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P&G's Hispanic Accent… How Wells Fargo Banks On Hispanics

P&G's Hispanic Accent

Multicultural-marketing head Graciela Eleta talks about the consumer-product giant's in-depth Latino strategy

March 15, 2004
Copyright © 2004 BUSINESSWEEK / The McGraw-Hill Companies Inc. All rights reserved.

Cincinnati is far from a hotbed of Hispanic immigrants. But the doyenne of that Midwestern city -- Procter & Gamble Co. -- is perhaps the premiere Hispanic marketer in Corporate America today. Buoyed by Latinos' fondness for P&G (PG ) brands from Gain to Downy, the company sank some $90 million into Hispanic advertising last year, about 10% of the ad budget for P&G's top 12 brands and a 28% increase over 2002.

The dynamic growth of the U.S. Hispanic population, now numbering some 38.8 million, is driving an ever-bolder Hispanic strategy at the consumer-goods giant: In early 2000, P&G formed a multicultural marketing unit split between Cincinnati and Puerto Rico, and dedicated to Hispanic marketing. One example of the new push: At last year's Grammy Awards, P&G ran a Spanish-language ad for Crest on CBS, a company first.

In early February, BusinessWeek Correspondent Brian Grow spoke with Graciela Eleta, 41, vice-president and general manager of P&G's multicultural-marketing team, about why the company is ramping up efforts to capture the Hispanic market and whether Hispanics are changing the way America does business. Following are edited excerpts from their conversation:

Q: You've said Hispanics are a key cornerstone of future growth in North America for Procter & Gamble. Why?

A: It's obvious -- the changing face of North America. Today, the ratio of people over 70 years old is one to five [for Caucasians] vs. people of ethnic origin. In the less-than-29-years-old category, the ratio is one to one. So, you can expect that a full one of every two consumers in North America will be of ethnic origin -- and about a quarter will be Hispanic.

We're looking at the multicultural arena as the wave of the future. Not participating in this growing demographic is no longer an option. And the Hispanic is a valuable consumer. Look at categories like shampoo -- we're significantly over-indexed among Hispanic at a rate of 290. In baby care, it's an index of 304. For fabric conditioners, it's 212. Deodorants and colognes, it's 194.

Q: What does over-indexing mean?

A: The dollars spent by Hispanics vs. the dollars spent by the general market consumer. I'm indexing Hispanics over Caucasians.

Q: Those numbers vividly show Hispanic influence. Was that realization the genesis for the creation of the multicultural-marketing unit at P&G?

A: Yes, it was the combination of the demographics and value of the [Hispanic] consumer that prompted P&G to call me into leading this unit. I also believe there was discontent from senior management about the way that we had been attacking this opportunity in the past. All of us believe we needed a horizontal process that captured all of the knowledge and learning and capabilities to attack [the Hispanic market] in North America.

Q: Since 57% of Hispanics, according to your research, are so-called "high scent seekers," does that mean the positioning of Gain as "the scent of clean" in the general market fell out of research regarding Hispanics?

A: It doesn't only fall out of that finding. It falls out of the fact that Gain is already significantly overdeveloped as a franchise with Hispanics -- our market share is significantly higher in Hispanic markets than it is in the general market.

Once you understand that, then you start to ask: Why is it so overdeveloped? The answer is that scent is such an important thing for Hispanics. So then you think, "How do I grow my franchise? I grow my franchise by bringing different, high-impact character and intensity scents that are appealing to Hispanics." And then you produce advertising that speaks to the Hispanic consumer, vs. just airing the [general] U.S. advertising.

Q: You've said that P&G wouldn't dream of launching a product without first testing it with Hispanics, right?

A: Don't use the word "dream." We're at a point where in several categories we are testing our product launches with Hispanics because we believe that it's important.

Q: How significant of a change is that from the early 1990s?

A: It's still the reality for most small brands in this company that we test our products almost uniquely with general market consumers. Those panels did include, in some instances, English-speaking Hispanics. As our unit came in, and as the demographics in the U.S. began to change, it became obvious that those groups were not representative of the changing face of North America.

We have influenced the [company] -- and it's not everywhere yet -- to test with Spanish-dominant Hispanics. The next phase is testing whether we're winning with Spanish-dominant Hispanics -- and we already have that testing in diapers. That's a big change from what we were doing in the early 1990s.

Q: What will be the next category where testing with Spanish-dominant Hispanics will begin?

A: The next logical move is all the top-10 brands in the company. We're already making inroads across [skin] care, dish towels, laundry. It's not just one brand -- it's improvement across all of those brands.

Q: What are the key requirements for effective marketing to Hispanics in the U.S.?

A: Spending the time, effort, money, and resources to really understand the competition, the consumer, and the shopper. You have to make sure you have availability and assortment at the store. You can do all the marketing you want, but if, at the moment of truth, the consumer doesn't find the right assortment, your efforts are wasted.

Then, you make sure that you have the right message -- including the right language and copy. So, the process is: understanding, assortment, relevance.

Q: Are Hispanics changing the way America does business?

A: Yes. They are forcing companies to come to grips with marketing as we have known it in the past. The era of efficient marketing -- where you blanketed America with one, generic, white-bread message -- is gone. With fragmentation -- cable TV, the Internet, Hispanics, African Americans -- you really are faced with the challenge of how to touch that consumer in a cost-efficient, relevant, and timely way.

