Stake Your Claim in the Multicultural Market (978 words)
By Rick Blume
You know the numbers in the multicultural markets: 39 million Hispanics, 37 million African-Americans and 12 million Asian-Americans. The Census Bureau has documented these three groups as the fastest growing in the country, and soon they will make up close to 50 percent of America's population—half of that of Hispanic descent. By 2007, with the general market's buying power projected to be in excess of $7 trillion, the multicultural market's buying power will be more than $2 trillion; Hispanics' spending power will rise to $927 billion, African-Americans' to $645 billion and Asian-Americans' to $454 billion.
It's no surprise that marketers are testing the waters of multicultural marketing. But what is a surprise is why hasn't everyone? In my opinion, three things are crystal clear:
Marketers don't understand the overwhelming potential.
Marketers fail to understand the urgency of establishing a dominant brand.
Marketers have misconceptions about ethnic cultures.
You would think marketers would find it very difficult to ignore the numbers when more than 30 percent of the population currently is made up of these three ethnic markets. Especially the Hispanic and Asian-American sectors, where more than 50 percent of their growth comes from immigration, ensuring a continuous fresh audience and creating an increased need for products and services.
For those who don't know, Hispanics are very brand loyal. Despite the myth that Hispanics are a poor market, the reality is that education and income levels are rising rapidly, with 14 percent of Hispanics ages 18 to 34 earning annual incomes of more than $50,000. The penetration of credit cards is more than 50 percent in the Hispanic sector, and increasing. The same holds true for African-Americans, where a record-high 17 percent of adults ages 25 and older earn a bachelor's degree. And Asian-Americans are already at the top of the scale in income and education. The result: Hispanics, African-Americans and Asian-Americans are enjoying greater discretionary income than ever before.
Every marketer's ultimate goal is to dominate its market. Those marketers who establish this dominance in ethnic markets early on will be the winners. Brand recognition and loyalty score very high in these markets. Ethnic consumers appreciate being marketed to in their language of choice, or with culturally relevant offers in a meaningful way. Response rates are much higher than what companies typically receive in the overall marketplace. Many savvy direct marketers, such as Rodale Inc., Columbia House, BMG, The Readers Digest Association, Covenant House, Salesian Missions and other Catholic fundraisers have known this for quite some time.
Direct Mail is Welcome
One of the best ways to reach multicultural markets is through direct mail. These ethnic groups love to receive direct mail, especially Hispanic and Asian-American immigrants, because they receive so little marketing in their native language. And they will continue to prefer their native language long after they've learned English and assimilated in other ways. To these two groups, direct mail is typically new and exciting … something they didn't receive in their countries of origin to the same degree most Americans do in the United States.
Another reason direct mail is so successful with ethnic markets is because shopping at home is less intimidating than dealing with pushy sales people; or not receiving respect because of nationality, race or color; or not being able to communicate effectively because of a language barrier.
Maybe the best reason direct mail works with first-generation ethnic markets is because the buying process is usually a family decision, and it's easiest to make such decisions when the prospect's family is all around the dining room table reading a mail piece.
The Ethnic List Market is Growing
Contrary to some popular beliefs, there are many multicultural lists available, both postal and e-mail, and their number is growing. While the count is considerably less than that of the general market (more than 25,000 general lists compared to fewer than 1,000 ethnic lists), some of the biggest and well-known companies rent their ethnic names. Some of these lists on the market now (in addition to lists offered by the savvy direct marketers mentioned earlier) are from Editorial Televisa magazines, Family Digest magazine, Univision, Terra.com, Conde Nast/IPG magazines, Radio Unica, Bookspan's Mosaico, Midnight Velvet catalog and Essence magazine.
Some principles to keep in mind when renting ethnic lists:
Do your research. Rent lists that have been generated from responses of individuals of the particular ethnicity you are looking to reach. This may sound obvious, but there are many lists that make claims of being ethnic, but are not what they appear to be.
In the Hispanic market, use Spanish-language generated lists when mailing in Spanish, and use English-language surname lists when mailing in English. Both types seem to work for bilingual mailings. However, the greatest responses are achieved with Spanish-language lists.
In the multicultural market, TV-generated lists work well, albeit, not as well as lists generated by direct mail.
Review your results geographically, as you may find differences in response rates due, in part, to where different nationalities have settled.
Proceed with a Plan
Now is the time to act, but more important, to act wisely. Do not take these markets for granted; there are many nuances. Ask specialists to help you develop ethnic marketing strategies, culturally relevant offers, and in-language copy and creative. Most of all, use a list specialist who has a thorough understanding of the ethnic markets, all the available lists/databases, and the differences between them. I don't have to tell you how important list selection is to the results of your mailing.
Direct marketers who are already marketing to one or more of these ethnic groups understand the need to get out there first. For those of you who are not, this is the time to start planting your seeds so you can reap the benefits in the near future and for years to come.
Rick Blume is vice president, multicultural marketing at list firm 21st Century Marketing. He specializes in building and marketing ethnic lists. In acknowledgement of his 15 years in ethnic marketing, Blume recently was named 2003 Hispanic Direct Marketer of the Year by the Direct Marketing Association's Directo Council. He can be reached at (631) 306-5264, or at email@example.com.