The Hispanic Market

Case Study: The Growing Hispanic Market

The Hispanic market is an example of a group that's growing by leaps and bounds. In 1980, there were approximately 10 million Hispanics in the United States. Today, the population has grown to over 33 million. A conservative estimate is that this number will expand to nearly 100 million by 2050.

U.S. Hispanics are young in comparison to the non-Hispanic sector. The median age of U.S. Hispanics is 26 as compared to the median age of 35 for the rest of the population. This group, however, generally has attained lower levels of formal education, with almost half not completing high school. (Businesses that focus on education may take advantage of an untapped opportunity here.)

The Hispanic market will surpass a trillion dollars in purchasing power by the year 2050. With this, there will be an increasing demand for products, advertising, research, and other marketing services.

Here are some additional facts about the Hispanic market:

• After migration to the U.S., many Hispanic consumers remain loyal to brands they grew accustomed to in their counties of origin. Colgate red (or Colgate rojo) is a good example.

• Hispanic consumers tend to be less cynical about marketing and advertising than the general market.

• Hispanic households receive one-tenth the direct mail that average U.S. households do.

Considering these facts, a business wants to target the U.S. Hispanic market might start by developing a strong brand identity for itself, if it doesn't already have one, and allocate a substantial portion of its advertising budget to direct mail. (Because Hispanics get so much less direct mail, they tend to pay more attention to it.)

The business might also send an offer in Spanish and test it against the same offer in English, being careful not to translate the copy word for word (rather re-interpreting it). What's more, the offer would be written in generic Spanish, avoiding dialects so that it maintained a broader reach among Hispanics from varied backgrounds.

In doing further research, the business might ask these questions about this (or other markets):

• How does my product or service appeal to Hispanics?

• Are there variations that can be made to make offerings more appropriate for Hispanics?

• What do I know about the culture that may impact a purchase decision?

• Have I asked my target how they prefer to be communicated with?

• Is direct mail a viable distribution channel for my offering?

• Can I provide a testimonial or endorsement that would be widely accepted?

By using the example of the Hispanic market, it's easy to see how you can develop a marketing strategy to target special interest, minority, or affinity groups. And by studying the market and speaking their language, you, too, can successfully extend your market reach.

Credit:
Art Beroff is an investment banker and corporate advisor, and is a member of the National Advisory Council of the Small Business Association. He can be reached at 718-845-3103 or by fax at 718-845-6845 or via e-mail at art_beroff@compuserve.com.

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