The Hispanic Market – Your Client’s New Niche Presented by: Reynaldo Cano, South-West Texas Border International Trade Center and Peter Morales, SBDCNet This material is based upon work supported by the U.S. Small Business Administration. Any opinions, findings, conclusions or recommendations expressed are those of SBDCNet and do not necessarily reflect the views of the U.S. SBA. This U.S. Small Business Administration (SBA) Grant is funded by the SBA. SBA’s funding is not an endorsement of any products, opinions, or services. All SBA funded programs are extended to the public on a nondiscriminatory basis.

In our presentation, the only real common term tying various peoples together is the label “Hispanic.” We will highlight the many facets of these diverse groups and endeavor to stimulate appreciation, awareness and continuing inquiry into this complex consumer segment.

When you think Hispanic consumer, what comes to mind?

Agenda Who is the Hispanic consumer? Where is the Hispanic consumer? Why is the Hispanic consumer important to small businesses? What are some tools in helping your clients target this consumer niche?

Who is the Hispanic consumer?

28 Hispanic or Latino Categories As identified by the US Census Mexican Puerto Rican Cuban Dominican Republic Central American: Costa Rican Guatemalan Honduran Nicaraguan Panamanian Salvadoran Other Central American South American: Argentinean Bolivian Chilean Colombian Ecuadorian Paraguayan Peruvian Uruguayan Venezuelan Other South American Other Hispanic or Latino: Spaniard Spanish American All other Hispanic or Latino

Affluence Hispanics in the continental U.S. are wealthier than most in Latin America Source: Marketing to American Latinos

Age The Hispanic Market is young Hispanic median age is much lower than General Market (26 years vs. 34) Source: The Hispanic Market Primer

Age Distribution by Sex and Hispanic Origin: 2002 Source: The Hispanic Population in the US, March 2002, US Census

Heritage Among Hispanics, more than half of year olds, a very lucrative segment, were NOT born in the US Source: Simmons Hispanic Study 2002

Where is the Hispanic consumer?

Population Trends U.S. Hispanic population is larger than Canada’s total population by almost 4.5 million people It was projected that Hispanics would be the largest minority in the U.S. by the year 2010 They reached that milestone in 2003 In less than 40 years, the Hispanic market has quadrupled, a trend predicted to continue Source: Hispanic-Market.com & Current Population Survey, March 2002, PGP-5

Population U.S. is the fourth largest Spanish speaking country in the world Los Angeles is the third largest Spanish speaking city in the world After Mexico City, Mexico and Buenos Aires, Argentina

Hispanic Population as % of U.S. Population, Source: Current Population Survey, March 2002, PGP-5

Hispanic Population by State, 2002 The Hispanic Population in the US, March 2002, US Census

Hispanic Population Percentage for Selected States, 2002 (estimates) Source: 2000 Census,

Percent Change in Hispanic Population, Source: 2000 Census,

Non-Traditional Hispanic Cities Growth in cities due to shifting labor demands service industry industrial development areas Growth attributed to relocation migration Latino Population Growth,

New Hispanic Population Destinations City# of Hispanics % of Total pop. Hispanic Growth Raleigh, NC72,8506%1180% Atlanta, GA268,8517%995% Greensboro, NC62,2105%962% Charlotte, NC77,0925%932% Orlando, FL271,62717%859% Source: Latino Growth in Metropolitan America. Center on Urban & Metropolitan Policy and the Pew Hispanic Center.

Why is the Hispanic consumer important to small business?

Targeting Hispanic consumers may help your clients tap an often undiscovered niche for their small business

Hispanic Market Facts Have a combined buying power of $630 billion Buying power is increasing at a rate of 118% per year Population increased by 58% in the past ten years Buying power is estimated to surpass 1 trillion dollars by the year 2010 and 2 trillion by 2020 Between , HALF of all new consumers in the U.S. were Hispanic 40% from Source: Association of Hispanic Advertising Agencies, Missed Opportunities

U.S. Hispanic Purchasing Power Business Perspective Sustained Population Growth Sustained Economic Growth Important Segment of the U.S. market

Hispanic Households 8.5 Million Hispanic families  63% w/children under the age of 18  27% Hispanic families with 5 or more people $33,565 median Household income in % Hispanic home ownership Source: Census Bureau Facts for Features,

Hispanic Households Hispanic household growth rates outpace the average Total household growth rate, from , is 14.5% Hispanic household growth rate, from , is 31% Hispanic households tend to be larger because of extended family and larger family units Source: Cultural Access Group, Based on US Bureau of Census, Current Population Reports, February 2000

The Young Hispanic Adult years olds are a coveted target market segment More than half (68%) of this Hispanic segment are Spanish dominant or bilingual They consume Spanish and English broadcast media at nearly equal rates They are heavy readers of magazines with a focus on lifestyle, entertainment, automotive, and sports They are more persuaded by advertising in Spanish and are more loyal to companies with advertisement in Spanish Source: Association of Hispanic Advertising Agencies

Buying Style In comparison to the average U.S year old segment, Hispanics year olds Are 40% more likely to be impulsive Are 30% more likely to believe that advertisement gives true picture Are almost 30% more likely to try different brands Source: Simmons Hispanic Study 2002

Psychographic Profile of Young Hispanics They like to have the latest electronic equipment and are willing to pay for it They live in the moment Free spending helps to improve their image Concerned about looking young but don’t exercise regularly or eat a balanced diet Like cable TV Shop on the Internet more than ever Source: Association of Hispanic Advertising Agencies

Source: Hispanic Association on Corporate Responsibility

Market Place Myths We are living in a “post-ethnic”America Everyone has the basic target market profile The majority of young Hispanics only speak English and therefore only consume English language media Only older Hispanics consume Spanish-language media Source: Association of Hispanic Advertising Agencies

Segmentation Rating scale of consumer preferences based on language Spanish only Spanish preferred True bilinguals English preferred English only Source: Marketing to American Hispanics

Segment Specific Campaign English preferred

Segment Specific Campaign Spanish Preferred Spanish solidifies a connection to their country of origin

Current Situation Many businesses are afraid of doing the wrong thing in their efforts to target Hispanics Strong racial divides in society are now being replaced by more nuanced views Source: Association of Hispanic Advertising Agencies

“In-Culture” Marketing Strong identification with what mainstream Americans consider “traditional values” strong commitment to family, religion and heritage Each Hispanic group is distinct and possess different customs and idiosyncrasies Pronunciations are different depending on the country of origin Challenge is how to communicate one common message to these different Hispanic groups Source: Hispanic-Market.com

“In-Culture” Marketing Hispanic groups tend to share similarities in terms of values, beliefs, culture, and self-perception Creative communication that captures the relevant emotional triggers of a realistic Hispanic lifestyle will convey a memorable message An effective marketing goal should be to create the appropriate marketing message so you can connect with this diverse yet unique group

“In-Culture” Marketing High level of loyalty to Hispanic spokespersons, celebrities, and sponsors Adherence to the familiar due to limited brand choices in country of origin detergent Ariel Always searching for new product and service information coupons, flyer, etc. Source: Hispanic-Market.com

Only Your Client Can Determine When his/her Small Business should Target the Hispanic Niche

What are some tools in helping your clients target this consumer niche?

Essential Sources 2000 U.S. Hispanic Market Strategy Research Corporation Marketing To American Latinos By Isabel Valdés Paramount Marketing Publishing Hispanic Market Handbook By Isabel Valdés & Marta Seoane Gale Research

Tools Refer to SBDCNET website

Questions

Thank You