attractive segment for retailers. Hispanics are not only shopping to fulfill a list, but to fulfill different needs and experiences as well.
6. Hispanics enjoy the shopping experience.
37% of Hispanics "enjoy any kind of shopping" (vs. 25% of non-Hispanics).
No matter where, Hispanics report that shopping is a "feel good" experience. 53% of Hispanics evaluate their trip satisfaction on being "a fun place to shop." While, 43% of Hispanics "enjoy shopping even when they are not buying," vs. 37% of non-Hispanics. For retailers it is important to embrace the market by making store investments to become a FUN-shopping destination for Hispanics.
7. Shopping is not a chore.
"The store is a place where I can spend time with friends and family." Department - 50% Hisp. vs. 28% GM; Grocery - Hisp. 48% vs. 19% GM; Mass - Hisp. 46% vs. 24% GM; Drugstore - Hisp. 41% vs. 25% GM.
For Hispanics, shopping is a destination for meeting with friends and family, an opportunity to catch up and spend time together. Offering a more interactive environment allows retailers to become a preferred destination.
8. Advertising impacts and attracts Hispanics
36% of Hispanics say that they remember advertised products while shopping. 31% say that ads help them pick products for their kids.
Hispanics tend to be more receptive to advertising and marketing efforts than GM. Another important aspect of advertising is retail promotions that in most cases will influence their decision to visit a particular store.
They are actively seeking choices that allow them to increase their brand selection with new and better products and advertising plays an important role in getting brands noticed and differentiated.
9. It is a myth that Hispanics, overall, are more loyal.
Only those Hispanics who are recent arrivals (fewer than four years in the US) display above average brand loyalty.
There is no conclusive proof to say, in general, that Hispanics are more loyal shoppers. Retailer loyalty is strong among Hispanics but it pertains mainly to the store of choice, based on the need. Continued loyalty relies on value offer, product quality, and experience consistency.
10. Hispanics are quickly adopting online shopping.
Nearly two-thirds (62%) of Hispanic Internet users are buying online.
Retail initiatives for Hispanics have been primarily focused on brick and mortar, but the time has come to expand initiatives to the virtual shopping world.
In 2007, Hispanic online purchases accounted for $12.8 billion, 11% of all online retail spending. Furthermore, Hispanics are more likely to provide online feedback: 34% vs. 27% of non-Hispanics.
Now it is imperative that brands and retailers offer the opportunity for online purchases. Additionally, this will open up a whole new avenue for building a brand relationship through online activations and promotions. It also multiplies the impact through digital word of mouth via consumer feedback.
 | Alvaro Cabrera is executive director of integration at Dieste, Inc. Cabrera leads the agency's interception vision, working with some of the world's leading brands. Formerly from Spain's advertising industry, Cabrera created and led the alternative communications department at BBDO Contrapunto for four years. Under his direction, his team won international industry awards from Cannes, FIAP, and el Sol, including Grand Prix awards. He created campaigns for leading brands such as Jeep, Google, General Electric and Dodge. Reach him here. |
Sunday, December 27, 2009
Ignore at your own Risk
There is a bit of a warning in this piece.
Companies Prepare for a More Diverse 'General Market' With Generational Shift Afoot, Ethnic Insights are Standard in Ad Efforts
With traditional marketers such as McDonald's and State Farm embracing ethnic insights as an integral component of their general-marketing work, it may seem that "ethnic" is finally going mainstream.
But marketers shouldn't expect to be hailed as civil-rights warriors. After all, outside of the industry, increasing consumerism isn't exactly a noble pursuit. And ethnic agencies shouldn't expect the dawn of a new era in which they're given a seat at the agency-of-record table. Indeed, there are signs that as "general" comes to mean something other than "white," spending will drop in ethnic niches—and research and ethnic findings will be handed over to traditional general-market agencies.
Whatever the case, it's clear that as the ethnic makeup of the U.S. continues to shift, marketers in certain industries are preparing for a more diverse general market.
