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The following is an entry from Retail Wire:
"BrainTrust Query: How is the recession changing Hispanics as consumers?
By David Morse and Maria Gracia Inglessis, New American Dimensions, LLC
06/19/09
How is the economy affecting the Hispanic market? The answer, at this time, may be inconclusive. In a recent article by Terry Soto, president & CEO of About Marketing Solutions, she cites data from Experian and concludes that Hispanics may be 'recession proof' or at least 'recession aloof.' For example, 34 percent of Hispanics are optimistic about their finances in the coming year (compared to 25 percent of non-Hispanics), and 29 percent of Hispanics are more positive about the U.S economy (compared to 21 percent of non-Hispanics).
Hispanics may also be less burdened with financial difficulties because they are not as involved in some of the most problematic areas. According to Packaged Facts' analysis of Experian Simmons Summer 2008 National Consumer Survey data, 46 percent of Hispanics use credit cards compared to 72 percent among non-Hispanics, and only 15 percent of Hispanics own investments (compared to 43 percent of non-Hispanics). The Simmons data also highlight that Hispanics are more likely to rent their homes than non-Hispanics. This makes them less likely to be affected by the mortgage foreclosure.
There are some categories in which Hispanics are spending more than their non-Hispanic counterparts. According to the Packaged Fact Study, Hispanics spend more in:
- Food at home (8.3 percent vs. 6.8 percent - of total annual expenditure)
- Poultry (0.5 percent vs. 0.3 percent)
- Fresh vegetables (0.6 percent vs. 0.4 percent)
That Hispanics spend more in food is not surprising. They have bigger households and like to cook from scratch. But interestingly enough they are also spending more in less expected areas, for example, in apparel and services (4.8 percent vs. 3.7 percent). What is more, Hispanic men are more likely to keep up with the latest fashion (25 percent vs. 17 percent). Also...
- They like to experiment with new styles (26 percent vs. 14 percent)
- Buy the latest fashion every season (17 percent vs. seven percent)
- Enjoy any kind of shopping (28 percent vs. 13 percent)
More Hispanics say they buy recycled paper products (men 40 percent vs. 34 percent and women 45 percent vs. 39 percent). Also, Hispanics are more likely to claim that they would pay more for environmental friendly products (men 42 percent vs. 35 percent and women 47 percent vs. 40 percent).
But additional data from the Nielsen Homescan Hispanic Panel present a less positive view on how Hispanics perceive that the current downturn is affecting their lives. The data show that about half of Hispanics feel that their household is somewhat or much worse financially now than a year ago, and 37 percent feel that their or their spouse's job is not too secure or not secure at all. More than 70 percent feel that their level of savings to deal with potential disasters is not secure.
According to this study, not only do Hispanics have a less positive outlook, they have changed some of their consumer habits; for example, in the past three months they are eating at fast food restaurants less often (64 percent vs. 47.9 percent of non-Hispanics), and close to 45 percent are bringing lunch to work more often (compared to 36 percent of non-Hispanics)."
Nothing surprises me about the data and implications. We addressed this issue on my company’s website on April 14, 2009 (link, http://www.arambulaphillips.com/?p=75)
My advice to any marketers is to follow proper marketing disciplines when addressing the Hispanic consumer segment. Learn of your brand’s relationship with the Hispanic consumer. What role does the economy play? Is the consumer receptive to your communications?
The Hispanic segment could provide a positive ROI in marketing investment.
Copyright 2009, Carlos Arámbula. All rights reserved.
Can you recall the last time you heard anyone speak of his unmentionable BVD®’s? 
What about Nuprin®? How about Xerox®? Has anyone xerox’ed papers lately? A very common function back in the day. Remember the good old days when Oldsmobiles and Plymouths traversed the country’s roads? How about when Nolan Ryan took Nuprin® for his aches? Or when smokers and coffee drinkers knew exactly which toothpaste to use and what premium coffee to drink?
There are many factors that contribute to the demise or irrelevancy of a brand, this is not about listing those factors — ultimately bad brand management kills a brand — rather this is about another huge factor that is at the marketer’s doorstep and in due course will be the death of additional brands; demographic shifts in population.
According to the Pew Research Center, the Hispanic population in the U.S. grew by 10 million from the year 2000 to 2007. To put in perspective, the total U.S. population grew only by 20 million during the same period, which indicates that 50% of all the country’s population growth was contributed by Hispanics. In other words, of 50% growth, 30% was by native-born Hispanics with immigration accounting for the rest.
It’s ok then; native-born Hispanics will speak English and know my brand, right?
