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FALL 2011

CONSUMER

SPOTLIGHT

SPOTLIGHT ON: HISPANICS

FOCUSING ON USING LIVE EVENTS TO CONNECT WITH DIFFERENT DEMOGRAPHICS

THE CENSUS CHANGES EVERYTHING Hispanics become the highest growth consumer segment The Hispanic population now numbers 50 million, making Hispanics the largest minority population in the country.  The population rose by 15 million in the last 10 years, representing a growth rate of 43 percent. Hispanic youths now account for nearly 25% of the country’s population under the age of 17. Buckle up. Hispanic purchasing power in the United States is expected to reach more than $1 trillion by this year. In fact, the U.S. Hispanic market is bigger than entire countries’ gross domestic products! It’s a major spending channel and smart marketers are paying close attention to this growing segment of the country, which in the last 10 years has risen from 35.3 million to 50.5 million (out of a total of 308.7 million), according to the 2010 Census report. More than half of the growth in the total U.S. population has been due to the increase in the Hispanic population, while non-Hispanics grew only by about five percent during the last decade. With such impressive numbers, it’s no wonder that at this year’s annual Nielsen Conference in June, Nielsen CEO David Calhoun encouraged attendees to spend 65 percent of their time “figuring out their Hispanic opportunity” because it was no doubt the single biggest source of growth for all companies in the U.S. in the short and long term.

HISPANIC CONSUMER SHARE OF POPULATION

How can marketers increase their piece of the pie in this market? Meaningful engagements can be key to reaching this demographic, which according to market research company Mintel’s recent report is brand loyal, especially among Spanish-dominant Hispanics even during a down economy. Sixty-four percent of Spanish-dominant Hispanics surveyed said they buy the same personal brand-name products regardless of their income level, and 58 percent of Englishdominant Hispanics said they do, too. To connect successfully with Hispanics across the board marketers need to be sensitive to cultural differences and make a long-term commitment to supporting the events that matter most to this group. “We have watched many companies look at this market and fall extremely short when they don’t fully commit,” says Stan Phillips, president at Laguna Beach, CA-based Specialized Promotions Network (SPN), which has been connecting with this demographic since the ’80s with a dedicated Hispanic Promotions Division. “Most people say that if they hit this market then they’ll get this increase out of it because it’s a big market. But the size of the market has nothing to do with it. It’s the building of the brand within the market over a period of time.” How else to engage the Hispanic market? Here are five tips to get you started: 1. Commit: If you’re hesitant to spend the dollars, start out in a single market such as Los Angeles, Phoenix, Tucson, Houston or Miami, or choose a secondary market such as Atlanta, Chicago or Charlotte. Once you saturate the events in that market and blanket the neighborhoods, evaluate the progress, apply key learnings and expand markets with confidence. 2. C  onnect: Make the event experience relevant to the whole family. For example, adjust your give-aways to include items for both children and older family members while integrating social media platforms for young adults. 3. C  elebrate: Play a role in cultural events. Integrate and honor the language and Hispanic traditions in your messaging, creative and staff presence. 4. M  aximize: Some of the largest events in the U.S. are Hispanic Festivals. Whether you’re reaching 500 or 500,000 people, adjust your experience to maximize the reach and exposure. Adapt your footprint, add visuals, engage consumers while they’re in line and create an organized flow of traffic. 5. S ecure Retailers: Confirm distribution with the independent stores in the Hispanic neighborhoods. Sometimes companies go in and think only of supplying the big chain stores like Target, but then locals go out in search of the product in their neighborhood stores and can’t find it. Ignoring the local retailers will only set you up to fail in this market.

TO LEARN MORE ABOUT CONNECTING TO HISPANICS, HEAD TO SPNSAMPLING.COM OR EMAIL SUSIE@SPNSAMPLING.COM

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ALL IN THE FAMILIA Family-centric events are an integral part of a Hispanic marketing strategy One of the most important factors to keep in mind when marketing to the Hispanic community is that their lives generally revolve around the family. Renata Franco, marketing segmentation manager at Cox Communications says, “Cox understands that we Hispanics are much more community centered. Events do really well for us.” When creating a meaningful experience to reach this audience, having a family-centric focus can make all the difference in how this demographic connects with your brand. “One of the strengths of a campaign that focuses around family events is that it allows a brand to be part of a passionate experience while attendees are in the moment and enjoying life with their families,” says Susie Sutherland, director of operations at SPN. At the core of Hispanic family enjoyment is generally food and music. At home food remains one of the most prominent categories where Hispanics spend relatively more than non-Hispanics. They spend 9 percent of their household