"I think industry-wide, as America becomes more multicultural, you will see more ethnic insights across the board," said State Farm VP-Marketing Pam El. "I think you're seeing it already, but I think you'll see it two-, three, four-, five-fold going forward."
One of the key drivers is a generational shift. Younger consumers seem to be blending faster than their older ethnic counterparts. Pepper Miller, an ethnic-marketing consultant, said more marketers are looking for "urban mindset" insights, which come from a blend of African-American and Latino cultures, from big cities. While African-American boomers may be put off by "urban" interests, the segment continues to enjoy aspirational status.
Ms. El said that State Farm has shifted its marketing based on the understanding that young people across ethnic groups may have more in common than older folks of the same race. That's why State Farm uses Lebron James to communicate with the entire youth demographic, rather than relegating him to campaigns directed specifically at African-American youths. The insurer has also recently chosen animated spots from African-American agency Sanders Wingo for general-market communications.
McDonald's has contemporized its brand over the past five to seven years with help from marketing that incorporates ethnic insights. The chain now does 40% of its U.S. business with ethnic minorities, and 50% of that group is 13 or younger. And so to build its U.S. advertising, McDonald's constructs focus groups with disproportionate minority representation, giving equal weight to Hispanic, African-American, Asian and general markets whenever possible.
Neil Golden, chief marketer of McDonald's USA, said the result has been more-entertaining advertising that has helped drive the chain's business well ahead of its competition. Part of the reason it's working, Mr. Golden said, is that "consumers more and more are not only accepting, but embracing diversity and embracing it in lifestyle and in food." He said the company has instituted a performance-evaluation model for all of its agencies, measuring how well each agency's work "delivers against ethnic insights."
Insights gleaned from ethnic research have the added benefit of offering a perspective that is a part of mainstream culture while also being separate from it. Robert Brooks, a consultant and former P&G marketer and longtime champion of Burrell Communications, explained, "African-American agencies had people who were in the minority of society who were always looking up -- an 11% minority against 80% of the population -- so they lived among us and observed us, so they were keen observers, which led to great consumer insights that led to great advertising ideas."
But it's important for marketers to tread carefully -- especially when it comes to executing these insights. One bone of contention is the issue of handing the research over to general-market agencies that have historically woeful records when it comes to their own diversity practices. Hadji Williams, an advertising and social-media consultant who has worked at both general market and ethnic agencies, said that this approach can be seen as disingenuous. It's akin to saying, "We're going to help general-market agencies with their deficiencies and then we're still going to marginalize our ethnic agencies and keep them at the back of the bus. It doesn't make good business sense."
There's also the risk of offending consumers by either playing on stereotypes, or appearing to be inserting actors of color and calling it culture. Ms. Miller noted that a number of marketers still spring for cheap laughs, casting Asians as martial artists, Hispanic women as loose, and black women as mean. Beyond issues of offensiveness, there are matters of cultural cluelessness. She recalled a Joe Boxer commercial with an African-American man bouncing around in a cutesy way. The spot was geared at women, who make a substantial portion of the men's underwear purchases among whites. But the same isn't true in the African-American market, in which men buy their own underwear.
Getting it right means finding imagery both appealing to the general market and believable to the segment in which it is based. Ms. Miller recalled a Tide commercial in which an African-American man, wearing a wedding ring, was drying his son off after a bath. It scored huge with African Americans, and was a hit in the general market as well.
It stands to reason that if ethnic agencies are the source of much of this research, they'd regularly be considered for -- and win -- agency-of-record status for major brands. But a quick look at most AOR reviews will disabuse anyone of that notion. "That's something ethic agencies struggle with," Mr. Williams said. "Black, Hispanic and Asian agencies may do great work, but you can never be an AOR."
Mr. Brooks added that he has campaigned for ethnic agencies as AOR's for decades, and never gotten a satisfactory answer as to why it wouldn't be considered.
