Selling to Many Cultures — Within the U.S.
Too many companies do not effectively target growing ethnic and immigrant markets within the U.S.
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International markets have been increasingly important for many U.S. companies, and they are the assumed priority for future growth. Wal-Mart Stores Inc. is representative: In 1998 it obtained 6% of its revenue internationally; by 2008, international revenues constituted 25% of Wal-Mart’s much larger sales base. No growth-minded executive should argue against such initiatives.
But while many companies have plans to penetrate emerging markets like the so-called B-R-I-C nations (Brazil, Russia, India, China), too many continue to overlook enormous opportunities within the U.S. — such as growing ethnic markets. The combined African-American and Hispanic markets in the U.S. are larger than the economies of all but 13 countries, and more than 2 million people in the country speak Chinese. White people, 67% of the U.S. population in 2005, will represent less than half of the population (47%) by 2050, while Latinos will be nearly 30%, Blacks 13% and Asians 9% by then. What’s more, a 2009 Pew Research Center study indicated that one in five Americans will be immigrants in 2050 (versus one in eight in 2005), thanks to a foreign-born population that is growing at almost three times the rate of the overall U.S. population.
However, a superficial understanding of these data can lead to uninformed beliefs — and needlessly high costs — in selling to ethnic markets within the U.S. Our experience indicates that many current “multicultural marketing” efforts are both limited and limiting because they lump groups into broad categories that do not reflect actual purchase preferences and buying behavior. For example, the term “Asian-American” refers to a very diverse array of groups, and recent immigrants from Vietnam and India may not have that much in common when it comes to buying behavior.
Companies must go beyond gross demographic data in order to craft effective strategies for marketing to specific ethnic groups. What languages other than English do these customers speak? What are the countries of origin of different Asian or Hispanic groups in a given market, and what are the implications for your website, product literature, retail locations and other marketing variables?
Rewards for this type of analysis can be significant. After rethinking its initiatives, PepsiCo Inc. found profit opportunities in taking a sophisticated multicultural approach to its home market and existing product line. Targeted winners in the U.S.
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hari
Edwin Martinez
Wanla Cheng