Targeting Ethnic Markets (US example)

International flavour

Nov. 21, 2003

Businesses looking for new markets cater to surging minority population

A teenager raps in Spanglish to Pepco customers in a commercial about power plant safety. Southwest Airlines advertises its 1-800-VAMONOS reservation line on Spanish-language television network Univision. A Citibank branch in Rockville employs Mandarin speakers for the large Chinese and Taiwanese population in that area. A Fannie Mae commercial depicts a black family walking into its new home.

Targeting ethnic markets is nothing new. Large companies such as McDonald's and Coca-Cola have long recognized the buying power of minority consumers. Local businesses such as Pepco and Giant Food have hired ethnic marketing specialists.

But as that buying power grows with the population explosions of blacks, Asians and Hispanics, more businesses are realizing that their futures depend on paying heed to the numbers.

Many minority members

Ethnic and racial minorities account for a big portion of the local population.

In Prince George's County -- which some county officials dub the wealthiest black county in the nation -- about 63 percent of the 800,000 residents are black and 7 percent are Hispanic, according to the 2000 Census.

In Montgomery County, 15.1 percent of the nearly 900,000 residents are black. Asians and Hispanics each make up more than 11 percent of the population.

Frederick County also has a growing ethnic population. More than 10 percent of Frederick residents are black, Hispanic or Asian.

Nationally this year, blacks are expected to spend $688 billion, Hispanics $653 billion, Asian-Americans $344 billion, and American Indians $45.2 billion, according to the Selig Center for Economic Growth at the University of Georgia. That's a total of $1.7 trillion among these four groups.

By 2008, the Selig Center projects, these minority groups will have a combined buying power of $2.5 trillion, a 46 percent increase. That's far more than the projected increase in total buying power of all Americans, which the center estimates at 29 percent, from $8.2 trillion this year to $10.6 trillion in 2008. That's partly because the minority population of the United States is projected to grow much faster than the overall population.

Maryland's blacks are projected to spend $38.8 billion this year, according to the center. Maryland is the sixth-largest black market in the country, after New York, California, Texas, Georgia and Florida. Asian buying power in Maryland is projected at $7.5 billion this year and Hispanic buying power at $5.6 billion.

Businesses that ignore these groups' economic clout do so at their own peril, analysts say.

The businesses
that market

Food retailers, service providers and other businesses know that marketing to the diverse Washington, D.C., area population can be lucrative.

Not long ago, Praful Mehta had to drive nearly 100 miles to Edison, N.J., or Queens, N.Y., to get decent Indian food to satisfy his craving for his native cuisine.

Now Mehta, who became head of ethnic marketing at Giant Food in Landover last year, stocks basmati rice, raw lentils and other ethnic cuisine at Giant stores across the region.

Besides stocking its stores with foods that appeal to minority customers -- and, increasingly, the general population -- Giant pitches these products in print media and on radio and television stations that target minority groups.

By the time Mehta is done, he said, 25 area Giant stores will stock 8- to 20-foot sections of authentic south Asian food. South Asians -- Indians, Pakistanis and Sri Lankans -- are becoming a major food-buying consumer group in Maryland, Mehta said. The sections will stock raw lentils to make soupy concoctions called dahls, wheat flour for Indian breads called rotis, plus popular sauces.

Giant is also helped by consumers' increasing sense of culinary adventure, which is reflected in the popularity of TV shows and even cable networks devoted to travel and food.

"The person next door to them is cooking something different," Mehta said. "A lot of [ethnic] food is bought by the traditional white customers."

In Langley Park, which has a high concentration of Hispanics, Mehta is phasing in dairy sections to include Salvadoran cheeses, pupusas -- cornmeal dough usually stuffed with meat or cheese -- and drinkable yogurts.

Mehta emphasized that the local Hispanic population comprises several different nationalities and ethnicities that must be courted individually. The area's large Salvadoran influence is reflected in the merchandise that he stocks.

He also said that many groups slip beneath the Census radar screen. "A lot of the time, the data that we see through the Census does not show the real picture," he said.

To figure out what to stock, Mehta sends "ethnic specialists" to Giant supermarkets. These people survey customer likes and dislikes; those survey results are translated into ethnically tailored merchandise.

As a result of this research, Mehta is developing Caribbean food sections in some stores.

While Giant's practices are typical of traditionally nonethnic companies branching out to target minority shoppers, traditionally ethnic businesses are diversifying, too.

For example, Korean Korner International Market in Wheaton, which catered exclusively to Korean-Americans when it opened in 1991, is adapting to the changing demographics.

"You have to be smart," store manager Hejean Morton said. "I see there are a lot of Hispanic population growing in this area, and you have to be prepared to deal with what's going on in the market."

