1. 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.

2. 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.

3. When you think Hispanic consumer, what comes to mind?

4. 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?

5. Who is the Hispanic consumer?

6. 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

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

8. Age The Hispanic Market is young Hispanic median age is much lower than General Market (26 years vs. 34) Source: The Hispanic Market Primer http://www.hispanic-market.com/a_primer.html

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

10. Heritage Among Hispanics, more than half of 18-34 year olds, a very lucrative segment, were NOT born in the US Source: Simmons Hispanic Study 2002

11. Where is the Hispanic consumer?

12. 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

13. 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

14. Hispanic Population as % of U.S. Population, 1960-2002 Source: Current Population Survey, March 2002, PGP-5

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

16. Hispanic Population Percentage for Selected States, 2002 (estimates) Source: 2000 Census, http://www.census.gov

17. Percent Change in Hispanic Population, 1990 - 2000 Source: 2000 Census, http://www.census.gov

18. 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, 1990-2002

19. New Hispanic Population Destinations City# of Hispanics % of Total pop. Hispanic Growth 1980-2000 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. http://www.pewhispanic.org/site/docs/pdf/final_phc-brookings_paper-appendix-tables.pdf

20. Why is the Hispanic consumer important to small business?

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

22. 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 2000-01, HALF of all new consumers in the U.S. were Hispanic 40% from 90-00 Source: Association of Hispanic Advertising Agencies, Missed Opportunities

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

24. 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 2001 46% Hispanic home ownership Source: Census Bureau Facts for Features, http://www.census.gov

25. Hispanic Households Hispanic household growth rates outpace the average Total household growth rate, from 1990-2000, is 14.5% Hispanic household growth rate, from 1990-2000, 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

26. The Young Hispanic Adult 18-34 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

27. Buying Style In comparison to the average U.S. 18-34 year old segment, Hispanics 18-34 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

28. 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

29. Source: Hispanic Association on Corporate Responsibility http://www.aacc.nche.edu/hacr/demographics/expenditure_2.html

30. 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

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

32. Segment Specific Campaign English preferred

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

34. 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

35. “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

36. “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

37. “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

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

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

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

41. Tools Refer to SBDCNET website http://sbdcnet.utsa.edu

42. Questions

43. Thank You