Download Reaching the Australian Ethnic Consumers: Some Food for Thought

Reaching the Australian Ethnic Consumers: Some Food for
Thought
Syeda Nusrat Afza and Mohammed A Razzaque
Abstract
The fast growing Australian ethnic markets have tremendous potential for
the marketers. But successfully reaching the ethnic consumers seems to
pose a great challenge to them because of their lack of understanding
about different ethnic consumers. This is particularly true for major
Australian supermarkets. This paper discusses some of the major issues
in this context and provides some food for thought for Australian
marketers.
Introduction
Changing socio-demographic characteristics of the Australian population in the new
millennium has substantially changed the mosaic of Australian market. Consequently, it
has become an important issue for contemporary Australian marketers which need to be
addressed so that consumer needs can be easily anticipated and efficiently satisfied.
The last two decades have witnessed the steady transformation of a predominantly
White Australia into a more ethnically diverse multicultural society. Because of changes
in government’s immigration policy the pace of this transformation varied from time to
time, but the process did never stop; it still continues and is likely to continue in the
future as well. Consequently, the ethnic market is bound to flourish by growing further
both in terms of numbers and level of financial affluence. It would not be an
exaggeration to say that marketers cannot afford to ignore this market.
The rapid increase in the commercial potentials of this market makes it imperative for
Australian marketers to gain a clear understanding of this market. They must understand
that a one-size-fits-all mentality is a matter of the bygone era. To succeed in the fast
changing context of the Australian marketing, they must learn to take into consideration
the concerns, interests, and needs of all types of customers including the ethnic ones.
What the ethnic consumers have in common with the mainstream population and how
they differ from them and what is the best way to target them need to be properly
understood. This paper seeks to address some of these issues and provide some food
for thought for further research.
____________________________________________
Syeda Nusrat Afza, School of Marketing, Australian School of Business, The University of New South
Wales, Email: [email protected]
Mohammed A Razzaque, School of Marketing, Australian School of Business, The University of New
South Wales,
Afza & Razzaque
Originally derived from the Greek word ‘ethnos’ meaning heathen or pagan (Williams,
1976; p. 119), the term 'ethnic' has been defined in many ways. Almost a century ago,
Max Weber (1922) defined ‘ethnic’ as those human groups that entertain a subjective
belief in their common ancestry because of similarities of physical type or of customs or
both, or because of memories of colonization and migration. Social sciences tend to use
‘ethnic’ to generalise all human groups that regard themselves and are regarded by
others as culturally distinctive (Eriksen, 1993). Marketers, however, use the term to refer
to a segment or sub-culture that can be distinguished from the dominant culture on the
basis of their cultural background, affinity and genetic heritage (Jamal, 2003). By
embracing the language and traditions of their homeland, the immigrants create a path
for transmitting their ethnic culture.
The importance of the role that ethnicity plays in marketing in multicultural societies
cannot be overemphasised. The cross-cultural marketing research literature recognises
the pervasive role of culture in the consumer behaviour process (de Mooij, 2004); and
led by the researchers in the USA ((Burton 2002), there has been a general increase in
discussions on how to market to ‘ethnic consumers’ within ethnically diverse countries.
But despite the fact that multicultural marketing offers a new strategic focus for product
and market development (Nwankwo and Lindridge, 1998), many multicultural societies
have not paid due attention to this important area. This neglect is particularly apparent in
Australia and New Zealand.
Australian Ethnic Market: A Neglected Area
Since the end of World War II in 1945, people from various countries started migrating to
Australia. The early settlers, most of who were of European origin (Anglo-Celtic), now
constitute the mainstream Australian population. Later years saw the coming of the
Greeks, the Italians and other Europeans. Adoption of generous immigration policies in
the 1970s witnessed an increased influx of Turkish, Lebanese and Indian people soon
followed by the Vietnamese; Philippinos, Malaysians, Cambodian and Chinese people in
the 1980s. In the 1990s migrants came from former Yugoslavia, Bangladesh
Afghanistan, Iraq, Iran and Pakistan. According to one report (Skwirk.Com.au),
proportion of Asian migrants (out of net migration intakes) increased from 15.2 per cent
in 1977 to a staggering figure of 50.6 per cent in 1991-92. The share of Anglo-Celtics
dropped from 90 percent in 1947 to 70 percent in 1999. A projection in the beginning of
the new millennium indicated that continuation of this trend would bring the share further
down to 62.5 percent in 2025 (Price, 2002). More than 115,000 migrants and refugees
are granted visas each year (DIMIA, 2005). Australia's population grew by 1.8% during
the 12 months ended 31 March 2010 of which 60% was contributed by immigration
(ABS 2010).
