by Terry Soto, Author and President of About Marketing Solutions, Inc.
I just had lunch this week with a Vice President of Multicultural Marketing at a large CPG company with over 20 years brand management experience at P&G, Kraft Foods, etc. who was asked to take the position four months ago to establish Multicultural Marketing as a strategic growth pillar for the company and to generate impressive share growth for the company’s brand portfolio. When I asked about the greatest challenges faced so far, the following three surfaced:
- Brand managers/directors are oblivious to the multicultural market’s existence in part due to the location of corporate headquarters and little exposure to markets and retail environments where multicultural markets concentrate
- Brand managers/directors are indifferent and even dismissive about having to consider the Hispanic market as a market opportunity they should address in their plans
- Brand managers/directors are resistant to allocate time and budgets to incorporate multicultural consumers into a research, planning and strategy and implementation process that aligns with the brands’ direction and goals
The truth is that taking an “out of sight out of mind” position or claiming ignorance when the health of the businesses is at stake is simply incomprehensible, but it is clearly still a threat and a barrier to growth in many companies today.
I offer the following advice and insights to brand managers who are still wondering why the Hispanic market is critical for the continued growth of their brand portfolios today and into the future.
Take just 30 minutes to read, understand and reflect on the vastly different consumer demographics in the U.S. today and the potential impact of inaction on our businesses.
- Half (46%) of children under 18 and 40% of Gen Y and Gen X are Multicultural consumers
- 50% of children born in the U.S. in 2009 were multicultural
- 50% – 80% of Teens under 15 in key ten states are multicultural
- Two thirds (66%) and 80% of Boomers and 65+ consumer respectively are Non-Hispanic White
- The average consumer and marketing to them is an irrelevant undertaking today
- No household type describes even one third of households
- The “Iconic” family with kids is only 22% of Households!
- 70 million grandparents
- Women represent majority of head of householders
- One in six and one in eight people, respectively are Hispanic and African American
- The Hispanic market is poised to be the 9th largest economy in the world by 2015 and it’s in our back yard!
- At $1.3 Tril
lion spending power – it is currently #12
- On a per capita basis, U.S. Hispanic incomes are greater than in all the BRIC countries – Brazil, Russia, India and China
- Hispanics Are Driving Consumer Spending Growth
- Hispanics represented about 12 percent of American households but contributed to nearly half of the growth in consumer spending in 2010.
- Because the Hispanic population is much younger, the Hispanic household lifespan is 16 years longer and with more spending in some categories.
- The data sources say it all
- Nielsen CEO, David Calhoun told 1,400 retailer and CPG executives at the 2011 Consumer 360, to spend 65 percent of their time figuring out their Hispanic opportunity because it is no doubt the single biggest source of growth for all companies in the U.S. in the short and long term.
- Nielsen SVP, Claudia Pardo, added that within the next five years, multicultural consumers will drive 86 percent of the total growth on spending at retail vs. only 10% without the Multicultural spend.
- Evaluate where your brands are growing, are flat or are declining and align that information with market demographics. I think you’ll see some startling correlations.
- Take a global view of today’s consumer marketplace and re-evaluate the profile of your core consumer is today. You’ll be surprised at the opportunity you uncover.
- Change your mindset; achieving dramatic growth by making your strategies effective among multicultural or Hispanic consumers means developing strategies that are integrated and grounded on total market consumer insights so resulting strategies are aligned with consumer insights that resonate with all potential core customers.
- Lastly, Multicultural or Hispanic marketing should never be a separate endeavor. Given the makeup of where we do business today, the segment (s) should be integrated into research, planning, strategy development and tactics which walk in step with the bigger effort towards meeting the brands’ overall direction and goals.
At the end of the day, Multicultural consumers are spending a significant amount of their incomes across all categories. And, just because they’re not on your radar, doesn’t mean they’re not buying from your competition. And when was the last time that was a good thing?
Terry Soto is President and CEO of About Marketing Solutions, Inc., a Burbank, California – based strategy consulting firm specializing in helping her clients dramatically improve overall business performance by optimizing their strategies to succeed in the Hispanic market. firstname.lastname@example.org