And another issue to consider: As ethnic insights trickle up into general-market work, marketers may cut back on some targeted spending -- especially in a recession. Ruth Gaviria, VP-multicultural ventures, Meredith Corp., said that targeted spending, at least on Hispanic advertising, has fallen against general-market spend. In general, she said that ethnic work has been "a luxury."
But waiting on the sidelines is a luxury marketers can only afford for another year. "When the Census data is released and we have the come to Jesus meeting, then we all regroup," Ms. Gaviria said. "We have a game-changing opportunity in 2011."
(Source: AdAge.com, 11/30/09)
Friday, December 18, 2009
The How & Why You Should Advertise to the Hispanic Market
When I read this story from Mediapost, I got excited.
For the past year, along with my working for three Fort Wayne radio stations, I've been doing some work with the local Hispanic newspaper. Click here to go to my website and on the left side of the page, there are links to all of the media I work with.
In the meantime, read this:
We sometimes don't realize the obvious until someone points it out, as James Carville famously did during the 1992 presidential election, saying, "It's the economy, stupid." This is often the case with budgeting for Hispanic marketing.
Have you said any of these lines or one similar following a pitch by an agency or Spanish-language media executive?
"I don't have a Hispanic marketing budget."
"Marketing to Hispanics isn't in our plan."
"Call me in a few months to see if we have any budget left to do Hispanic marketing."
"We'll try to include Hispanic marketing budgets in next year's budget"
If so, then please allow me to point out the obvious: You do have a Hispanic marketing budget; you may just be spending it in the wrong places. The question comes down to proper allocation of marketing budgets based on your current and future customer base.
To allocate budgets properly, however, requires an honest look at and understanding of who your actual customer is today and who it will be in the future. Again, sounds obvious, right? Yet, many marketers don't know -- or perhaps don't want to know -- and often resort to going by who their customer was yesterday to make budget allocation decisions for today and for tomorrow.
I'm reminded of an indoor water park I pitched in the past whose marketing director said they weren't budgeting for Hispanics because, "Hispanics aren't our target market." Pressed a bit further on who is the target, the marketing person indicated it was families within a 40-mile radius of their location, an area that includes five of the state's largest cities, each with at least 30% Hispanic populations, and some as high as 45%. Not to mention the fact Hispanics have larger families than any other demographic in that area and are 10 years younger on average. So, in essence, they're content to spend 100% of their marketing budget trying to target an older population that has smaller families.
Here are some practical tips to ensure you're maximizing your marketing budgets:
1.Allocate proportional to your customer base, not a census number. If you spend 15% on the Hispanic market because Uncle Sam says that's the percentage of Hispanics there are in the U.S., the good news is you are probably ahead of your competitors. The bad news is you are likely not maximizing your reach.
2.Test market. If you're not ready to take a full plunge, try testing a Hispanic marketing program in one geographical area or across one product line.
3.But, dip more than your toe in the water. If you do decide to test market, invest properly and do a legitimate test. Don't do one or two small or short-term activities and then blame the market for a lack of response.
4.Research the cost of Spanish-language marketing. You might be pleasantly surprised at the reach and frequency you can obtain, not to mention ROI, through the Spanish-language media at a fraction of the cost of the general market media.
5.Yes, you are likely reaching some of us via general market, but don't waste the opportunity. While research is clear that Hispanics respond at a high rate to Spanish-language commercials and place affinity on those brands that cater to us, many Hispanics do consume general market media. However, don't assume your message is connecting with us just because we saw your spot. Even in English, commercials need to be culturally relevant and appeal to Hispanics in ways that may differ greatly than the general market. Why? Because marketing to Hispanic is not about appealing to a language preference, but rather it's about speaking our culture. There is a big difference between being bilingual and bi-cultural.
6.Go beyond topical spending. Some companies have budgets for Hispanic Heritage Month or are perhaps eyeing the 2010 World Cup, but tactical approaches will only yield you modest returns. This is a relationship-building demographic that is brand loyal where sustained approaches are most effective. Sphere: Related ContentWednesday, December 16, 2009
Hispanics and Social Media
They are the fastest growing miniority group in America. From Mediapost:
It's not hard for him to find followers these days.
