What Marketers Should Know About Reaching Latinos
Latinos or Hispanics are currently the largest minority in the country. In the last decade alone the Hispanic market grew 60%. Although the Latino market is viewed by many as a large homogenous market, it is made up of diverse ethnic and racial groups with distinct socio-demographic characteristics.
A significant part of the market, over half by some estimates, is Spanish language dominant. Some are highly acculturated and integrated into the mainstream markets. Others are Hispanic culture-centered.
Mexico is the largest Latino market today and will remain so for the foreseeable future. Though the U.S. is already home to a significant percentage of the world Latino market, it eventually will be home to the second largest Latino market in the world. Market research projections indicate that by 2020 there will be 80 million Hispanics in the U.S. By that time, 1 out of every 5 Americans will be of Latin heritage.
Why is this growth of consequence to the general market? Not only are Latinos growing as a market segment, they are young, upwardly mobile and have money (“dinero“) to spend. Currently, Latino buying power is estimated conservatively at $600 billion dollars a year. To put it into perspective, U.S. Hispanic buying power is higher than the gross national product of Mexico.
Furthermore, research indicates Hispanics spend more money for basics like food, clothing and transportation than members of other market groups do. And they are brand loyal. These characteristics combined make them a highly desirable target for marketers.
The terms Hispanic and Latino do not refer to racial groups; rather they describe a population with common cultural and ethnic elements. Individuals of Spanish or Latin American ancestry often consider themselves Latinos. Latinos can be any race.
Hispanics may be categorized using race classifications, country of origin or ancestry. Some 59% of U.S. Latinos are of Mexican ancestry. Those of Puerto Rican heritage represent the next largest Hispanic group, with a total of 10% of all U.S. Hispanics.
Latinos are young. They have a median age of 25. Every week 7,000 Hispanics turn 18. As a new immigrant population its income earning potential is still growing and maturing. And Hispanics spend more than other groups. For example, while Non-Hispanic White and African Americans spend 68% and 64%, respectively, on basic items, Hispanics spend 75%.
There is no single, simple all-encompassing answer as to what is the best medium to reach this market. When in doubt, seek an expert or at least someone familiar and knowledgeable with the market segment you wish to reach. Approach your audience after first learning about them. Reaching Hispanic audiences effectively is about much more than just translating your existing ad, brochure or message.
For instance, Hispanic media are as diverse as the markets they serve. Print media are published in English, Spanish or both. Their scope can be local, national or international. Broadcast media are usually Spanish dominant, including several national TV networks and a broad range of radio stations. Web sites may be in one or both languages.
To reach Spanish dominant Latinos nationwide, national Spanish language television networks such as Univision and Telemundo may be ideal. In radio, there are several national chains including Spanish Broadcasting System, Entravision, Big City Radio and Hispanic Broadcasting Corporation that are immensely popular among Hispanics. In some markets, Latinos listen to the radio more than they watch television. Radio can be a highly effective medium in those markets.
At the same time, Hispanic market-themed Web sites have been going through a lot of changes. Some well-known Web companies targeting Latinos include Terra, AOL, Microsoft and Yahoo.
It may be that the Hispanic market segment you wish to reach is English language dominant and your mainstream campaign may already be reaching them. The more acculturated the target group, the greater the likelihood that mainstream efforts may be effective in reaching them. However, if the message is not effective, it may be necessary to develop Hispanic-specific messages and/or use Hispanic-oriented efforts and media to reach them.
Countless companies say they target or want to target Hispanic markets. Many of those that succeed do their homework. They study the market and its characteristics; identify its advantages and challenges; and dedicate the necessary resources to the project. We know Hispanic markets represent approximately 15% of the overall U.S. population, that 40% of all new consumers are Hispanic, that Hispanic buying power is growing and that as a group they like to make purchases. It makes sense to dedicate a reasonable amount of marketing dollars and staff time to reaching such a desirable market.
Why dedicate only .5% or 2% of your budget to reach 15% of a highly desirable portion of your target audience? Some companies do just that and are later surprised their results are not what they had hoped for. National companies successful among Latino audiences dedicate a significant amount of effort and budget dollars to courting Hispanic loyalty.
Marketing experts will tell you that to introduce a new service, product or company into the market, they dedicate at least 20% of their project budget to marketing. To penetrate the Hispanic market you seek, dedicate at least a proportionate amount of that 20% to Latino-centered efforts. That does not necessarily mean translate your ad or campaign and place it in the major Spanish language media in your area. Dedicate part of your budget to identifying the most efficient way to reach the portion of the Hispanic market you want to target.
One Latino group that is especially coveted by savvy marketers is Hispanics business owners, including women entrepreneurs. According to a recent study, Hispanic women are the fastest growing segment of women business owners. And, women-owned businesses are the largest segment of small businesses.
At the same time, Hispanic entrepreneurs want to do business with companies that offer them business opportunities. In deciding who they purchase goods and services from they look for companies who purchase goods and services from Latinos, and who include Hispanics among their administrative and managerial ranks and boards of directors.
Reaching Latino audiences effectively requires an understanding of the target market. If your company does not have the knowledge in-house, find someone who does and rely on his or her counsel before moving forward with a project or campaign.
Make sure you dedicate sufficient resources to reach your target market effectively. If suitable, develop a Latino market-oriented campaign including language appropriate support. Reaching Hispanic audiences involves more than voiceovers in ads and translations. Gain credibility by doing business with and offering opportunities to the audience you wish to reach. These tactics will help you build a long-term understanding and relationship with one of the most sought-after markets in America today.
is president of LNA World Communications, Miami, and is also president of the Hispanic Marketing & Communication Association, Miami, a nonprofit professional association dedicated to Hispanic marketing excellence. She can be reached at email@example.com .
Reproduced from National Underwriter Life & Health/Financial Services Edition, March 12, 2004. Copyright 2004 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.