The next great consumer market isn't on the horizon — it's already here. It is the huge and rapidly growing U.S. Hispanic market, which numbers more than 35.3 million, or 12.5% of the U.S. population, according to Census 2000 figures.
Now the world's fifth largest Hispanic market, the United States will see its Latino population reach 86.9 million by 2025. That number will make it the second largest Hispanic market in the world, behind Mexico, according to Strategy Research Corp.'s 2000 U.S. Hispanic Market Blue Book.
Translated into purchasing power, today's U.S. Latino population spends $338.6 billion annually, or more than $927 million daily, reports the San Diego Ad Club's publication Hispanic Marketing Resource Guide. Mean household annual income is $43,570. The U.S. Hispanic Chamber of Commerce is even more sanguine about this group's impact, saying Hispanic buying power exceeds $500 billion annually.
Historically centered in major cities in Texas, Florida and California, Hispanic citizens and immigrants are finding hospitable environs in other cities with active job markets, such as Atlanta. Nonetheless, California remains the densest U.S. Latino market. One out of every three U.S. Hispanics lives there.
The power of language
Marketing separately to Hispanics pays off. Experts in this field say Spanish language ads are nearly five times more effective than ads in English.
But it isn't a market that needs to be created. “Hispanics love to shop,” says Lucy Garcia Roberts, principal of HMC Bilingual Advertising Inc., Chula Vista, Calif., near San Diego. She describes Hispanic shoppers going on mall outings on weekends with their extended families and leaving with lots of shopping bags.
Focus groups Roberts has conducted show Hispanics love the word “sale,” she says. “They like to feel they got a deal.” Hispanics also like quality merchandise, family-oriented service and later hours of operation, she notes.
Roberts works with Viejas Outlet Center and Casino in Alpine, Calif., to increase its Hispanic traffic. The shopping center completed a $17 million expansion a year ago, adding 83,000 sq. ft., bringing its total size to 255,000 sq. ft. The number of stores increased from 35 to 57. Brand-name outlets added include Polo/Ralph Lauren, Perry Ellis, Levi's Dockers, Casual Corner, Eddie Bauer, Pacific Sunwear, Liz Claiborne Shoes and Bass. Already in the center, which opened in 1998, were Tommy Hilfiger, Gap, Nine West and Nautica.
Located 30 minutes from San Diego, Viejas also is easily accessible by shoppers from Tijuana, Mexico. “We had always thought about marketing to Hispanics,” says Bob Dye, general manager. He had noted many cars at his center with BC (Baja California) license plates. First, Roberts familiarized Dye with his potential market by showing him some of the border area's more affluent communities. And second, she convinced him that events would be appealing to Hispanics and others as well.
“Shopping should be an experience,” Roberts says. “You want to have a great time as you spend your money.”
A Mariachi Invitational Festival filled the bill. A Mariachi, Roberts explains, is a group of about 13 musicians and singers. “I was dubious at first,” Dye says of the plans, “but we kicked butt trafficwise.” “The Battle of the Mariachis” drew 30,000 people on a Sunday in May 2000. “Some stores reported an increase in sales that day of more than 120%,” Roberts says.
Helping to add to the turnout were the invitations that went to local schools and semi-professional groups to compete in the festival. Participating students brought their families to the event.
Roberts and Dye built on that success with a Multicultural Festival, timed to coincide with the expansion's grand opening in fall 2000, and featuring bands and dancers representing China, Africa, Polynesia, the Philippines, Brazil, Scotland and Mexico. This event, too, drew 30,000 attendees.
Both events were held again in 2001 to great success, Dye reports.
Dye and Roberts aim back-to-school ads to Hispanics in Spanish-language print media and radio spots. “But you can't just translate an English ad,” Roberts cautions, recalling when Chevrolet tried to market its Nova model. “No va in Spanish means it does not go,” Roberts points out.
Marketing savvy
Other advertising Viejas Outlet Center aims at Hispanics includes sending blue bags filled with fliers and coupons to a Roberts-developed mailing list of 175,000 in Tijuana to lure Mexican shoppers. And, a billboard at the Tijuana-San Diego border crossing maximizes the long wait time people experience at the United States' busiest crossing point. Billboards will also go up in Mexicali and at the airport.
Bilingual signage at Viejas isn't necessary, Dye and Roberts believe. “Hispanic shoppers like brand-name clothing,” Roberts notes. Store brands are what Latinos look for. Dye wants the center to appeal to all nationalities, with English as the common base.
Nevertheless, some of the stores are starting to hire Spanish-speaking personnel, Roberts reports. It's all about serving your customer.
Paula Stephens is an Atlanta-based writer.
Market segmenting
“There's no such thing now as mass marketing — it's micro marketing today,” asserts Victor Ornelas, president and CEO of Ornelas & Associates, a Dallas-based marketing communications agency.
Modern marketers must go beyond simple demographics and embrace “psychographics,” the study of the attitudes and beliefs of specific types of consumers, he says.
Ornelas, who counts Nissan and Kimberly-Clark among his clients, advises Fortune 100 companies on marketing to Latino consumers. To target the Hispanic market, retailers should recognize that segmentation is becoming the norm, Ornelas says. He tells his clients there are four different mindsets or segments of the Latino market:
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Nationalists. For these primarily 35 and older Hispanics, Spanish is the dominant language, tradition is important, and “there is a strong live-for-today mentality.” Nationalists represent about 20% of the Latino market.
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Eager Adopters. Typically age 35 and younger, these Latinos “came here for the best of both worlds.” They prefer to speak Spanish but rapidly become bilingual. Eager Adopters make up about 34% of the market.
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Fusionists. The first generation born in the United States, these Hispanics are bilingual and usually aged 18-49 years old. They represent 25% of the market.
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Assimilators. Their families having lived in the United States for two or three generations — these Hispanics use English as their dominant language — are “Latino proud.” They represent 21% of the market and are frequently influential in the community.
Ornelas says his client Bank One markets to all four groups, with the bulk of its advertising dollars aimed at the Eager Adopters and Fusionists to persuade them to use a bank. Latinos tend to fear banks, Ornelas explains, and use money orders or cash for most transactions. Bank One targets each segment for different financial products, such as checking and savings accounts, home mortgages and IRAs, as the Latinos “move up the ladder of acculturation.”
For Nissan's regional marketing, Ornelas uses Spanish-language television as the primary medium because “it's watched by all the [segment] groups.” The two largest Spanish-language networks are Univision, with 85% of the market, and Telemundo, he says.
And, as possibly the first wave of what's to come, Nickelodeon is now accepting Spanish language commercials, Ornelas notes. Children's pizza chain Chuck-E-Cheese is also speaking Spanish to draw its targeted consumers.
— Paula Stephens