I think Hispanics are one of those many, many changes. Companies like ours are faced with adapting to this new world. We're being successful because we acknowledge that the world out there has changed. We're anticipating those changes and reacting to them.

Q: Are Hispanics a critical part of that fragmentation?

A: Yes, absolutely. First, you had media fragmentation. Then, you had Hispanics, African Americans, and ethnic minorities becoming a quarter of the population. So it was no longer acceptable not to market to them specifically. We can no longer assume that we can do mass marketing and effectively reach these targets. All of that put together has really shaken the industry.

If you rate Hispanics and Caucasians on certain attributes, it's interesting:

1) I need to find excitement and sensation in my life: Hispanics rate an 80, Caucasians are at a 51;

2) I need to get more pleasure out of my life: Hispanics rate a 78, Caucasians are a 73.

You ask if Hispanics are changing the way America does business, and if so, how? We all need to wake up the fact that Hispanics are seeking different kinds of pleasures, sensations and new experiences.

How Wells Fargo Banks On Hispanics

Its L.A. regional president says Wells is now opening 22,000 new accounts a month by tailoring programs to meet Latinos' needs

March 15, 2004
Copyright © 2004 BUSINESSWEEK / The McGraw-Hill Companies Inc. All rights reserved.

As the nation's fourth-largest bank, San Francisco-based Wells Fargo & Co. (WFC ) concentrates its growth largely in the West and Southwest U.S. One of its fast growing markets is the population of Mexican-Americans and Mexican nationals along the border and in California and other border states. To tap into this group, Wells Fargo is increasingly tailoring its products and marketing to accommodate the economic needs and cultural traditions of this population.

BusinessWeek Correspondent Louise Lee recently spoke with Wells Fargo's Shelley Freeman, regional president overseeing the bank's Los Angeles metropolitan area, which includes Los Angeles, Ventura, and Santa Barbara counties, and parts of San Bernadino County. Edited excerpts follow:

Q: What has been the bank's primary way of reaching out to the Hispanic market?

A: One of Wells's most crucial means to grow in the Hispanic market is our acceptance of the "matricula" card -- a form of identification issued to Mexican nationals by the consulates -- as a valid form of identification to open a checking account. We started accepting the matricula card in November, 2001. Since then, we've opened 250,000 new accounts from people using the card as ID.

And the rate of these account openings is increasing: In the months after November, 2001, we were opening accounts for people using the card at the rate of 3,400 a month. But during the last three months, the rate has jumped to 22,000 a month.

Q: How does Wells adapt its branches to the Hispanic culture?

A: Marketing materials are in English and Spanish. Employees in branches in Hispanic communities are both bilingual and bicultural. We hire from the local area. Branches serving Hispanic neighborhoods have a Latin-style decor and play Spanish-language radio in the background. Because many customers come in with their kids, branches have long benches for the kids to wait on and are stocked with coloring books.

Q: How does the bank get the word out about its services?

A: While we do buy advertising on Spanish language TV and radio, ads aren't always the best way to go, because of the informal communication network in this population. And many unassimilated Hispanics do hesitate to come to our branches. So more than a year ago, we started hosting in-home seminars in the heavily Hispanic community of Pacoima, Calif. It works because many Hispanics feel more comfortable being in a friend's home.

Q: What occurs during an in-home seminar?

A: Typically, one host will invite 15 or so friends, neighbors, or relatives into his home for the event, usually held around dinnertime. Attendees bring food. Someone from the branch talks about topics ranging from saving for the kids' college tuition, to buying a house and establishing good credit, to very basic matters like how to write a check. We're planning similar seminars in South Los Angeles in 2004.

Q: How does Wells adapt products to cater to the Hispanic market?

A: We realized that among many Hispanics, people other than parents or spouses contribute to the total family income. So we consider the income of other family members when we evaluate income. We even look at income from another family. And we also consider cash income, since a lot of these individuals are paid in cash.

Q: What other products are designed for this market?

A: We're unveiling a pilot test in Los Angeles called the Opportunity Checking Account, aimed at people who don't qualify for regular checking accounts. And in 2002, we introduced Intercuenta Express. That service lets account holders send money to their relatives' local accounts in Mexico. It costs a flat fee of $10 to send $1,000 back.

Q: Do efforts to reach out to undocumented Hispanics also benefit Wells's relationships with assimilated Hispanics?

A: Yes. The assimilated population appreciates the bicultural nature of our approach. It's not just about having our marketing materials in Spanish. It's about showing up in the community. The assimilated population cares about the nonassimilated population. Both populations appreciate our approach. Plus, many assimilated Hispanics prefer to get information about our products in Spanish.

Q: How has Wells tried to learn about this community?

A: You learn from talking to people. You learn more from the streets of Pacoima than at a seminar at the Ritz Carlton. Last year, a handful of very top executives, including CEO Richard Kovacevich, traveled to L.A. to meet with the publisher of La Opinion, the big Spanish-language newspaper in L.A. They met with experts on Hispanic politics, demographics, and health and human services. [These experts] immersed us in learning about this community.

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