Contribution of these multiethnic and multicultural immigrants to Australian society,
culture and prosperity has been an important factor in shaping modern Australia. The
growth of the ethnic population and their increasing purchasing power represent
significant marketing opportunities for the Australian marketers. Yet, interest in targeting
these markets with appropriate strategies seems to be lacking for a host of reasons.
They include a lack of data and specific market research (Seligman, 2001); the fear of
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being perceived as racist, stereotypical, tokenistic and patronizing (Fletcher, 2003), a
lack of knowledge of specific cultures, religions and languages (Considine, 2003), and
general nervousness and fear (Curtis, 2001). Burton (2002) identifies a number of
reasons for neglecting the ethnic market in the UK which includes negative stereotypical
images of ethnic minorities held by some sections of the population; absence of ethnic
minority managers in senior marketing positions; lack of knowledge as to how to target
the ethnic market; and finally marginalization of the ethnic market because of its small
size (Burton 2002). All these reasons, albeit in varying degrees, hold good for Australian
ethnic markets as well. This is evident in a report that noted that Australian marketers
spend only 6% on ethnic marketing ―(Smith 2005). There is no doubt that by neglecting
the untapped potential of the huge ethnic markets Australian companies are missing out
on great opportunities.
Problems in Reaching the Ethnic Market
Segmenting the market
There are several problems in reaching the ethnic consumers. Casual as well as serious
discussion with many Australian marketers tend to give the impression that the difficulty
in segmenting the ethnic consumers is the major problem hindering Australian
marketers to venture into the ethnic markets. But they do not seem to be aware what
should be done and how. Indeed, there is very little research attention in this area. While
the rapidly increasing number and purchasing power of the Australian ethnic minority
consumers highlights the importance of sub-cultural segmentation and targeted
marketing to reach these consumers, there does not seem to be any serious effort to
tackle this problem. Perhaps the fact that the Australian ethnic market is not a single
homogeneous ‘subculture’ makes the task more difficult to handle. While marketing
textbooks tell us that segmentation variables are the criteria that are used for dividing a
market into segments and there are a large number of options for segmenting a market
(Jobber, 2004) marketers are unsure as to how to go about it. Their gut feelings do tell
the that they cannot adopt a 'one size fits all' strategy; but the so-called 'Melting Pot
Theory', which suggests that a process of acculturation, resulting from inter-racial
interaction and cultural contacts between the mainstream host society population and
the ethnic minority groups eventually results in the ethnic minorities becoming more
mainstream-like (Kinra, 1997 in Lee et al., 2002) perhaps confuse them.
Smith (2005) has made some interesting observations about the Australian population.
Quoting SBS Radio national sales and marketing manager Thang Ngo, he reports that
23% of Australians were born overseas; almost the same percentage speak a language
other than English at home; and consume non-English media. They speak 200
languages —making the task of advertisers difficult and daunting. Indeed,
communicating to the ethnic consumers appears to be another difficult issue hindering
marketers to reach the ethnic consumers.
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Communicating to the market
Communicating to the ethnic consumers is a complex issue. Being of ethnic origin
themselves, the authors realise that ethnic markets are quite sensitive to
advertisements, the most common promotional tool used by marketers. In many cases
ethnic consumers do not even get the intended message that a specific marketer is
trying to communicate to them. To make things worse, they often find an ad offensive to
their taste, belief and/or culture. The language barrier, the cultural divide along with the
people projected in the ads do not necessarily appeal to the ethnic consumers; many
ad-makers seem to be totally oblivious of the existence of ethnic consumers and the
market potentials they have. Some examples of such ads include those of Domino’s
pizza, McDonalds, KFC, Hungry Jacks, and Coles. While these companies are good
candidates for getting patronisation from ethnic consumers; their ads do not seem to be
much concerned about drawing the interest of the ethnic communities. Consequently,
the ethnic viewers feel ignored and the ad fails to have any positive impact on them.
