H-E-B TEST-MARKETING ON HISPANICS PAYS OFF

PAT NATSCHKE LENIUS

CHICAGO -- H-E-B Grocery Co., San Antonio, tracked a 43% increase in movement on a product that was promoted and merchandised to Hispanic customers using information from the chain's new test-marketing service.

The category grew 22% during the two-month test in which H-E-B worked with the product manufacturer to develop Spanish radio commercials, distribute in-store coupons and build point-of-sale displays.

Bob Neslund, senior vice president of marketing at H-E-B, outlined the test results this month during a seminar titled, "Targeting Ethnic Markets at Retail," hosted by The Marketing Institute, a division of the Institute for International Research, New York.

H-E-B's test-marketing service, developed in conjunction with Efficient Market Services, Deerfield, Ill., is designed to assist manufacturers merchandise to the Hispanic market. During the test, EMS collected and sorted daily product movement data from H-E-B point-of-sale scanners and the information was compiled in reports that tracked selling activity on a store-by-store basis. The data can be used to monitor inventory, plan delivery, and evaluate the effects of promotions, pricing and product placement.

Neslund said scan data drawn from its stores, 29 of which are in the Rio Grande Valley and along the Mexican border, proved more valuable than national statistics for marketers targeting Hispanic shoppers.

"We offer a gateway to the growing Hispanic market," he said. "Our market includes 4.2 million people in 100 cities with more than 1 million families."

The test provided a window to observe shopping patterns and preferences of Hispanic customers, he said. Among the key findings were:

· New product package design, coupons and signs bearing the shopper's native language are not necessarily more powerful than a package design that is already familiar and easily recognized.

· Event merchandising in Hispanic markets is most effective when it is family-oriented, features multiple manufacturers and in-store demonstrations and is augmented by live radio broadcasts or fund-raisers.