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American City Business Journals Inc.
Hispanic Market No Longer A Sleeping Giant
January 31, 2003
For far too long, only interested demographers and savvy marketers fully appreciated the looming potential of the Hispanic sector as a consumer category to be reckoned with. But the sleeping giant has finally awakened, and every marketer must now come to terms with a buying power that can no longer be ignored.
The raw numbers attest to a juggernaut in the making:
Hispanic-Americans now comprise 13.5 percent of the U.S. population, numbering approximately 39 million in 2002 and projected to grow to 50 million by 2007.
The Hispanic sector is expected to grow at an astonishing 29.1 percent rate during the next five years, eclipsing African-American (7.9 percent) and Asian-American (23 percent) growth rates.
Hispanic-American buying power, currently totaling $580 billion, is expected to reach almost $1 trillion in five years.
Currently, the states with the greatest concentration of Hispanic buying power include California, Texas, Florida, New York, Illinois, New Jersey, Arizona, Colorado, Georgia and New Mexico.
Of more interest, the fastest-growing states in Hispanic buying power are predominantly in the South and include North Carolina, Arkansas, Georgia, Tennessee, Alabama and South Carolina.
Hispanic-Americans spend on average $32,735 versus $38,045 for all American consumers. They spend more than average on groceries, telephone services, furniture and apparel; about the same on restaurants, alcoholic beverages, utilities and fuels, household products and appliances, and electronic equipment; but less on health care, education, insurance, pensions and Social Security, fees and admissions, and tobacco products.
The future is now
Ernest Bromley, chairman and CEO of Bromley Communications, a leading Hispanic marketing communications com-pany with clients such as Procter & Gamble, Burger King and Western Union, contends that most American marketers do not fully comprehend the value and extent of the marketplace. Notes Bromley, "The Fortune 100 companies get it; companies such as P&G, Coca-Cola, McDonald's, Anheuser-Busch. But marketing budgets geared to the Hispanic market always have to be justified more carefully. It's a familiarity thing. People do what they're comfortable with."
Bromley notes that in some Hispanic-heavy markets, such as Miami, Houston and Los Angeles, Hispanic television programming from the likes of Univision and Telemundo outpulls traditional network fare, an obvious indicator of the need for a mix of English and Spanish advertising in those markets.
"Initially, the Latino immigrant came solely for economic opportunity, the ability to send dollars back home. But they got a good job, met someone, got married, and now seek the American dream just like everybody else," Bromley said.
And, like most Americans, they are heavily brand-conscious. Smart brands can command the marketplace with the right effort and commitment.
Advice to the marketer
For the small to midsize business contemplating a foray into the Hispanic marketplace, Bromley suggests the following:
Ask the question, who is your customer? Try to quantify the size, dimension and potential of the Hispanic marketplace in your city or region.
Be bilingual in your communications, particularly with in-store signage and merchandising.
If possible, hire a Hispanic agency or consultant for marketing help. This is one instance where expert knowledge counts.
Manuel Bellod, CEO of Terra Networks USA, an Internet portal that provides content for the 14 million Hispanics connected to the Internet, provides a similar perspective. "Never underestimate the potential, size and purchasing power of the marketplace," he says.
He also suggests the following:
Never patronize the market. Always respect the culture.
Remember that the Latino respect for family is a core belief and fundamental practice.
Loyalty is a big issue with Hispanic consumers. If they're familiar with your brand and trust you, they will buy the product and pay the price even though they are discriminating price shoppers.
Effective communications is more than just translating an English message into Spanish. It requires a communication process that must be built from the ground up.
Bellod sums it up best when he says about the Hispanic-American consumer, "You must earn the right to sell to them."
Nucifora is an Atlanta-based marketing consultant.