While most of the new products that Australian companies introduce in the market do
not necessarily satisfy the basic needs of the ethnic consumers, those which do, suffer
from what may be dubbed as promotion myopia. Introduction of the right product to the
right customers also face problems because of the presentation and/or focus of
advertising whether it is on audio visual media or in the print media. There has to be
some ways to break the linguistic barrier, even if it is in a limited scale. Use of
occasional multi-language ads or ads featuring a multiracial context in the visual media
on specific days of importance to ethnic communities (e.g., major festivities or
celebrations) might be a good starting point. Use of ethnic print media is a viable option
too.
It is heartening to note that in the last couple of years, some of the Australian
businesses and local governments initiated different strategies to support ethnic
population and make them aware of different products and services. Chinese New Year
is a good example of this. While different businesses are taking part in the celebration of
the Chinese New Year festivities, various local government agencies (e.g., city councils)
have been providing necessary support for the Chinese community. Companies such as
Optus, Lebara, Lyca were seen to participate in different cultural events such as ‘Haldon
street festival’ in Lakemba, a Western suburb of Sydney and ‘Beamish street festival’ in
Campsie. By their participation, these companies are using the niche marketing strategy
to attract a large number of Asian, East European and Middle Eastern migrants who are
living in Western Sydney. Also some major corporations are now looking to ethnic media
and are using ethnic personalities such as prominent Greek, Nick Giannopoulous, in
their ads (Cincotta, 2004).
Growth of small ethnic retailers
While the Australian grocery supermarkets have been struggling to reach their targeted
population; quite interestingly the scenario appears to be very different for the small
ethnic retail operations. In a very recent (July 4, 2011) article ‘Retail sales continue to
fall both in South Australia and nationally’, ‘The Daily Telegraph’ reports that despite
economists’ forecast for a 0.3% rise in retail sales in May, 2011, there was actually a
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slump of 0.6% in the national retail turnover (Australian Bureau of Statistics). Although
no reliable statistics is available, discussion with several small retailers specifically
catering to the needs of ethnic customers reveal that they were doing fine. For quite
some time Australian supermarket giants such as Coles, Franklins, Woolworths and IGA
have been trying to focus on some ethnic minority groups as shown in their product
isles. For example, Coles have Asian, Indian and Kosher as well as some Halal foods.
But these supermarkets have not been as successful as the small sized suburban ethnic
retail grocery shops that appear to be busy with customers and are doing brisk
business.
The marketing of ethnic food items by supermarkets can shed some light on the
situation. This would help understand how the ethnic customers are ignored by
marketers in their marketing efforts. There are two broad categories of food products
that different groups of ethnic consumers buy. The first category includes food items
which are unique to various ethnic communities and supermarkets may not be
interested in selling these items. These are the so-called ‘specialty products’ – i.e.,
exotic, culture-specific foods with rather limited demands for which ethnic consumers
would always go to shops run by people from their own ethnic community even if they
are located very far from their place of residence. It is the second category of items on
which the supermarkets are losing out because of poor marketing. This category
includes items for regular, day-to-day consumption; the so-called ‘convenient products’
which are by and large ‘ethnicity neutral’ and consumed by almost all consumers
irrespective of their ethnic origin. Examples include staples such as rice, flour, wheat,
bread, potato, cooking oil, dairy products, sugar, vegetables chickpeas, lentils, wheat,
potato, beetroot, spinach, sweet potato and common spices and a host of similar other
products. However, supermarkets fail to attract ethnic customers because of their pricing
policy.
It is important to understand that most ethnic minorities from China, Japan, Indonesia,
Malaysia, South and Central America, other Asian countries, Africa or the Mediterranean
region, generally tend to be price sensitive. The supermarket prices are way too high for
them; price comparison of selected items presented in Table 1 would confirm this.
Hence they prefer to buy their grocery supplies from the ethnic shops run by the
Chinese, Vietnamese, Lebanese, Indian, Bangladeshi or other ethnic entrepreneurs.
