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HavanaJournal.com: Cuban Americans

New approaches for marketing to Hispanic culture

Posted June 15, 2005 by publisher in Cuban Americans.
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by Paul Epstein | Marketing Profs
Marketers who choose not to devote significant time and effort to the Hispanic population are missing out on a vital consumer segment that is growing faster than any other minority group in the United States. In fact, businesses should consider implementing new approaches and strategies to target Hispanics. Perhaps the most effective way to reach this evolving market is through the Internet.

Research conducted by Brand Strategy Journal shows that Hispanics are the largest minority group in America. By 2012, they will account for nearly one out of every five American residents if growth rates persist at their current pace.

Buying power among the Hispanic population in the US is also increasing at a rapid pace. Between 1996 and 2001, the median income of Hispanic households rose 20%, from $27,977 to $33,565, while the median for all US households increased just 6%, from $39,869 to $42,228. In this day and age, the Hispanic audience carries significant purchasing power and simply cannot be ignored in a company’s marketing strategy.

As their household income increases, Hispanics are entering cyberspace more quickly than any other ethnic group in the US. Internet usage among them jumped 7.4% in 2004, after an 8% spurt in 2003, the market research firm eMarketer predicted. It also projected that 13.3 million Hispanics were surfing the Net by the end of 2004, up from 12.4 million in 2003 and 8.7 million in 2000. Though they are still likely to be less wealthy than the average, evidence suggests that more education among second and further generations is starting to ameliorate economic conditions.

Marketers must also be aware of the typical Hispanic-American Internet user: 28 years old, slightly more likely to be male, and unmarried, according to a study conducted by the Association of Hispanic Advertising Agencies. Approximately half of all Hispanic-American Internet users are Spanish-language dominant; that is, at home they speak Spanish more than English.

This same study reveals that Hispanics spend almost five hours per week online, and for 71% of them the primary usage is from a computer at home. In addition to their time on the Net, typical Hispanic Internet users are watching 18 hours of television per week (approximately 50% of it in Spanish) and listening to 15 hours of radio (also half of it in Spanish).

More than three-quarters of respondents are using the Internet for email, 60% to get news, 54% to listen to music and 43% to chat. According to the 2002 Nielsen Media Research study, Univision.com was the top Spanish-language destination for US Hispanic users for the second year in a row. Rounding out the top five Spanish-language Web destinations for US Hispanic users were Yahoo En Espanol, Terra, Yupi and StarMedia. There is abundant evidence that Hispanics are a crucial part of the American customer base and that a significant amount of them are using the Internet. That said, marketers should use the aforementioned data to find out the most effective ways to get through to this demographic via the Internet.

Marketers must first realize that there are two groups of Hispanics in the US: native-born Hispanics who have lived exclusively in the US; and immigrants. These two groups are usually very different in their consumer behavior.

For example, those who speak English fluently tend to be familiar with mainstream American culture and have buying habits similar to non-Hispanics that have spent most of their lives in the US. Meanwhile, the immigrant population often has shopping habits that reflect its natural heritage. They are more likely to use Spanish-language media and would prefer to shop where employees speak Spanish. Marketers must be aware of which group of Hispanics they are trying to target—fluent English-speaking Hispanics or immigrants—and plan their marketing campaigns accordingly.

Second-generation Hispanic-Americans have been deeply affected by American culture and are very different in their consumer behavior from foreign-born Hispanics, who usually view themselves as completely Hispanic and have minimal contact with or interest in mainstream US culture. Second-generation Hispanic-Americans have become much more acculturated and want to replace, or have already replaced, their Hispanic identity with a mainstream American identity.

An article in Hispanic Business titled “A Melting Pot With Flavor” explains this phenomenon. Upon arriving in the US, foreign-born Hispanics are culturally isolated. However, their children and grandchildren become assimilated or acculturated. These days, the Hispanic market can be divided with foreign-born and third-generation Hispanics at the poles of the cultural spectrum, and much of the market moving between them.