The majority of online Americans now visit social networking sites, and Hispanics and other minorities continue to visit them more than non-Hispanic whites, according to the 2009 Multicultural Marketing Study by the Center for Hispanic Marketing Communication at Florida State University, DMS Research, and Captura Group.
The study also reveals that social media usage among Hispanics and other minorities continues to grow by double digits, with Facebook and MySpace leading the way. What's more, smaller social networking sites such as Hi5, Black Planet, Twitter and LinkedIn have strong appeal with certain ethnic groups.
Most online Americans visit social networking sites at least twice a month
In the past year, we found that usage of social networks across ethnic segments has grown exponentially. Marketers take note: most Americans now visit social networking sites and use them as increasingly important means for communication and information.
Percent of a given segment who visit a social networking site at least 2 -3 times per month:
- 62% of English-Preferring Hispanics, up from 46% in 2008
- 63% of Asian Americans, up from 42% in 2008
- 60% of African Americans, up from 33% in 2008
- 59% of Spanish-Preferring Hispanics, up from 35% in 2008
- 55% of Non-Hispanic Whites, up from 24% in 2008
Although ethnic minorities are still more likely to visit social networking sites when compared to Non-Hispanic Whites, the gap has closed considerably as social networking has become more popular.
Most ethnic segments now prefer Facebook over MySpace
In 2008, we found that MySpace held a firm lead over Facebook. Today, the tables have turned, and Facebook has become more popular among all of the ethnic groups that we analyzed with the exception of Spanish-Preferring Hispanics.
Percent of a given segment who visit Facebook (2009/2008) and MySpace (2009/2008) regularly:
| English-Preferring Hispanics | Facebook (44%/18%) | MySpace (41%/44%) |
| Asian Americans | Facebook (55%/18%) | MySpace (29%/31%) |
| African Americans | Facebook (42%12%) | MySpace (40%/29%) |
| Spanish-Preferring Hispanics | Facebook (36%/13%) | MySpace (41%/35%) |
| Non-Hispanic Whites | Facebook (43%/7%) | MySpace (31%/22%) |
Social media preferences are beginning to fragment among minorities
When considering a social media strategy, marketers should take note that ethnic groups have preferences between social networking sites. Consider the case of Hi5, a social media site with a strong presence in Latin America. Its success in the southern hemisphere has made it extremely popular with Spanish-Preferring Hispanics in the U.S. who want to connect with family members back home.
Today, Hi5 competes with both Facebook and MySpace among Spanish-Preferring Hispanics (29.1% usage versus 36% and 41%, respectively).
These findings are important because as social networking has become ubiquitous, specialized sites have become viable options for advertisers looking to target ethnic audiences.
Percent of a given segment who visit Hi5 and Black Planet regularly (2009):
| English-Preferring Hispanics | Hi5 (6.1%) | Black Planet (2.4%) |
| Asian Americans | Hi5 (5.0%) | Black Planet (1.0%) |
| African Americans | Hi5 (4.8%) | Black Planet (17.2%) |
| Spanish-Preferring Hispanics | Hi5 (29.3%) | Black Planet (0.6%) |
| Non-Hispanic Whites | Hi5 (0.4%) | Black Planet (0.0%) |
Asian Americans are twice as likely to use LinkedIn and Twitter
The 2009 study also included the usage of LinkedIn and Twitter. We found that both sites are still emerging and most popular among Asian Americans. We attribute the popularity of LinkedIn and Twitter among Asian Americans to higher income levels and technology adoption.
