MARKETING TO HISPANICS A NUANCED CHALLENGE IN U.S.

Dan Alaimo

It seems so simple. A new immigrant group comes to prominence in this country, so adjust the product mix to appeal to them in the geographic areas where it is warranted.

When it comes to Hispanics, it's not that easy, but it is imperative that retailers figure out how to market to this group. As Roy White, vice president of education of GMDC's Educational Foundation, said, it's a matter of survival -- "It's just that important."

Last weekend, GMDC released its comprehensive study on "Multicultural Marketing," which focuses on using nonfood products to effectively reach out to Hispanics.

Hispanics are becoming an unprecedented force in U.S. demographics. As of 2004, they numbered 41.3 million, or 14% of the population, according to the U.S. Census Bureau. Because this is an official government statistic, it does not include undocumented Hispanics, a "shadow" population that may be as many as 7.5 million people. By 2050, the Census Bureau projects that Hispanics will grow to 24.4% of the population.

Citing statistics from the Selig Center for Economic Growth at the University of Georgia in Athens, GMDC reported that Hispanic buying power will increase 44.6% from 2004 to 2009, from $686 billion to $992 billion. Consider that this group outspends others at the supermarket, and that they now live in most parts of the country, and the necessity for understanding their preferences becomes clear.

Besides its size, there are several challenges that make Hispanics as a group difficult to pin down.

For one, there are different nationalities. They are dissimilar in many ways, but have language and a love of family in common. Based on tabulations from the 2000 Census, the Pew Hispanic Center reported that 63% of the U.S. Latino population was Mexican; 10% were from Puerto Rico; and the remainder was from other Spanish-speaking countries in the Caribbean, Central America and South America, including Cuba, El Salvador and the Dominican Republic.

Appealing to first-generation immigrants is relatively straightforward: Understand how to bring them the products they want and the shopping experiences they are comfortable with. More problematic for marketers are second- and third-generation Hispanics.

One retailer pointed out that many third-generation customers are interested in the same products as their Anglo neighbors. However, as Simon El Hage Lisha of the Houston advertising firm Lopez Negrete pointed out, they occasionally and somewhat unpredictably want to experience their heritage.

These later generations are fast becoming acculturated, but want to hold onto who they are and where their parents came from. Retailers need to be able to respond to that, as well.

That brings up yet another challenge. Non-Hispanic Americans are sampling and adopting the foods and accouterments of Hispanic cultures, creating one more reason why retailers need to understand this market. There are obvious examples, like salsa, and less obvious ones, like the wraps, which are based on the simple tortilla. Other items, like food preparation items, also could see widespread acceptance.

Ultimately, it all comes down to a basic retailing skill. As Larry Ishii of Unified Western Grocers put it: "Understand who the consumer is, their culture, their lifestyle, their needs, and then the sales opportunities."