Download Multicultural Marketing

DOSSIER
Multicultural Marketing
How to court ethnic minority consumers
●
purchasing power
EM spending power estimated
to be £12-£15 billion annually;
highest rates of EM consumers
found in Bristol, Birmingham,
Bradford, London Leicester,
Manchester, Sheffield
●
Growing ethnic diversity is
not just a characteristic of
the UK market. Global
players will note that:
●
size
ethnic minorities (EMs) are the
fastest growing sector of the UK
population - half are under 25
years old compared with only a
third of whites; proportion of
EMs expected to double from
5.5% over next 50 years driven
by higher immigration and
fertility rates; in eg London and
Leicester, EMs already account
for 26% and 22% of residents
respectively; EMs projected to
make up majority in half of
London boroughs and between
40-50% of population in other
urban areas within 15 years
●
●
IT’S A MULTICULTURAL
WORLD
sophistication
EMs likely to be more upwardly
mobile and better educated than
white population; Asians are
fastest growing middle class and
account for half of all new UK
millionaires; Mintel records
high ownership of computers,
TVs and multiple ownership of
cars and houses among EMs
●
influence
ethnic youth are major shapers
of trends and tastes in lucrative
15-24 age group on both sides
of the Atlantic, especially
influential in fashion, music,
entertainment sectors
in Australia: reckoned that
22.7% of population was
born overseas; 16% of
people aged five and over
speak language other than
English at home; home to
people from 160 countries
Disgruntled consumers
The economic clout of EM
consumers may be growing but
so is their disgruntlement with
suppliers. Most fail to:
●
acknowledge ethnic diversity
UK firms rarely use eg EM
models in their TV ads or
marketing literature, although
some have major markets
in multicultural communities;
even second and third
generation EM consumers
register desire to have their
people and culture reflected in
marketing messages
●
●
in the US: recently
released figures from the
2000 Census reveals
explosive increase in
black, Hispanic and Asian
population - now account
for 79 million of 281
million Americans;
spending power
estimated at $1 trillion
provide a quality service
eg in Forum for Private Business
survey, non-white business
owners said they paid higher
interest rates and had a less
participatory relationship with
their banks than white owners;
few had EM bank managers
deliver relevant products
not all EM needs and wants are
same as for white population;
eg Gillette was able to launch
highly successful haircare range
for African American women
after it identified the different
product requirements; Marks &
Spencer now offers special
ranges of ethnic foods sold to
coincide with religious festivals
such as Diwali and Chinese,
Jewish New Years after trials in
stores in EM communities
revealed substantial demand
Reluctance reigns
The EM market may be
lucrative but it’s one many firms
are reluctant to target, worried
they may:
●
promote division
by treating white and EM
consumers differently the
fear is firms will promote
division not inclusion; yet
brands that reach out to ethnic
groups and recognise their
existence and buying power
find that EMs feel more
included not less
●
stereotype and cause offence
by using images which offend
consumers’ sensibilities; eg Reed
Employment recently criticised
for ad in which a black man
appeared to rob a white
pedestrian, only to reveal he had
actually placed a job vacancy in
the pedestrian’s pocket
●
fuel cynicism and alienation
a likely outcome if EM
consumers think a firm or
brand is only interested in them
for their spending power; eg
EM vendors and consumers in
US recently boycotted Coca
Cola and Home Depot after
both firms accused of bias
against EM employees
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© BULLETPOINT – OCTOBER 2001
It’s estimated that nearly 30%
of companies make no attempt
to target their goods and
services at ethnic minority
consumers, and of those that
do, only a fifth reckon their
marketing strategies are
effective. Yet this is a market
which is growing in:
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DOSSIER
Success stories
Target marketing
A few UK firms and many more
in the US have had considerable
success with efforts to woo EM
consumers. What they have in
common is that they:
And on a more operational level
successful marketers to EM
communities:
AN ADVERTISING TALE
●
understand the goal
multicultural marketing requires
firms to approach consumers
through their complex cultural
affinities; means building an
understanding of what matters
to EM consumers; aim is not to
be seen as interloper trying to
make money, but as ‘kindred
spirit who knows their hearts
and is really one of them’
●
segment by ethnicity
biggest mistake is to view EMs
as one homogenous sub-culture
and adopt ‘one size fits all’
approach; EM consumers may
differ in
O
levels of acculturation: ie
extent to which they have
adopted values/buying
habits of dominant culture
O
O
frame of reference: eg
Lloyds TSB no longer
routinely asks for passports
when people open accounts
- because some EMs
thought right to live in UK
was being questioned
tastes and preferences:
even fairly narrow ethnic
groups can have very
different tastes, eg coffee
company, Bustelo, decided
to develop special TV ads
targeted specifically at
Mexicans and Central
Americans, when it found
that, compared with other
Hispanics, they preferred
instant coffee to espresso
develop dedicated marketing
programmes
do the market research
to supplement the very scanty
data publicly available on the
composition and buying habits
of EM population; eg one
FMCG company targeted ‘older
Asian women’ for product
research; Charles Schwab
collects data from its website found for example that income
of Chinese American households
is 50% higher than average
Anglo Americans and they trade
two to three times as much; has
since made its Chinese language
site even more attractive to this
ethnic group by focusing more
on educational issues
●
fill product/service gaps
eg when Littlewoods sold
specially designed Diwali gifts,
sales rose by 24% in the 22
stores that ran the promotion;
Boots has won over Muslim
customers with launch of Halaal
range of organic baby food;
HSBC increased its share of
South Asian business market
from 8% to 20% by launching
a tailormade service staffed in
part by local people; Sears’ most
profitable stores are in
neighbourhoods that carry
clothing and cosmetics specially
designed for Hispanics
DIFFERENT OR SAME?
