When Multicultural is the Culture

The 2010 Census confirmed something Nielsen has been noting for some time: multicultural consumers are rapidly becoming the majority in the United States and their buying power is significant. Understanding their purchasing and media habits is the next big challenge/opportunity facing marketers and brands today. Taking a deep dive into data and trends within the African American, Asian American and Hispanic communities, Nielsen’s Claudia Pardo laid out compelling statistics and a demographic framework shaping the future. It’s clear that marketers and brands will be forced to rethink their perspective — and their share of spend — when it comes to multicultural groups.

“Can anyone in the room honestly say they’re doing everything they can to satisfy the consumption needs of this population?” Pardo asked attendees. “The demographic growth of these groups is simply becoming too great to ignore.” The good news, noted Pardo, is that multicultural groups are actually more loyal to brands and there’s an opportunity to win a consumer for life.

In the past multiculturalism was talked about as a melting pot, but it’s really more like a salad bowl where each group stands out and is different in the way they value their culture and traditions. Pardo offered examples of notable distinctions in the way these diverse groups shop and consume media.

Pardo noted that understanding these and other details (such as understanding that multicultural consumers are actually ahead of the curve when it comes to mobile phone adoption, understanding their different TV viewing and online browsing habits, or ensuring that ethnicities are portrayed more often and more appropriately in ads) is key to seizing the massive market opportunity ahead.

“The story here is that within the next five years, multicultural clients will drive 86 percent of the total growth on spending in retail,” Pardo highlighted. “If you look at growth without these groups, you are only addressing 10 percent of the growth.”

Pardo suggested a number of key questions organizations should ask before embarking on an effective multi-cultural strategy:

• What is your share of the multi-cultural market?
• Do you know this consumer better than your peers?
• Are you fishing where the fish are?
• Do you have the depth of consumer insight to ensure you deploy the most effective marketing mix?
• Is your advertising culturally relevant?
• Is your organization ready?
• Are you investing in the right structures and incentives to ensure multi-culturalism remains top of mind?

A panel discussion with Roberto Ruiz of Univision, Idaliz Chacon of Procter & Gamble, Angela Joyner of ConAgra Foods and Bill Imada of IW Group followed the presentation and generated the following guidance for organizations looking to engage in effective multicultural strategies:

1. Create Internal Champions: From creating a Center of Excellence for multicultural marketing, through tracking success via executive scorecards, all panelists agreed that a multi-cultural approach must be a top-down business imperative to avoid a transient, “flavor of the month” approach to engagement.
2. Scale Your Investment: Bill Imada advised participants to “start small, get some wings, build confidence and go from there.” He maintained that many companies do not exploit what they already know and have in their historic “corporate inventory.” He advised participants to find which current product lines make the most sense in multi-cultural markets, to pick just one of the population segments with the biggest opportunity and build as much cultural learning and competency as possible before roll-out to other populations as part of an organic growth strategy. Idaliz Chacon said it was important to understand the “size of the prize” to build product category and right-size the investment. To close share gaps faster, she indicated that companies should “invest to win,” even disproportionately if necessary. This view was shared by Angela Joyner who stated that trying to drive brand penetration into new markets would potentially require substantial investment as part of a five year strategy to build brand presence and advocacy.
3. Don’t over-segment: For an effective segmentation strategy, all panelists agreed that it was more important to look for similarities than differences among the focus population and that over-segmentation would decrease the opportunity. Roberto Ruiz stated that the key to effective segmentation is “actionability” and that the nuance of “bi-culturalism” of individuals, for instance being “dominant Hispanic,” while “fascinating,” was completely “worthless” as a segmentation consideration on the basis that people tend to be entirely immersed in both aspects of their culture.
4. Get out of the Office and Into the Street: “Consumer immersion” was considered the most powerful way to energize a company’s multi-cultural strategy and summarized as “the power of being there and seeing what’s going on.” Leveraging employee ethnic groups within organizations was viewed as a unique asset companies could deploy to generate proprietary insight and delight and win with diverse consumers.