Morton began advertising in an independent weekly, the Washington Hispanic, plus local Vietnamese and Chinese newspapers.

Now the store has its own "Spanish-food" aisle, with everything from tortillas to beans and cacti. Her customers are Salvadoran, Puerto Rican, Indian, Korean, Chinese, Vietnamese and Filipino. Morton has found that Asian Indians tend to buy eggplant and radish, while Hispanics seem to enjoy specific dairy products.

Service providers

Lawyer Millard S. Bennett is looking out for his future.

Bennett is a partner at the general-practice law firm of Stein, Sperling, Bennett, De Jong, Driscoll & Greenfeig PC, which has offices in Rockville and Langley Park.

About eight years ago, Bennett hired a Salvadoran advertiser to target the growing Hispanic communities in Montgomery and Prince George's counties.

The firm has since participated in ethnic festivals and advertised in Spanish-language print and broadcast media.

"You can target [ethnic groups] in multifaceted ways," Bennett said. "We utilize the television, phone books, but we also do a lot of outreach."

Bennett said most of his Hispanic clients seek legal advice about job injury or loss or as entrepreneurs seeking to start or expand their business.

"I think it's a fertile area. They are a growing community; I think we're looking more for the future."

Bennett said he expects the Hispanic market to grow, and he wants to be prepared.

"You sort of have to plant seeds in order to move up," he said.

Bennett said name recognition is crucial because most of the firm's clients come through word of mouth.

Harold Norken agrees that name recognition is crucial. Norken, who owns an Allstate Insurance agency in Gaithersburg, has always catered to a Hispanic clientele by hiring bilingual speakers, but in July, he went a step further. He changed his company's name from Norken and Son Insurance to Norken Ramirez Insurance Agency, incorporating the name of a partner, Giovanni Ramirez, to boost name recognition in the Hispanic community.

"It emphasizes something that's already there," Norken said, "that we're here to service the community the best way we can."

Ethnic ad agencies

Maya Advertising & Communications Inc. in Washington specializes in marketing to Hispanics and has reported $5 million in revenue this year from clients such as Pepco, Comcast and Verizon.

"If a business wants to succeed, it has to do multicultural outreach," said company president Luis Vasquez-Ajmac. "I'm still bewildered by why people are not spending locally on marketing to ethnic groups."

El Salvador native Claudia Preza Rivas, head of Rockville advertising agency CPR Communications International Inc., said she provides crucial service to her clients, who otherwise wouldn't know how to market to the Hispanic community.

Her 30 clients include used-car dealerships, doctors and lawyers, in addition to grocery stores, banks, chiropractors and nightclub promoters.

"You've got to know where Salvadorans buy," she said. "It's amazing how much cash these people have to spend."

Inexpensive ways
to reach ethnic groups

McGhee Williams is the managing director of one of the nation's largest black-owned ad agencies, Burrell Communications, a sister company to Leo Burnett USA.

Burrell, which was launched in 1971, lists among its clients such familiar names as Procter & Gamble, McDonald's, Sears and GlaxoSmithKline.

Williams said that grass-roots efforts and public relations are the best cheap ways to market to the African-American community.

"Reach out through churches, hair salons and barber shops," Williams said. "I would call these key institutions in the African-American community."

Bowie State University marketing professor James Dixon has similar advice.

He said the best way to get a business's name out there is become involved with the community.

"Sponsor a Little League team," Dixon suggested. "Hire an intern from that community or offer volunteer opportunities that will lead to their professional development and growth."

"That shows me [as a consumer] that the business has common interest with my concerns or my issues," he said.

Vasquez-Ajmac urged businesses to hire marketing agencies that are familiar with the communities.

"It's more than language," Vasquez-Ajmac said. "Do you have photographs that target your audience? Do the colors resonate? What I've noticed in market research is that Hispanics love bright, vibrant colors."

During last year's World Cup soccer games, for instance, Vasquez-Ajmac identified restaurants and bars whose televisions were tuned to the games; he heavily promoted Comcast in those venues. It was one of Comcast's most lucrative months in new sales, he said.

Kourosh Mehrabian's dental practice has grown five-fold in three years. He started the Maryland Dental Clinic in 2000 in Silver Spring. He has since opened offices in Germantown and plans to open another in Falls Church, Va., early next year.

"In the beginning we tried one television ad [on Spanish-language television], and it was very successful," Mehrabian said. "Once we did that, I realized it was a good decision."

But he maintains that the best advertising is word of mouth.

"Learn the community," he said. "Learn where these people work, how they make their money, what difficulties are in their life." Apparently this has worked for him.

"When you have over 9,000 patients in less than three years, obviously they must have related to you and what you're trying to do," Mehrabian said.

Source: http://www.gazette.net

by Aruna Jain
Staff Writer

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