HISPANIC MARKET OVERVIEW

December 22, 2010
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Half the battle of selling a product is knowing your customer. What is their background? Where do they live? What do they enjoy? When marketing to the Hispanic-American market, one also must take into account the different subcultures that are a part of the demographic. 

“Hispanics shouldn’t be considered one homogeneous group,” says Felipe Korzenny, founder and director, Florida State University Center for Hispanic Marketing Communication.

The diversity of the Hispanic-American experience can mean marketing pitfalls if you’re not careful, agrees Hernan Tagliani, president, CEO of The Group Advertising based in Orlando, Fla. “One of the biggest mistakes marketers and advertisers make when promoting to the Hispanic community is doing a literal Spanish translation of an Anglo campaign,” says Tagliani. 

“They don’t realize that there are variances in languages among the Hispanic community and certain words could be considered insulting to some groups in the wrong context.”  

If you want a campaign to succeed, he explains, you must make sure it is culturally relevant to the demographic you are trying to reach. 

Defining The Culture

The U.S. Hispanic population is divided into subcultures from more than 20 countries based in Central and South America, Spain and the Caribbean. At 65 percent, Mexicans make up the majority of the population, followed by Puerto Ricans at 8 percent, according to a 2009 survey by the Pew Hispanic Center, based in Washington, D.C. 

Like the baby boomers, the Mexican population has the numbers to control major trends in U.S. Hispanic consumerism. That is not to say that other groups don’t have buying power, however. (See the chart, page tk). 
Each Hispanic subculture has its own unique values and differences. Knowing and embracing these differences can spell the difference between private label products that succeed in your particular Hispanic market and those that drop by the wayside. Some key distinctions, as discovered in the Pew survey: 

Mexican: A majority speak English. Although they make up the majority of the Hispanic population, they are clustered mainly in two states; 37.6 percent live in California and 25 percent live in Texas.

Puerto Rican: More than half do not speak English proficiently. 55.6 percent of the subculture is based in Northeastern States.

Cuban: 56.7 percent speak English proficiently. This also is the most geographically centralized of the Hispanic subcultures with 68.7 percent of the population based in Florida.

Salvadorian: Less than half speak English proficiently. Most are in California and Texas. 

Dominican: A majority speak English proficiently. 79.4 percent of the population is based in the Northeast. 

Guatemalan: Four-in-ten speak English proficiently. 40 percent of the population is based in California.
Colombian: A majority speak English proficiently. The highest concentrations of Colombians live in Florida, New York and New Jersey. 

Honduran: Four-in-ten speak English proficiently. 54.9 percent live in Florida or Texas. 

Ecuadorian: Less than half speak English proficiently. Two-thirds of Ecuadorians live in the Northeast, 42.9 percent live in New York.  

Peruvian: More than half of those polled speak English proficiently. More geographically dispersed than other subcultures: 19.8 percent live in Florida, 16.8 percent in California and 12.9 percent live in New York and New Jersey.

Growing in Numbers

“It is crucial for a marketer to reach out to the whole community,” says Tagliani. “When Hispanics go out they do not see themselves as an individual they see themselves as a family and community.” 

Family plays a large role in the lives of Hispanics. Although family is fundamental to every culture, Hispanics tend to have much larger households leading to tighter familial bonds. 

A 2006 study by Ameredia, a San Francisco based multicultural marketing firm, states that with a birth rate of 3.51 percent a year, 25 percent of all Hispanic women have families with three or more children. 

This has created a tremendous increase in the Hispanic population with reports forecasting the Hispanic population in the United States to be anywhere from 24.4 to 29 percent by 2050, reaching 50 million people, according to studies done by the Pew Hispanic Center and the U.S. Census Bureau respectively. 

Lost in Translation

Finding the right words to woo a customer can be tricky. Making sure that marketers identify with a large variety of cultures is even trickier. 

When it comes to the language that is most comfortable at home, 39 percent of Hispanic-Americans speak only Spanish, 17 percent speak both Spanish and English equally and 13 percent speak only English, according to a 2006 poll done by the Pew Hispanic Center. 

These numbers are influenced by many factors including time spent away from their countries of origin. 

Acculturation, or the adoption of the behavior patterns of a certain culture, plays a large part in how marketers must approach the Hispanic demographic, explains Korzenny. (For a more in-depth look at acculturation, see table, page tk.)

Different Tastes 

“Marketing is largely dependent on geographic location,” states Korzenny. Although most of the Hispanic-American population is Mexican there are certain parts of the country where the minority subcultures are more predominant. 

In Florida, for instance, there is a centralization of Cubans. In that market, promoting exclusively to Mexicans would not make sense. The same reasoning applies to other states that attract the less predominant subcultures, explains Korzenny.  

Given their various countries of origin, and even coming from different regions of the same country, the U.S. Hispanic consumer market exhibits a diversity of likes.  

These are rooted in fresh foods and ingredients indigenous to their countries of origin.  This applies to produce, meat cuts, breads, grains, legumes and even packaged goods brands marketed throughout Latin America, says Leon Potasinki, director, strategic planning and research at Acento, a Hispanic public relations agency in Chicago. .

“Like everyone else they [Hispanics] shop for non-ethnic based foods. Many times they will go to specialty stores because the Hispanic shopping experience is not as well done in the larger stores,” explains Korzenny.

 When Mexicans barbeque, for example, says Korzenny, they search for a special cut of meat that is very, very thin and used in many dishes. Since not all stores carry that item, Mexicans must go to the smaller, more ethnically based shops to find it. 

 “The area of food is where you will find the biggest differences among Hispanics,” says Korzenny. Certain foods, like plantains and chilies, appeal to some subcultures more than others (for a list of examples see table, page tk). 

Don’t just consider country of origin when marketing to Hispanics, however, warns one expert. “From a retail grocery standpoint, we tend to look at Hispanic consumers from a regional and local market basis,” says Potasinki

 “That is to say, not whether they are of Mexican, Puerto Rican, Cuban, South American, etc. descent but from an actual shopping habits and product preference stance.” 

Many big name retailers like Walmart and Food4Less have tried to capitalize on the growing Hispanic marketplace. Not all have done so properly. 

“Walmart has surprised me by having a Hispanic aisle and a Latino aisle,” says Korzenny “These are some of the silly things people do when they don’t know what is going on. 

Someone in their marketing department was uniformed and told them that was a good idea.” (To read about retailers who are doing an effective job reaching Hispanics with private label products, see story, 
page tk)

The rise in the Hispanic population through the United States has altered the landscape of the private label marketing and advertising world.

 “Things are changing, companies are now open and willing to cater to the Hispanic market,” says Tagliani “they are ready to make products for the smaller groups.” 
 






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