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The Multicultural Mix
By Josh Martin
Reprinted from DMA inMarketing Magazine, January 2006.
When Proctor & Gamble wants to develop a new beauty care product,
nothing moves until key multicultural consumer panels give their
approval. The company doesn’t just test a product; it also uses panels
to get feedback on advertising, marketing and product packaging. P&G’s
strong relationship with its diverse consumer base is underscored by a
multichannel communications effort that incorporates a wide range of
media and special events marketing techniques. This reflects the fact
that the United States is rapidly becoming a multicultural, multiethnic
marketplace, in which success relies on both the medium and the message.
Combining multicultural sensibilities with multichannel marketing
techniques allows companies to most effectively build key consumer
relationships in the African-American, Asian, and Hispanic communities,
the importance of which is becoming more apparent every day. Estimates
from the Selig Center at the University of Georgia show that by the end
of the decade, African-American, Asian and Hispanic consumers will
represent 22 percent of total American buying power.
Strength in Numbers
Multicultural marketing, which tailors a company’s efforts to make it
more attractive to diverse consumer groups, is no longer the exclusive
domain of corporate giants like P&G, Kraft, Pepsi, or General Motors.
Thanks to direct marketing, multicultural campaign budgets are now
within the reach of a large number of small and midsize firms.
“We have a full menu of media technologies to use,” says Saul Gitlin,
executive vice president of strategic services at Kang & Lee, one of the
largest Asian multicultural ad agencies in the U.S. “The sheer size of
the multicultural market demands it.”
Yet many companies have resisted targeting specific market segments.
They still devote only pennies of every advertising and marketing dollar
to multicultural markets. According to Gitlin, less than 5 percent of
annual total advertising expenditures in the U.S. are allocated toward
marketing specifically to Hispanics, African-Americans, or Asians.
Failure to build relationships using multicultural and multichannel
marketing techniques is shutting many companies out of vital and
fast-growing consumer markets. Since 1990, according to data compiled by
Selig Center, mainstream consumer buying power had grown 113 percent.
But in that same period, buying power for minorities has soared:
African-American buying power grew 139 percent, Native American buying
power was up 158 percent, Asian buying power rose 240 percent, and
Hispanic buying power topped the charts, growing 247 percent. Measured
in dollars, those ethnic markets now have a combined buying power of
$1.94 trillion. Clearly, the future is multicultural.
Establishing a Campaign
More companies are now beginning their marketing by assuming they need
to reach a multicultural base.
“We have to reach a diverse customer mix; we are always looking for
multicultural groups,” says Vince Reed, Verizon’s group marketing
manager for multicultural marketing.
When the communications giant launches a new product or service, the
company looks at a variety of subgroups and considers specific ways
their potential customers can be won over. The company tailors its
marketing efforts to African-Americans, Asians and Hispanics, as well as
people with disabilities. Major campaigns are produced in Chinese,
Korean, and Spanish. Targeted groups are reached through multiple media
channels, including print, TV, cable, radio, and the Internet.
Verizon’s multicultural campaigns often use very sophisticated research
resources to construct a multichannel, multilayered approach. For
example, Verizon’s “Realize” program – rolled out in Philadelphia and
Washington, D.C., markets in 2005 – focused on ordinary people using the
telecommunication company’s services to achieve creative goals and
highlighted African-American customers who exhibit entrepreneurial
spirit.
What made this particular campaign even more noteworthy were its
inspired, unconventional media efforts: commissioning murals and
graffiti art, and placing covers on magazines in barber shops.
Barber shops? Yes, says Reed, because Verizon research shows they form a
major social hub for African-American communities. “We had to reach a
level above mainstream marketing,” he says. “We had to reach out through
local media and guerilla marketing efforts.”
Verizon sources say the success of the Realize program is due in large
part to the company’s utilization of vast consumer databases, which
enable it to model detailed markets. “We need to be able to be proactive
and move quickly, to beat the competition as the market evolves,” says
Reed.
Turning the Channel
Obtaining reliable consumer and media data remains the biggest stumbling
block to effective multicultural marketing. Sidney T. Yee, chief client
officer with Admerasia, one of the largest Asian-oriented ad agencies in
the U.S., concedes that mainstream campaigns have a slight edge “because
there is more accurate auditing and media measurement.”
However, the market information gap is closing, thanks to work by market
research consultancies like Yankelovich, whose annual multicultural
marketing study provides key insights into the relationship between
multicultural consumers and various marketing techniques and media
plays.
“Principles of relationship marketing are at the core of successful
multiculturalism,” says Sonya Suarez-Hammond, a director on Yankelovich.
“It’s all about welcoming and listening to the consumer. But many
companies do not yet have a multicultural value proposition for targeted
consumer groups.”
Suarez-Hammond warns companies not to take brand loyalty for granted.
According to the current Yankelovich Monitor Multicultural Marketing
Study, 80 percent of African-Americans and 73 percent of Hispanics like
to try different brands. “These consumers are not blindly brand loyal,”
concludes for Suarez-Hammond. “Companies have to earn that loyalty.”
As more market researchers cull U.S. Census information and carefully
monitor ethnic media outlets, advertisers will be able to draw on more
accurate numbers. The number of monitored, multiculturally oriented
media outlets has surged in the past decade, thanks in part to the
growth of the Internet, as well as changes in cable ownership and the
surge in new print media. Admerasia’s Yee estimates that the number of
Asian-oriented U.S. media outlets, including radio, television, print
media, and Internet portals, has grown from 200 in 1995 to more than 700
in 2005.
Yet gaps still remain. For example, the relative shortage of reliable
data on the Hispanic market makes it difficult for some marketers to
hone the right message and select the correct media mix. Many Hispanic
consumers simply don’t register on advertisers’ radars.
Consider the following: While the average consumer receives 350 pieces
of English-language direct mail per year, Hispanic consumers receive
roughly 3 pieces of such mail, according to the Association of Hispanic
Advertising Agencies. This occurs despite the Yankelovich multicultural
marketing survey showing that more than 60 percent of U.S. Hispanics
prefer English or are comfortable seeing both English and Spanish in
advertising.
“A smart company needs to accept that this market is much more
sophisticated,” says Eduardo Bottger, co-president of Al Punto
Advertising. “You have to earn market share in order to keep it.”
Careful selection of the media mix is now widely seen as a key aspect of
developing a successful multicultural campaign. Suarez-Hammond points
out that such care helps build relationships by demonstrating a
commitment to a target market.
“It isn’t enough to look good,” says Admerasia’s Yee, who considers
relationship building to be a key to success with Asian consumers. “We
help clients gain cultural insights about the Asian-American
communities, which can generate business opportunities for their
products.”
In America’s rapidly growing multicultural markets, well-planned
marketing efforts will form a key part of the relationship-building
process. No market segment can be taken for granted; successful players
will study a consumer’s culture, and watch it as closely as their own
bottom line.
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