Not long ago, the Hispanic market was largely ignored by marketers and media. The 2000 census data brought attention to their significant buying power and expected growth. Now marketers are looking to tap into this lucrative market. In this blog, I’ll discuss the size of the Latino market, their shopping behavior and how to successfully understand their needs and wants.
Size of Market
According to the U.S. Census Bureau’s figures, the U.S. Hispanic population is more than 41 million, one fourth of which is the approximate 9 to 10 million undocumented Latinos in the United States. The 2010 Census Bureau data reported that Hispanics accounted for more than half of the U.S. population increase over the past 10 years, which is a huge milestone of reaching 50 million (Mueller). Latinos are equivalent to 1 in 6 Americans (“Latino Purchasing Power,” 2011).
Hispanic households earn sixty-nine cents to every dollar in income compared to white households. The Congressional Hispanic Caucus Institute found that Hispanic incomes are growing faster than incomes for the mainstream population. This results in a growing middle class among Hispanics where more Latino families have annual incomes over $40,000, an 80% increase between 1980 and 2000 and three times the rate of increase of the overall middle class (Mueller). As a result of this above average population growth and improved earnings over the past three decades, the Latino population is forecasted to reach $1.3 trillion dollars in buying power by 2015 (“Latino Purchasing Power,” 2011).
Because Hispanics like to cook from scratch more than the average consumers, they spend more on fresh produce and meat, spices, seasonings, and condiments. The food marketing industry should not ignore these shoppers.
According to Unilever’s research study, they found that Hispanic women are significantly more aware by a 36% to 48% margin of specials before going to the store. Hispanic shoppers also knows their needs beforehand, so 56% of their total grocery spending occurs on routine trips versus 22% in the general market. Also, only 2% of their shopping trips are urgent opposed to 19% for the general market; a margin of one in fifty versus one in five. And lastly, more than 50% of the respondents in those surveyed pay in cash, with 25% using debit card and only 11% paying by credit card.
How to Appeal
When communicating to Hispanics, it is four and a half times more persuasive to use the Spanish language than English. But understanding the different dialects and accents of Spanish speaking groups is also important. A 2005 Multicultural Marketing Study of Hispanic consumers showed that Hispanics use both Spanish and English languages and media. Spanish is important in their lives even if English is used prevalently. Toyota did an excellent Super Bowl commercial in 2006, which featured a father and son speaking in both Spanish and English. This ad reappeared on Spanish and English speaking networks.
As media consumers, Hispanics are heavy television users compared to the general public. Hispanic TV viewership is continuing to grow. Their average viewing per week is seventeen hours, which is 30% more than the average U.S. household at 13 hours.
Radio is also an important medium in the Hispanic community. Given their largely concentrated service and labor occupations in the U.S., they tend to listen to the radio often. Radio also relates to their heritage. In Latin America, there are some four thousand radio stations, making radio one of the most community oriented mediums on the continent.
A fundamental mistake marketers make while trying to reach the Hispanic audience is to view the Hispanic community as homogeneous. Over 80% of Hispanics say they identify themselves by their country of origin or more broadly as Latino or Hispanic. Because Hispanics emigrated from different countries at different times and for different reasons, demographics can be quite different.
Effective marketing and advertising means thoroughly understanding Hispanics as whole and many sub-groups, including: Mexicans, Puerto Ricans, Cubans, Dominicans, Central Americans, and South Americans. Language, religion, and family are key values of the Hispanic communities. Though there are differences in language, they are still likely to understand each other.
After language, religion is also an important unifying factor. The vast majority are Christian. Because of Christian religious values, family is very important to Latinos.
Marketers must be aware of the increasing growth of the Latino market’s population and buying power. More importantly, when targeting these communities, it is crucial to understand their culture, needs and wants. Beyond language, family and faith, marketers will continue to need to understand deeper wants from the Latino population in America.
Mueller, BM. (2008). Communicating with the multicultural consumer: theoretical and practical perspectives. New York, NY: Peter Lang Publishing.
Latino purchasing power now pegged at $1 trillion. (2011, May 04). Retrieved from http://www.mariowire.com/2011/05/04/latino-purchasing-power-1-trillion/Advertising Marketing