Does EM marketing always
have to be so targeted?
Finding a ‘zone of
commonality’ that
transcends cultural
differences may work with
some products, eg
Hallmark’s successful card
range, depicting shared
truths from world cultures,
has proved popular across
ethnic groups, appealing to
people who appreciate
cultural diversity.
© BULLETPOINT – OCTOBER 2001
●
●
When Quip, a provider
of low cost international
calls, recently decided to
abandon mainstream
advertising already
dominated by heavy
advertisers such as One-Tel,
it launched three separate
advertising campaigns
targeting Indian, Pakistani
and Sri Lankan consumers,
using Asian digital TV
channels, radio and press.
eg Sears, Nabisco and AT&T
run marketing programmes
targeting up to ten EM groups;
Coors and Revlon have
developed products and
marketing aimed specifically at
needs of EM consumers
8
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The new strategy resulted
in attracting the same
number of new customers
in the first six monthss of
2001 as it had in all of 2000
- and at half the cost; firm is
now targeting Chinese and
Irish communities.
●
use EM-targeted media
because many EMs do not
watch/listen to mainstream
media - 65% of black people
say that mainstream media has
no relevance to them
●
redesign advertising or
marketing materials
which means translating
ideas, visuals, symbols as well
as text and words into target
language to avoid costly goofs;
eg major telecom firm was
forced to pull ad featuring
peanuts from Japan when it
found peanuts symbolise bribes
in that culture
DOSSIER
MULTICULTURAL MARKETING
Marketing to ethnic minority communities requires a new approach to everything from market research to
advertising. Here are some of the major questions you need to answer to get started.
ACTION CHECKLIST
UNDERSTANDING THE MARKETPLACE
the location and buying habits of potential ethnic minority customers: need to know where EM
customers live, what they buy now and what they’d like to buy in future
their culture, language and religion: all play a major part in shaping consumer behaviour, eg Islam forbids
Muslims to lend money for interest thereby discouraging Muslims from setting up eg savings accounts,
certificates of deposit
their acculturation: will help you determine whether marketing programme should be run mainly on ethnic
lines; remember that even though first generation immigrants are most likely to be least assimilated and most
receptive to an ethnic marketing programme, most ethnic minority customers, including the young and hip,
appreciate marketing which acknowledges their culture
Data sources:
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census and official statistics in public domain: be warned that current data is generally scanty; look out
for upcoming data from recent census - promises to provide most comprehensive info on EMs yet
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growing body of specialist marketing research: eg Mintel Ethnic Lifestyles Report
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business networks: eg Race for Opportunity campaign, to get access to targeted research and find out
what more experienced marketers to ethnic communities have learnt
voluntary, youth and community organisations: working with these in EM areas to build knowledge
new website: to track EM’s purchasing habits
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NEEDS ASSESSMENT
targeted products and services will appeal to specific ethnic groups: if each ethnic group is considered
individually their similarities and differences can be identified; recruit ethnic minorities into marketing and
product development teams; ask EM staff to suggest potential gaps in products and services
must be able to speak directly to them: at customer service centre level, especially those in predominantly
EM communities, and marketing materials must be offered in languages other than English; are all posters
and public signs in English? are there any EM staff to talk to potential customers?