These small-scale ethnic retail operations, knowingly or unknowingly, have been able to
position themselves as viable alternatives challenging the power of the supermarkets.
Ethnic consumers living in suburbs where there is no ethnic grocery outlet often travel
long distance to ethnic outlets in other suburbs to get their daily, weekly or monthly
supply of groceries.
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Table 1: Comparison of average prices of selected items: Ethnic shops vs.
Supermarkets.
Food Items
Local Ethnic Shops
Supermarkets
Rice (Basmati)
$29-$40 (25 kg Bag)
$5-$8 (1 kg Pk)
Rice (Sticky)
$29-$40 (25 kg Bag)
$5-$8 (1 kg Pk)
Plain Flour
$10-$15 (12-15 kg Bag)
$2-$4 (1 kg Pk)
Oil (vegetable/sunflower) $20-$30 (15-25 litre container) <$6/litre
Chickpeas
$1.5-$3/kg
$3-$6/ 500gm
Lentils
$2.5-$3/kg
$2-$4/250gm
Olive(pickled)
$8-$15/2-3kg Container
$2.5-$6/250gm
Potato
$3/ 5kg bag
$2-$6/ kg
Sweet potato
$4-$5/5kg bag
$2-$4/ kg
Spinach
69c-$1.4/ bunch
$1.98-$3/ bunch
Ground Spices
$1-$3/250gm
$2-$4/50gm
Chillies(green-hot)
$15-$35/kg
Mostly not available
Garlic paste
$4-$4.50/1kg container
$3-$6/250 gm container
Whole ginger
$9-$14/kg
$12-$20/kg
Ginger paste
$4-$4.50/1kg container
$3-$6/250 gm container
Sauces
80c-$3/250ml
$2-$5/250ml (if available)
Vinegars
80c-$1/500ml
$1-$4/500ml
Halal meat
$4-$8.5/kg (chicken/beef/goat) $7-$17/kg (not available)
Kosher meat
$5-$8.5/kg
(chicken/beef/lamb)
$10-$20/kg
N: B: These prices are randomly picked from different ethnic shops and big supermarkets for an in general
idea about the market price of some randomly picked food products, the price may vary slightly in places.
The Religion Issue
For many ethnic customers, particularly the Muslim and the Jewish consumers, religion
plays a very important role in their purchase decision. For Muslims, food must be Halal;
the Jewish people would not buy a product if it is not a Kosher product. Unless these
products are properly labelled and/or displayed in separate sections away from nonHalal products, Muslim consumers are unlikely to buy them. Indeed, product labelling is
a very important factor for many ethnic consumers with strong religious conviction; they
often seek detailed information about certain products they are interested in. For some
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consumers, particularly the educated ones, proper product labelling can help solve such
problems. However, for consumers with little or no knowledge of English, even proper
labelling offers little help; they like to have individual assistance from people who can
communicate the product information to them. To the best of the authors’ knowledge,
such services are not available in the Australian supermarkets; but the ethnic shops
provide that service. For such shoppers ethnic outlets present themselves as comfort
zones where they can enjoy same or similar culture, a friendly chat using the same
language and confidence. This exemplifies a non-price competition between David
(ethnic shops) and Goliath (supermarkets) in which David wins.
Concluding Comments
In the light of discussion presented in the paragraphs above, the main problems
negating the Australian marketers’ success with the ethnic customers is their lack of
knowledge about these customers. According to the extended customer loyalty
framework posited by Dick and Basu (1994), the individualism or collectivism and
uncertainty avoidance characteristics of the customers are influenced by their respective
cultures. Marketers’ ignorance about these important cultural aspects may result in a
hard to reach situation for the marketers. The marketers must try to understand these
consumers better. They need to research into their specific needs and wants, their
consumption patterns, shopping orientation, response to promotion, purchase decisions,
media usage, brand loyalty and responses to marketing. They must find out to what
extent these ethnic consumers differ from the mainstream Australian consumers.
Echoing the thoughts of Burton (2002) and Cui and Choudhury (2002), it is argued that
segmenting the Australian ethnic markets using ethnicity-related variables combined
with a number of traditional segmentation variables would be more effective. The task is
challenging, but not impossible.
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