The recent release of racial and ethnic data by the U.S. Census Bureau has created an increasing interest in Asian-American markets.
Currently Asian-Americans form the third-largest minority group in the United States, numbering 11.9 million in the Census 2000 count, forming 4.2% of the total population.
Between 1990 and 2000, the Asian-American population grew by 72%, far outpacing the U.S. total population growth of 13%. Current trends in immigration indicate that the Asian-American population will continue to grow rapidly, and by 2010, the U.S. Census Bureau estimates it will form 5% of the total population.
Yet, in spite of being a relatively small population, an increasing number of financial services companies are targeting the Asian-American market. Why? In large part this is because, as a group, they form a very viable niche market–one that is highly educated and earning high incomes.
For example, the U.S. Census Bureau reports that an amazing 44% of Asian-Americans has at least a college degree (compared with a quarter of the general population), and 22% of Asian-American households earn $100,000 or more annually (compared with 14% of all U.S. households).
Other government data show that more and more Asian-Americans are becoming business owners, many of whom are running very profitable businesses. It is no wonder that as companies look for new markets, their attention is drawn toward the Asian-American market.
Here are some general facts to keep in mind as you build your marketing strategy.
Recognize the fact that Asian-Americans do not form a single homogeneous segment. There is incredible diversity among Asians–they are of different races, come from different countries, speak different languages and have different cultures.
Note that nine in 10 Asian-Americans represent only six ethnic groups: Chinese, Filipino, Asian Indian, Korean, Vietnamese and Japanese (See Table 1). And, each of these ethnic groups forms a viable niche market, requiring its own specialized marketing strategy at the local level.
Realize that Asian-Americans have an increased need for protection products since they are more likely to have families with young children. For example, more than half of Asian Indian households consist of married couples with children under the age of 18, compared with only 30% of the total U.S. households.
And often, households will also include elderly parents or other relatives.
Providing in-language information is a must (though not as much for Asian Indians, who tend to learn English in India). This is especially true for those subgroups that are continuously being infused by immigrants.
For example, even though Chinese-American communities have existed in the United States for more than 150 years, Census 2000 data indicate that eight in 10 Chinese-Americans speak a Chinese dialect at home. This is because of the influx of Chinese immigrants over the last two decades.
Take advantage of the in-language media–newspapers, radio and cable TV–to make your company (or agency or producers) more visible in the Asian segment you are targeting. Immigrants avidly consume them.
LIMRA Internationals study of Chinese-Americans shows that they also prefer to receive information on the Internet, which is not surprising given their high usage of and access to the Internet.
Brokerage houses like Charles Schwab & Co., San Francisco, and Fidelity Investments, Boston, have launched Chinese-language Web sites with great success.
Note that Asian-Americans who have been in the United States for many years tend to have a large influence on recent immigrants. Word-of-mouth and referrals become especially important ways of receiving financial information–from whom to purchase a policy, where to go to get financial advice and so on.
Hire Asian-Americans to service their own communities. LIMRA studies have repeatedly shown that consumers want to talk with producers who speak their language, know their culture and are sensitive to their needs. Then, train your producers to ask for referrals.
Brand recognition is the key to penetrating any market. LIMRAs study of Chinese-Americans shows that they regard a companys financial stability and reputation as extremely important. So, these are the attributes companies must emphasize in their branding efforts in the Chinese-American community.
Brand awareness is also important from the producers perspective. The same LIMRA study mentioned above shows that close to eight in 10 Chinese-Americans indicated that it is important for a financial representative to represent a well-known company. And, according to a very successful producer in this market, “If the Chinese community does not know a companys name, it is very hard for their agents to make sales.”
After everything is said and done, remember that cultural sensitivity is key to winning the trust of any immigrant group.
Nilufer R. Ahmed, Ph.D., is a scientist in LIMRA Internationals Marketing Research Center. She can be reached at email@example.com.
Reproduced from National Underwriter Edition, April 21, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.