ADVERTISING
use the right media: consider using specialist EM-community based media including newspapers, eg The
Voice, New Nation, Caribbean Times, Asian Times, Asian Age, and radio and digital TV channels, eg Prime
and Zee TV
convey the right messages: remember to include ethnic minorities in all brand and company advertising,
including eg recruitment advertising; ask for marketing material which has been translated for an ethnic
group to be back-translated so you know intended message is getting across
seek out specialist advisers: specialist multicultural and ethnic marketing agencies not as common in UK as
in US but sector is growing; check out specialist EM press and networks for leads - one of best ways to ensure
advertising is free from stereotyping and bias
A WIDER APPROACH
take positive action to recruit EMs: consider advertising jobs in specialist media, offering work experience,
summer placements etc to youth in EM communities and to EM graduates; taking a company stand at major
EM community events or concerts, working with community leaders to understand attitudes, eg one bank
has been trying to change attitudes to finance careers in the Asian community after it discovered that young
Asians were being steered away from banking by their elders and towards the professions
retention and progress of EMs monitored? do all managers, from the top down, undergo diversity awareness
training? are EMs included in coaching and mentoring schemes?
develop the EM supply chain: EM businesses are generally small but you can help them grow by eg
positively seeking out and encouraging small EM suppliers to bid for work, asking major contractors to
demonstrate a commitment to diversity standards and to sub-contract work to small EM firms, providing
practical help, eg offering them disused computers, and general business advice
put something positive back into EM communities: think about eg, sponsoring ethnic community events,
supporting exhibitions and celebrations of ethnic culture, backing projects for ethnic youth
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© BULLETPOINT – OCTOBER 2001
take positive action to retain EMs: are religious practices and different cultural dress codes respected? is the
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DOSSIER
Community links
WHY IT’S ABOUT MORE THAN MARKETING
One of the reasons EM
marketing programmes fail is
they are too narrow in focus. A
more holistic approach is
needed. Building community
links is of prime importance,
enabling firms to:
●
A small campaign - a few thousand postcards distributed in bars,
clubs, designed to link the new car with street fashion - recently
dropped Toyota into hot water; within weeks of launch, a
campaign featuring a black man’s smiling mouth with a
fashionable jewel in his tooth in the shape of RAV4 resulted in a
deluge of bad publicity and:
focus groups with women in
some Asian communities, for
example, would be impossible
without community leaders’
support and blessing
●
combat cynicism
by putting something positive
into ethnic communities, eg
Coca Cola is duplicating New
York initiative by backing
school cricket league and
donating equipment to Asian
youth in Birmingham;
McDonald’s sponsored US
TV show which honoured
Hispanic entertainers
Influencing supply
The best companies also seek to
influence and develop the ethnic
minority supply chain by:
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encouraging EM businesses
because they are often best
placed to develop the products
and services EMs desire; eg one
firm provided health and safety
advice and donated redundant
equipment to EM food supplier
© BULLETPOINT – OCTOBER 2001
●
10
hundreds of protesters, led by Rev Jesse Jackson, marching on
Toyota’s California offices decrying images as stereotypical
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demands to sack ad creators, Saatchi’s, and appoint African
American ad agency
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wide-ranging review of Toyota’s diversity record and calls to
increase number of minorities on boards, owning dealerships
or else face a boycott
meet EM consumers
eg Mott’s built up Hispanic
following for its drinks by
finding out from community
where most Latin American
bands were playing and beefing
up marketing in those areas
●
●
get cooperation for research
setting diversity standards
for main contractors
eg Littlewoods recently changed
its procurement procedures to
enable small ethnic minority
suppliers to get a slice of major
contracts; now asks main
suppliers to sub-contract to EM
firms; checks for evidence that
this policy is implemented
It’s about people
●
But it’s in the area of people
policies that some of greatest
potential for improvement lies.
A firm’s appeal to EM
consumers can be improved by:
so managers and staff
understand value of ethnic
diversity to cultural life and
business performance of
organisation; awareness training
also needed for senior decisionmakers too, who ignore or
underestimate challenge of
ethnic marketing
●
recruiting more EM staff
especially into sales, marketing
and customer service teams eg
Lloyds TSB increased sales of
financial products by at least
30% in six months when it
recruited more EMs to work
in its East London branch;
BBC sets targets for EM
recruitment; Coca Cola ties pay
to diversity goals eg raising no.
of EM managers
providing diversity
awareness training
Learning how to market to
ethnic minorities isn’t simple without a solid grasp of wider
diversity issues it’s very easy to
offend. But it’s a skill firms will
need to master in a segmented
and multicultural marketplace.
●●●
REFERENCES AND FURTHER READING
Creative Business Survey Financial Times 17 July, 7 August 2001
Ethnic Consumer Reaction to Targeted Marketing J Holland & J Gentry
Journal of Advertising Spring 1999
Market Acculturation:The Changer and the Changed L Penalosa &
M Gilly Journal of Marketing July 1999
Marketing Brief 2001 Race for Opportunity
Media Matters Anonymous Adweek 26 February 2001
The New Age of Ethnic Marketing M Halter Brandweek 19 March 2001
Social Dimensions of Consumer Distinctiveness S Grier &
R Deshpande Journal of Marketing Research May 2001
Think Ethnic Act Ethnic J Curtis Marketing 5 July 2001
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See also:
• Corporate Reputation • Cross-border Mktg
• Customer Segmentation • Ethnic Marketing
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