Globalaffairs

Issue 4/August-September 2007
by Virginia Caballero

Conquering the US Hispanic market, in all its different segments and sectors, is the dream of every marketing team in the country.With its high brand loyalty (5 %) and its strong buying power, this distinct group of 4 .5 million people from 22 different countries makes up the fastest growing consumer market in the United States and the obvious target of marketers. The multilingual diversity in this demographic group makes this a complex target. Preference and proficiency in language (some only speak Spanish, others only English while others speak both languages) are among the many issues that contribute to the complexity of this target group. When a company starts to define a media plan and decides which linguistic strategy will be used to grab this target’s attention, the debate begins. Is it better to use English, Spanish, or perhaps “Spanglish”?

“LATIN-USA” Territory The second largest Spanish-speaking economy in the world

“If we were to imagine for a moment that the U.S. Hispanic population was an independent nation, it would be the second largest economy in the Spanish-speaking world”, according to Aida Levitán and Javier Pérez- Palencia, co-founders of the marketing agency in Miami, Levitán & Palencia. This is what Dallas McDonald Marketing defines as a “nation within the US nation.”

It comes as no surprise that the Hispanic population (Hispanic being the term which is preferred by 4% of this demographic group in the United States, compared to 1 % which prefers to be referred to as Latino) has become a target for small, medium and large corporations in the U.S. and for companies abroad that want to promote their brands and products in the “Latin-USA” country. Judging from the latest data on this segment, the coming decades could see the “Latin-USA” territory growing at a very fast pace. Forecasts from the US Census Bureau indicate that the number of people of Hispanic origin will grow by 67 million between 2000 and 2050 (an increase of 1 %), which would double the proportion of Hispanics among the general population from its current level of 12.6% to 24.4% in 2050.

Half way through the century we would witness a Hispanic population of 102.6 million people. Levitán & Palencia add: “the Hispanic population’s buying power is expected to reach $926 billion in 2007, which represents an increase of almost 90% since 2000.”

Marketing in English or Spanish?

One of the major mistakes that both small and large corporations make when they address the Latino market is that they use stereotypes. According to Richard Arregui, President of the Miami-based agency Arregui Advertising Inc., “companies can be mistakenly led into thinking that the consumer can be won over by making an ad that is limited to showing images of a wholesome family with Latin music playing in the background. Other agencies then translate the ad into Spanish and call it Hispanic marketing. These are completely wrong ways of doing marketing”, states Arregui.

A pride in their common Hispanic heritage and a preference to use Spanish at home (90%) are among the factors, which have led people in the past to think that the only way to connect with this market was approaching it in its native, and in many cases only, language: Spanish. Among those who prefer to use Spanish exclusively are young, middle-class, ac- culturated families who consider family, careers and conservative values as very important issues. Agencies know how to highlight these points so that their ads incite a favorable response.

For Levitán & Palencia “by speaking Spanish in the United States, Latinos express the pride they feel for their Hispanic heritage.” “The vast majority consume Spanish-language media. They spend many hours per week watching TV or listening to the radio in Spanish, and they also read Spanishlanguage newspapers, magazines and Internet sites.

In the case of Hispanic households with multiple generations living together, the way in which marketing agencies connect with these different segments varies according to their habits.

For example, when communicating with acculturated first generations (college educated grandparents), English is generally used.

The shared characteristics of this group include a feeling of pride for having achieved a certain level of social status and financial security as well as a strong attachment to family values and their roots of origin.

Recent data released by the market research corporation HispanTelligence, also reveals that “second and third generations tend to prefer communicating in English more and more.” These generations which make up the majority of the bilingual-Hispanic segment, have accepted certain American cultural values while they hold on to their Hispanic heritage at the same time. This leads some agencies to draw up multilingual strategies in American and Hispanic mass media.

Forecasts made by Levitán & Palencia highlight that “the number of bilingual-bicultural and non- acculturated Hispanics in the US will grow by 45% in the next two decades, adding more than 12.5 million to the number of Spanish speaking consumers by 2025.” “Nevertheless, as the number of Hispanics born in the US is expected to grow faster, advertising in English will also increase as well.”

The importance of bilingual marketing

A commitment to bilingual marketing seems to be the most adequate strategy for the future. This was confirmed by Felipe Korzenny, professor and director of the Center for the Study of Hispanic Marketing Communication at Florida State University (FSU). Korzenny believes that most corporations that have invested in marketing in the United States until now have tended to assume that without drawing up a strategy for Hispanics, they could attract attention nonetheless as this segment gradually became more acculturated. By doing so, “they are missing the chance to set up a closer relationship with Hispanic consumers, and therefore the chance that their brand can be more appealing to them.” The general problem with bilingual marketing is the budget that is usually needed to put it into practice. Hispanic media, broadly speaking, is more accessible, “which is why a corporation that wants to cut costs often limits its media plan to Spanish-language media”, adds Richard Arregui.

Although this is not exactly the best solution, the president of Arregui Advertising believes that “the strategy should be adapted to the budget, making the most of the money available, which might mean carrying out promotions in the distribution channel, which can even be more effective than a very limited media plan.”

How can a small business make an impact on the Hispanic market?

Small and medium-sized enterprises generally react very slowly to marketing needs -Mainly, because they lack the necessary resources-. Although, according to Felipe Korzenny, “There is still hope for them because some of them have roots in the community and can connect with the market without having to make a large investment in market research”.

For that purpose, Korzenny recommends “contracting consultants with connections in the community to be able to gain direct access to it and to be proactive in serving the needs of this group, thus obtaining information in quite a natural way.”

At the same time, companies run by Hispanics, don’t necessarily have an edge that give them any decisive advantage in this market.

Many Hispanics make the mistake of thinking that, just because they are Latinos, they can develop communication based on beliefs and preferences which are extrapolated incorrectly to different segments of the macro-group that Hispanics constitute.

For Arregui

To sum up, the changes caused by the language preference in communications aimed at the Hispanic market have led advertisers and advertising agencies to research beyond the stereotypes normally associated with this segment of the population. Communication specialists are more aware of the complex nature of working with this demographic group and they are paying more attention to tailoring the message to make sure that it achieves greater impact. On the other hand, advertising the brand in Spanish is still important to gain Hispanic consumers’ trust, so Spanish will still be essential to reach out to Latinos, particularly those who are non- acculturated or who belong to the bilingual-bicultural segment.

Advertising in Spanish is therefore expected to continue to grow, particularly on the Internet and cable television, which are forecasted to become the top-selling media for 2006.

Similarly, Hispanic audiences will also be addressed by media advertising in English and even by media which defend the use of Spanglish and which, although they are still rare, are starting to become gradually more important.

While it is important for businesses to bear these factors in mind when setting out on the arduous task of conquering “Latin-USA” territory, it is even more important for them to place themselves in the hands of agencies with experience in the market and in the development of strategic marketing plans. This demographic group carriers too much weight for it to be handled by unqualified professionals.

Virginia Caballero
Business Pro Magazine
Spain United States of Chamber of Commerce

Global Affairs is not liable for author’s opinion

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