Percent of a given segment who visit Twitter and LinkedIn regularly (2009):
| English-Preferring Hispanics | LinkedIn (7.2%) | Twitter (6.7%) |
| Asian Americans | LinkedIn (14.5%) | Twitter (10.8%) |
| African Americans | LinkedIn (4.2%) | Twitter (6.6%) |
| Spanish-Preferring Hispanics | LinkedIn (0.9%) | Twitter (2.6%) |
| Non-Hispanic Whites | LinkedIn (7.1%) | Twitter (5.6%) |
More growth expected for 2010
In the past year, usage of social networking websites has exploded among all ethnic groups and we expect this trend to continue. While preferences of certain social networking sites might change over time, social media promises to remain relevant for all ethnic groups.
People such as José Hernández can expect many more followers. For marketers, the sky should also be the limit.
 | Lee Vann is founder and CEO of Captura Group Captura Group. For nine years he has led Hispanic interactive initiatives for clients including the U.S. government, Allstate Insurance Co., Century 21, PayPal and Ford Motor Co. Reach him here. |
 | Felipe Korzenny is the director of the Center for Hispanic Marketing Communication at Florida State University and senior strategy consultant at Captura Group. He has over 30 years of Hispanic marketing experience and has published six books, nearly 100 publications on communication and culture and is a prominent nationwide speaker. Reach him here. |
Tuesday, November 17, 2009
Social Media: The Hispanic Connection
from Mediapost:
Below, I introduce you to Tony and to the millions of Hispanics like him online today.
Tony is bilingual and bicultural
Jose Antonio Uribe, a/k/a "Tony," was born in San Diego to first-generation Mexican immigrants. He is 26, and lives with his parents and sister in National City, a suburb of San Diego that's about 60% Hispanic. Tony's family is very much Mexican American. Spend a few minutes in his home and you'll notice something that's happening in millions of Hispanic households across the United States: Communication is a flawless mix of both English and Spanish.
He speaks only in Spanish to his mom, exclusively in English with a sister, and mixes both with his father. He watches television mostly in English, but he also catches "Sábado Gigante" with his parents and telenovelas with his girlfriend.
Tony is a proud "American Latino"
He celebrates Christmas on Dec. 25, but also Reyes Magos on Jan. 6, one of the most important Catholic holidays in Mexico. He celebrates Thanksgiving, but with a Chipotle turkey, and drinks tequila instead of eggnog.
Like many Latinos, he entered the workforce at a young age to help his parents. He was considered an "at risk" student by his high school counselor, and as a result enrolled in a program that helped him keep up his grades while earning extra money.
He would later graduate from the University of Phoenix with a BS in marketing.
Tony is tech-savvy
Tony has been online as long as he can remember. He vividly recalls an old PC that his dad bought for the family and connecting to the Internet with NetZero and chatting on AOL. A music trendsetter among his friends, Tony was a big fan of music sharing sites Napster and LimeWire. Although Tony mainly visits English-language websites, he communicates online with friends and family in both English and Spanish. He prefers Facebook to MySpace, although he still visits the latter once a week to keep in touch with 350 friends there.
Although Tony considers himself value-conscious, he'll save up hundreds of dollars for a product he considers worthwhile. Today, Tony sports an Apple Mac Mini and orders Chipotle burritos from his iPhone, a product he purchased "the day it came out."
His iPhone boasts about two dozen applications, which he switches constantly. He uses the Facebook application the most to communicate with his 185 "friends."
Tony says "Don't try too hard"
What advice does Tony give to marketers looking to reach him and his peers? "Don't try too hard."
Tony feels that stereotypical Hispanic advertising misses the mark with him.
He rarely clicks on an online ad, but rather goes directly to the product website when he sees something that catches his eye. He goes online to buy clothing, books, music and event tickets. He is always looking for websites that offer a Spanish component so that he can share his interests with his monolingual friends or family members.
"My world is very multi-cultural," he says. "America is very multi-cultural. Campaigns that reflect who I am appeal to me."
| Lee Vann is founder and CEO of Captura Group Captura Group. For nine years he has led Hispanic interactive initiatives for clients including the U.S. government, Allstate Insurance Co., Century 21, PayPal and Ford Motor Co. Reach him here. |