budgets on buying food to prepare at home compared to 7.5 percent spent by non-Hispanic households (marketresearch.com). The Hispanic heritage involves preparing elaborate meals that large families can enjoy together. As younger generation Hispanics acculturate, cooking becomes less central, but overall it still remains an integral part of Hispanic family life. When SPN was tasked with creating awareness and trial for J.M. Smuckers' La Pina flour, authentic cooking was at the heart of the campaign. The team hired “Tortilla Ladies,” women who prepare handmade tortillas daily for their families. In markets across the country, the ladies made traditional homemade tortillas using the product just like they do for their families. Putting the cooking into the hands of true Hispanic mothers certified that the food looked and tasted authentic and the connection made with the consumers was more meaningful. Music is another passion point for this demographic. The rise of shows like the Billboard Latin Music Awards is a testament to the popularity of music within this growing demographic. This year’s Telemundo broadcast of the Billboard Latin Music Awards presented by State Farm registered a record-breaking 6.6 million viewers (Nielsen Media). In addition to cooking and music, Hispanics are passionate about other family occasions, such as their daughters’ 15th birthdays or Quinceaneras. Others include cultural festivals, soccer games and church life, which allow marketers to access families in their most authentic settings. Once a brand is on the inside, it’s important that it take the right steps to creating the most authentic message possible to engage the family from the youngest to the eldest. Here are four tips that can help guarantee your brand delivers an authentic family-centric experience: 1. Bilingual teams are a must. Even better, hire local Hispanic brand ambassadors, who not only speak the language but also live and understand the lifestyle. Make sure that all literature that is passed out is available in both English and Spanish. Spanish copy should be written by Spanish speakers and not translated straight from English. 2. Despite whether the product is targeting parents, children or grandparents, think about how to incorporate the rest of the family into that experience. If it’s for the parents, then what can you provide for the kids, such as stickers or toys, or create costume characters that lure them in for photo ops. 3. Unless the product primarily targets Hispanic young adults, don’t focus on social media integration. Rather than engaging families with a text-to-win prompt as they wait in line, turn to sampling instead (or do both). Have extra staff on hand to walk the usually long lines at these events to sample product while they wait to participate in your experience. 4. It’s critical for brand ambassadors to be patient when Hispanic attendees wait in line for an hour to play a game or receive a sample. Keep the engagement direct and real, and don’t rush the consumer. Remember to let every member of the family enjoy the experience.

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TO LEARN MORE ABOUT CONNECTING TO HISPANICS, HEAD TO SPNSAMPLING.COM OR EMAIL SUSIE@SPNSAMPLING.COM


GRASSROOTS CONNECTIONS Tap into the Hispanic Market with Festivals and Cultural Events

Though the U.S. Hispanic population’s purchasing power has been growing more than twice as fast as the total U.S. purchasing power over the past 10 years, discretionary dollars can still be scarce especially when families are large. This makes free festivals and cultural events a popular form of entertainment. At these events there is usually something for the whole family, like cartoon characters performing on stage or local radio stations sponsoring bands and djs that lure in a large crowd for not just an hour or two, but the entire day. Marketers that want to tap into this community should consider how they also could add value to these events. Univision, local radio stations, and retailers all tie-into events and festivals either as sponsors or event management. As marketers are selecting which events to target, they can leverage media already in-place or support their experiential marketing by adding radio or in-store efforts leading up to the event. It is common for media agencies to offer packages that include radio spots, in-store displays and print advertising; however, it is important for marketers to make sure that brands are paying only for what they need and not for what they don’t. When the footprint goes up, brands need to make sure they distinguish themselves from other experiences on the ground to break through the clutter and immediately make a connection with the consumer. They can add simple touches, like including luminaries or piñatas to events during Las Posadas or sarapes and mariachis at Fiestas Patrias. Whether it’s incorporating the Mexican flag colors in the graphics or erecting a phone booth for free calls to Latin America, the right visuals and activities are critical to connecting at heritage-

related events, because it shows that your brand understands what the celebration is all about. Just as with general marketing where one size doesn’t fit all, marketers need to recognize the differences in Hispanic culture and not see the market as homogenous. They need to have the capability to personalize the messaging and creative depending on which cultural group they’re marketing to based on the country of origin and acculturation levels. What works for first-generation Mexicans doesn’t necessarily work for third-generation Puerto Ricans and so on. “Unless you’re very specific to the culture you really get dismissed because they say, ‘this isn’t for me,’ and they walk on by. But if you create a footprint that radiates a connection and you have local Hispanic brand ambassadors with a product relevant to the target demographic, and a giveaway or activity for family members then you look like you’re part of the community,” says Phillips. When brands make a commitment to this market, Hispanic brand ambassadors in turn make a commitment to the brand. Family members of brand ambassadors often help with the preparation and organization of sampling execution. At SPN, there are couples that have been part of the Hispanic Marketing Division for 18 years, and their children grew up assisting their parents with keeping premiums organized or breaking down boxes. Now they’re leading teams of brand ambassadors that may someday include their children. However, sampling is the ultimate at these events. No matter how fun the experience is, if you don’t have a relevant give-away for families that have been waiting in line for hours you can forget about making a connection.