According to the Pew Hispanic Center, which conducts ongoing research of Hispanic Americans, first- and second-generation Hispanic youths tend to thoroughly identify with and embrace their cultural heritage even as they begin blending into American society. But by the third generation, Hispanic youths identify more with American culture and values. (This is a concern to many Latinos and Hispanic organizations, which fear that Hispanic youths are becoming disconnected from their ethnicity and not taking leadership roles in the Hispanic community.)

Some US companies are already catering to the Hispanic immigrant population, and it is paying off. H&R Block, in its first major Hispanic project, installed 4,100 bilingual tax preparers in 2002 and aired amusing Spanish-language commercials. This initiative helped Hispanic traffic grow by double digits. Lincoln Mercury featured actress Salma Hayek in its first Spanish-language ad campaign with a celebrity. The National Football League is rushing to promote itself to Hispanics, a group that has traditionally preferred soccer and baseball, by having its Web site (NFL.com) available in Spanish and by featuring preseason games such as the 2001 American Bowl preseason match between the Dallas cowboys and Oakland Raiders at Azteca Stadium in Mexico City.

It is estimated that the worldwide online Spanish-speaking population is 50 million. By not making its Web site available in Spanish, a firm may be missing 20% of all Internet users. Now that the Internet is reaching relatively un-acculturated Hispanics who are frustrated by the lack of Spanish-language content on the Web, it is important for marketers to construct Spanish-language Web sites. A Terra Lycos study showed that in 2002 Hispanics spent 55% of their online time connected to Spanish language sites, compared with only 39% in 2001.

One of the most common mistakes that advertising executives make when marketing to Hispanics is assuming that the Hispanic population in the US is homogeneous. Most US Hispanics are Mexican, but some are from other Central and South American or Caribbean nations such as Cuba and the Dominican Republic, or from Puerto Rico.

According to a report conducted by the US Census Bureau, there were 37.4 million Hispanics living in the United States in 2002—about 67% Mexican, 14.3% Central and South American, 8.6% Puerto Rican and 6.5% from elsewhere.

Most Hispanics prefer to identify themselves by their country of origin rather than referring to themselves as “Latino” or “Hispanic.” Although Hispanics in the US consider themselves to be a part of a common ethnic group, most have a stronger identification with their country of origin, and these different identifications should be considered when planning any marketing strategy.

Marketers, however, must also be aware of Hispanics’ general preferences and habits. For example, they are group oriented. They take pleasure in group outings such as soccer games, street fairs and festivals. Companies must not rely solely on the Internet or television to reach the Hispanic consumer. Outdoor ads with simple messages generate the biggest reach and frequency numbers at low cost.

Hispanics are also extremely family-oriented, so any marketing strategies with family values themes have strong appeal to them. Hispanics can be characterized by strong and close bonds that often extend outside the nuclear family to include grandparents, aunts, uncles, cousins and other, non-family members.

For example, when Honda targets Hispanic consumers in advertisements for its Accord, it usually pitches the sedan version instead of the sportier coupe. Honda does this because its market research finds strong family orientation among Latinos. When Ford advertises its Ford Focus to Hispanics, it emphasizes the small car’s attributes as a family vehicle. But the carmaker pitches it to other groups as a fun-to-drive vehicle for the young.

Hispanic families are very likely to be three-generational, with grandparents an integral part of the unit. Casting a Hispanic family in advertisements, complete with grandparents in the home, might be a wise marketing strategy for firms hoping to expand their marketing messages to Latinos.

Humor and laughter are also great ways to connect with the Hispanic consumer. Hispanics will often playfully tease a person about his/her physical attributes. This is considered playful teasing, which is endearing, not demeaning. Marketers should be aware of this and other cultural preferences when using humor in their advertising campaigns.

Hispanic Internet users are too large a consumer segment to ignore. Those that figure out a way to reach this group will reap the benefits.

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