How to Ensure Your Brand Benefits From the Value Offered By Market Research

Terry explains why planning, designing and executing market research without thinking and including all a brand’s target profile is a mistake.

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Just Because You Don't See Them Doesn't Mean They Aren't Buying From Your Competition

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:

  1. 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
  2. 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
  3. 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. terrysoto@aboutmarketingsolutions.com

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Retail Health Clinics – Are Retailers Missing the Mark in Hispanic Communities?

The use of retail medical clinics located in pharmacies and other retail settings increased 10-fold between 2007 and 2009 according to a 2011 RAND study. The determining factors in choosing a retail medical clinic over a physician’s office were age, health status, income and proximity to the clinic.

The strongest predictor of retail clinic use was proximity. Retail chain operators proposed that the new clinics would improve access to medical care among uninsured or underserved populations. However, these clinics have been opened more often in higher-income areas that are less likely to be classified as medically underserved, according to a new study from the University of Pennsylvania School of Medicine published in the May 25 issue of Archives of Internal Medicine.

“There has been a rapid rise in the number of retail clinics across the United States, but this growth is not evenly distributed across communities,” says Craig E. Pollack, MD, MHS, an internist and Robert Wood Johnson Clinical Scholar at Penn. He added that “poorer neighborhoods are less likely to have access to these clinics.” “We know that people living in poorer areas are less likely to have health insurance, less likely to have a regular source of medical care, and may have transportation problems that keep them from getting to the doctor,” Pollack says. “By tending to locate in richer neighborhoods, retail clinics may not be meeting their full potential to help address these problems.”

Retail chains trying to attract Hispanic shoppers should be encouraged, but they should also be very concerned. They should be encouraged because the concept of walk-in pay for service clinics is a norm in Latin America. So in the U.S., it is very culturally relevant for Hispanics to seek out neighborhood clinics in their communities that provide health services in a similar manner because neighborhood clinics are often a cost-efficient and convenient solution among foreign-born Hispanics, who upon first arriving often do not have jobs where health care coverage is an option for them. Indeed, according to the Department of Human Health and Services three in ten individuals of Hispanic origin (30.7%) were uninsured in 2010 compared to 11.7% for non-Hispanic whites.

Retailers such as Wal-Mart, Walgreens, CVS, Duane Reade and H-E-B have opened hundreds of these retail clinics. However, studies clearly indicate that access should be of great concern to retailers interested in attracting and gaining loyalty among Hispanic shoppers. Beyond location, it is also important that these retail clinics are staffed with Spanish-speaking nursing staff members to avoid the risk that symptoms and treatment could be misunderstood and/or inappropriate treatment or medication provided or prescribed.

Retail walk-in clinics are a natural fit for Hispanics, but retailers can only maximize this fit when they start expanding access in areas where the market is concentrated and unless they staff and are able to provide quality and culturally relevant care.

Here are six steps you can take immediately to assess your chain’s existing retail clinic coverage and quality delivery in underserved Hispanic communities:

  1. Run a geo-demographic and acculturation analysis on all your store trading areas including those the stores where your clinics are located to assess Hispanic market density and reach within the store’s trading area
  2. Create clusters of stores in terms of High Hispanic, Medium and Low Hispanic density – typically 50% or >, 20-50% and 20% or less are standard thresholds.
  3. Run an acculturation and socio economic segment analysis on each cluster to profile Hispanics in each cluster – this will help you understand language and other culture stage differences and the implied health care / staffing requirements. You will see that low acculturation profiles will be stronger in areas where Hispanic density is highest and vice versa.
  4. Take a count of how many clinics are in each cluster category and identify your coverage gaps and service delivery requirements.
  5. Do the same for your competition and focus on addressing coverage gaps where your competition has the strongest presence in trade areas where the least acculturated Hispanics are most concentrated.
  6. As an immediate step, strengthen your health care delivery in existing stores located in low acculturation trade area locations even as you plan for increasing retail clinics in underserved locations.
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Youth and Age in Corporate America’s Cultural Dichotomy

Corporate marketers, are you ready? I’m going to ask you a difficult question.

Is your age outpacing your organization’s relevancy?

The topic begs discussion when recognizing that, generationally and culturally, half of ALL Gen Z consumers (46%), and 40% of Gen Y and Gen X consumers are multicultural. Conversely, 66% of Boomers and 80% of Seniors 65+ are Non-Hispanic White.