TO LEARN MORE ABOUT CONNECTING TO HISPANICS, HEAD TO SPNSAMPLING.COM OR EMAIL SUSIE@SPNSAMPLING.COM

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TAKING IT PERSONALLY Make personal connections with Hispanics at smaller events and at a grassroots level Though large festivals and cultural events are certainly a gateway into Hispanic lives, a deeper connection can be made by engaging on an even more personal level by activating at multiple smaller events and at the grassroots level. “Calle Ocho (Miami) and The Puerto Rican Day Parade (New York City) are so big that sometimes we find they’re too immense, since there are a limit to the number of people you can reach in a day regardless of the number of present. We may target three smaller venues instead so that we can really be a bigger fish in a smaller pond,” says Phillips. “Our approach is to try and create a bigger presence without spending huge sponsorship dollars. We’ll go to Fiestas Patrias in L.A. where there aren’t 500,000 to a million people but there are still 80,000 to 100,000.” One strategy is to select smaller events with 1,500 to 15,000 attendees and then while in market look for additional opportunities, such as summer events in the parks, radio remotes, retail openings, soccer games or church events. What’s important to keep in mind is that your brand should be adding value to an event and not intruding on people’s lives. SPN, for example, recommends connecting with the Cuban community in Miami’s Little Havana by using local brand advocates that can access the regulars in Domino Park and the neighborhood. A good place to start is with the organization that oversees festivities in the area. Once events such as the Viernes Culturales Friday night Domino competitions and salsa dancing have been determined, brands need to show the event management how their product can enhance the evening for the attendees. When the brand is allowed to participate in the festivities, local brand advocates are created and assist brand ambassadors in accessing the community through more intimate events such as non-sponsored domino tournaments and dances. Naturally having established relationships on the ground is the ideal, but if you’re just starting out in these markets, Sutherland says, it’s wise to start by consulting with local organizations, which tend to have knowledgeable staff entrenched in the community that can guide you to the right contacts. Teaming up with local retailers is also a good idea, Sutherland adds, “We drive up in our branded vehicle and bring our costume characters and give out coupons and premiums to reinforce branding to the consumers and encourage them with coupons to seek out the product in the store. We’ll generally hit six or eight stores a day.” Another great way to get in front of these consumers is to take your branded vehicles and costume characters and participate in local parades to show your support for their beloved event. Brands can also get the community involved in decision making says SPN citing the recent LA-based Univision on-air contest for local artists to design the graphics that wrap one of their client’s campaign vehicles.

CASE STUDY

SPN’s long-term commitment continues to pay off for Mahatma Rice If your Hispanic marketing strategy consists of one-offs, don’t bother. A long-term commitment is key to connecting with Hispanics. Laguna Beach, CA-based Specialized Promotions Network, which has been marketing to Hispanics since 1982, has experienced this first-hand while helping clients like Mahatma Rice reap the benefits of a nearly 20-year commitment to Hispanic marketing. SPN started running Mahatma’s footprint at events in Southern California in ’82. As Hispanics dispersed to central and northern parts of the state, so did the brand. When they set up for the first time at an event in San Francisco, SPN realized just how loyal the Hispanic consumer really was to the Mahatma Rice brand. “We were still setting up the booth and people started lining up in front of it,” recalls Phillips. “By the time the event started there were about 100 people in line. These people had moved up the coast and carried this whole experience with them so that when they saw the familiar booth they got in line. That’s really the success of doing a program like this in the Hispanic market over several years.” Young and old alike in the Hispanic community recognize Mahatma’s iconic genie. SPN plays that up with genie inflatables or has a staff person dress up in a Disney-custom designed outfit. The experience offers up wheel games with sample bags of rice for prizes—the ultimate being a 20-pound bag. It also takes its Mahatma Rice-branded convertible around for sampling and uses it to participate in local parades. At selected events, they even cook up authentic rice dishes. The results speak for themselves. For every three bags of rice purchased in Southern California, two are Mahatma. Similar results are springing up in Hispanic markets nationwide. “Even the highly acculturated Hispanics stay true to their traditions,” says Mahatma Senior Business Manager Alfredo Gomez. “SPN’s sampling and couponing continue to pave the way for Mahatma’s success.” Next up on the menu, brown rice.

If you’re marketing a healthy food product, for example, explore health-related fairs, such as Feria de Salud, which provides free diabetes screenings and resources for Hispanics. “We participate in a lot of diabetes expos and health fairs that bring in 95 percent Hispanics, and you wouldn’t normally even think of this type of venue as a Hispanic event because it’s focusing on diabetes. But when you do your homework, you become aware of these types of events,” Sutherland says. Another valuable source is your team of Hispanic brand ambassadors that are tuned into what’s going on in the community. They can provide insight into where the locals are spending their time, what local music is most popular as well as provide you real-time feedback on happenings in their neighborhoods. Consider your staff as subject matter experts in these markets.

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TO LEARN MORE ABOUT CONNECTING TO HISPANICS, HEAD TO SPNSAMPLING.COM OR EMAIL SUSIE@SPNSAMPLING.COM


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