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Viewpoint -- A
Powerful Latino Market Cannot Be Ignored |
Almost 7% of the nation's 23
million firms are Latino-owned -- the largest percentage of any
minority group.
By Esther Novak, CEO, VanguardComm Sept. 22, 2008
Latinos' commercial influence continues to grow as well. Almost 7%
of the nation's 23 million firms are Latino-owned -- the largest
percentage of any minority group -- with growth three times the
national average for all businesses. These companies are spending
in excess of $200 billion annually on procuring goods and services.
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The 47 million-plus Hispanic population in
the U.S. accounts for 15% of the total U.S. population and
have spending power of $850 billion. Projections show that
figure is likely to exceed $1 trillion by 2010. From 2000 to
2006, their purchasing power climbed more than 63%, to $798
billion. By 2011, it will top $1.2 trillion, according to
the University of Georgia's Selig Center for Economic Growth.
It is a market that cannot be ignored or treated like "business
as usual," and a number of firms have found great success
addressing it. Yet, many American companies still seem
reluctant to fully invest in promoting their brands and
capturing share. Major manufacturers and service providers
have only taken baby steps at shifting investments toward
the Latino market
Latinos' commercial influence continues to grow as well.
Almost 7% of the nation's 23 million firms are Latino-owned
-- the largest percentage of any minority group -- with
growth three times the national average for all businesses.
These companies are spending in excess of $200 billion
annually on procuring goods and services.
Why so? It could be a lack of corporate commitment to
strategically target the Hispanic market or perhaps a
resistance to the requirements of marketing to Latinos. It
could be a simple fear of the unknown.
Still, there are many attractive elements of this market
that many businesses can leverage. For example, Latino
demographics skew younger than the U.S. population -- with a
particularly strong youth market. Latinos also comprise a
substantial urban population concentration that allows
relatively easy geographic and age-group targeting.
According to the Association of Hispanic Advertising
Agencies, the industries that are leaders in marketing to
Latinos are food and beverage products, food services,
telecommunications, personal care and insurance. The
laggards are pharmaceuticals, auto makers, travel/entertainment,
software, computer makers, securities/financial services and
specialty retail.
Those who are anxious to tap the market but inexperienced at
reaching it must not make the easy mistake of "selling to
the Hispanic bloc" -- the assumption that a Cuban thinks
like a Mexican thinks like a Puerto Rican. Each of the 22
Latino nationalities has its own cultural nuances, idioms
and assimilation. Businesses need to understand these
factors, which include a connection to home country; multi-generational
households; mistrust of institutions; a belief in fate;
respect for the elderly; the influence of community leaders;
the role of faith; and the upholding of tradition,
celebrations, humor and cultural icons.
Along with this, businesspeople need to take a holistic
approach, which requires a deeper understanding and
delineation of Hispanic customers, along with a realization
that local and regional efforts are as effective as national
programs. If anything, local marketing events and real
community involvement can produce a greater return on
investment. Whether it is sponsoring a favorite soccer team
or celebration, honoring community leaders, showing off new
products, or supporting professional, social and charitable
organizations, savvy businesspeople bend over backwards to
make connections not only with Latino customers, but with
those who surround them.
As important, the Latino world has seen explosive growth in
online and social media. Word-of-mouth communication is the
most powerful channel in the Latino world and helps explain
the surge in online social networks among Hispanics. Simply
put, Hispanic consumers are best influenced by their peers,
and businesses need to reach them where they live, work,
worship, play and shop -- and not just electronically.
What does all this tell us? Simply, that the path toward
reaching Latino businesses and consumers is multi-faceted
and must lead to an emotional bond. Latinos tend to be very
loyal to a brand they trust and feel cares about them as
customers. They need to be invited into a business's offer.
The approach must be rich and varied, reflecting the fact
that Latinos across the nation are a powerful, still-evolving
stew of language, culture and custom.
Peruvian-born Esther Novak is the founder and CEO of New
Brunswick, N.J.-based VanguardComm (www.vanguardcomm.com), a
multi-cultural marketing communications firm. She currently
serves on the New Jersey Governor's Council for Economic
Growth and the Board of the Association of Hispanic
Advertising Agencies. |
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