Commenting on my recent discussion on strategic relevance, Dan Stanek, EVP of Big Red Rooster replied, “Innovation is more difficult when leaders are much older than the target market and do not understand how they operate.”

Is he right?

Generational and cultural skews represent significant challenges for a lot of today’s senior executives. If they want their companies to remain relevant and in demand, they are tasked at this particular point in marketing history to not only shed traditional views and ways, but to learn to understand and address cultural diversity in younger generations.

Leading with Age and Cultural Insights

The sharper minds in corporate America are already in sync with the country’s age and cultural trends.

  • From Pamela El, VP-Marketing at State Farm in the Ad Age article, Brands Prepare for a More Diverse ‘General Market,” “We know the face of America is changing, and we want our marketing communications to mirror what’s going on in this country, so 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. It’s very deliberate. I think industry-wide, as America becomes more multicultural, you will see more ethnic insights across the board. I think we’re seeing it already, but I think we’ll see it two-, three, four-, five-fold going forward.”
  • “It’s very clear that African-American, Hispanic and Asian-American consumers set the trends and McDonald’s has found it more valuable to apply these segments’ preferences to the overall marketplace than to apply overall preferences to these segments,” said McDonald’s USA Chief Marketing Officer Neil Golden at the 2010 ANA Masters of Marketing Conference, adding that 40 percent of McDonald’s U.S. business comes from the Hispanic, Asian and African-American markets.
  • From Coca Cola’s CMO, Bea Perez, as she kicked off this year’s Nielsen Consumer 360 conference: “We know that eighty-six percent of the growth through 2020 for Coca-Cola’s youth-target market will come from multicultural consumers, especially Hispanic, and focusing on this segment is critical to the company’s future growth.”

These are the exceptions, however. The gap is wide between the multiculturally influenced Gen X, Y & Z markets and the bulk of US corporations which do not yet “see” the relevance in educating their game to new consumer market trends.

In mid-June at the Consumer 360 Conference in Miami, Nielsen’s CEO David Calhoun told 1,400 retailer and CPG executives 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.

“The story here is that within the next five years, multicultural clients will drive 86 percent of the total growth on spending at retail and if you look at growth without these groups, you are only addressing 10 percent of the growth,” added Nielsen’s SVP, Claudia Pardo at the same conference.

So Go Ahead – Get In Sync

Are you relevant? Is your organization benefiting from your “in the know” view? Consider these four ways you can hit “refresh” on innovating relevantly for your company.

1. To up your game, go meet the players

Get out into your locations. Stand in line. Get into the marketplace. The first step is to notice the young and multi-cultural market around you, and acknowledge that it exists. Go to your kids’ schools. Go to the mall and look at the people who are shopping there with you. Go shopping in the next town over and partake in the same exercise. Most leaders are not used to being ethnographers, or observing beyond the things they are used to seeing. Take off the blinders. Go out and take notice.

2. Make observations

Are you seeing and understanding the multicultural influences on the non-minority Gen Z, Y and X? What about your kids and their kids? Are there multi-cultural families, individuals and stores in places you hadn’t noticed before or expected? Are you getting upset that the person in line in front of you can’t speak English? Or are you thinking that this contingency is spending dollars, and asking yourself what might be possible if you were to position your company to capture those dollars.

3. Ask questions about what you observe

Are your current channels for conversation helping to get you in sync? Are you reading and commenting on online publications and blogs? Twitter? Or, are you asking why should you bother? What are people talking about at dinner parties, conferences and chit chat while waiting for that call to begin? Start conversations by asking people about what you have observed. What have they noticed? How are they
responding?

4. Bring your observations back to the work environment

What are people talking about in your organization? Are they talking about what you have noticed? Are YOU talking about what you have noticed? Are you noticing whether your company is in sync with what you have observed? Call your customer service number. Go on your website. Are there disconnects between what you observed and how you do business? With whom can you kindle this conversation in your business?

Relevance in the new marketplace is coming to rely on the burgeoning cultural influences from and on younger generations. Don’t let “a blind eye” impede your contribution to your company’s innovation and growth.

By Terry J. Soto, Author of “Marketing to Hispanics A Strategic Approach to Assessing and Planning Your Initiative” and President & CEO of About Marketing Solutions, Inc. a strategy consulting company providing transformative business readiness and strategy consulting for profitable and enduring total market performance. Contact Terry at 818-842-9688 or by email at terrysoto@aboutmarketingsolutions.com.

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