Native born Hispanics will speak English because they will be educated in the U.S., however they will be unfamiliar with your brands. Think about your introduction to brands. It was mom who initially brought the product home, dad's brand preference contributed to yours. But if mom and dad are foreign-born Hispanics, then your brand will not have that “little piece of real-estate” in the consumers’ brain.
Country of origin or cultural brands will have the advantage over yours. Almost everyone knows the Mission Foods brand, but how familiar are you with Picot®,
Bimbo®,
Lala®, or
Bedoyecta®? T
hese are brands with equity from their country of origin, and while you may not think it affects your brands, ask the Alka-Seltzer® f
olks at Bayer — Picot® outsells them in Walmart.
How do I learn if my brand will be affected by demographic changes?
Learn if your category is developed with the Hispanic consumer segment. Is your brand history seeded in the post WWII baby boom? Is your brand steeped in 1900’s Americana? Are you tapping the emergent consumer markets not familiar with your brand? If you are, is the message relevant or simply a translation?
Think about your personal experience: Remember traveling in the old station wagon and spending the night at the Holiday Inn®,
the familiar shag carpeting and AstroTurf® by the pool? The fun time you had while staying there. That’s a memory — a brand perception, that is not shared by about 15% of the US population.
Copyright 2009, Carlos Arámbula. All rights reserved.
One of the most memorable engineering management books I read in college is called “Breakthrough Thinking: The Seven Principles of Creative Problem Solving” by Dr. Gerald Nadler and Dr. Shozo Hibino. Actually, it's one of the best marketing management books I've read.
You may be a practitioner of one or more of the following principles. In fact, if you think back to the most successful work you have done, you will recognize you have incorporated all seven principles.
THE SEVEN PRINCIPLES
UNIQUENESS: All problems, issues or opportunities are different. Consumers and their needs are fluid. There are no controlled environments; you will always have changes. Throw away the old axioms or research the roots, you might find they where wrong all along. There are learnings, keep those and use them properly, but they are not patterns for your next strategic document.
HIERARCHY OF PURPOSE: Anything we do has a purpose within a hierarchy of purposes. Explore and expand purposes to understand what really needs to be accomplished. While it appears to be “common sense” the hierarchy of purpose is the first thing ignored when we are under pressure. Can you imagine building a house without a proper base because of deadline issues? Yet, I constantly see ad campaigns that where clearly started at the creative execution level that are completely devoid of strategy and tactical in nature.
Strategic advantage results when we clearly understand the context (from small to large) of our purpose as an advertising agency to the client’s business.
SOLUTION-AFTER-NEXT: What happens after our work achieves its objectives? Work backwards. Consider the solution you would recommend if in three years you had to start all over again. Recommend approaches today based on what might be the solution of the future. Ask yourself, once the campaign works, where should it have started? When was the tipping point? Was it a particular media option, programming, venue? Was it a convergence of several smaller successes? You will find several potential starting points -- that’s the beauty of it. Breakthrough Thinking should generate more than one big idea.
SYSTEMS: Everything is a system; product, price, distribution, media, competition, consumers, call centers, signage. Include all of them in your thinking. This is not just about the four P’s. It’s about the whole experience. Think about the first point of contact to the repeat purchase. Think of evolution, life of the product, and role of brand in the consumer’s life.
PEOPLE DESIGN: Involve all who will be affected by the strategy. Think of the Systems Principle, allow everyone affected by the strategy to participate in its development. Give everyone a stake in the development, implementation, and evolution of the strategy. This is also politically savvy.
COLLECT ONLY THE NEEDED INFORMATION: Study solutions, not problems. Collect only the information needed to continue the overall purpose. Keep in mind the Purpose Principle. Don't be a DRIP: Data Rich and Information Poor.
EVOLUTION: Install triggers for evolution of communications. Everything evolves.
Allow me to elaborate on why I feel the seven steps are important.
Studies have shown that around 8% of the people are intuitive “Breakthrough Thinkers.” Some of these folks have chosen marketing and advertising as their careers – only some of them. The rest tend to be administrators.
Following the Seven Principles can make intuitive thinkers and administrators work alongside. It organizes ideas and creates actions. There’s nothing wrong with administrators, we need them, they have a purpose on the system. Just keep in mind that leadership and management is always above administration.
Now go back and review your most successful marketing or advertising efforts. You will find that success included the seven principles.
And should you find one example lacking the seven principles, it was a fortunate stroke of serendipity.
I know some will be bothered by my practice of engineering principles in advertising. After all Bernbach said "Advertising isn't a science, it's persuasion. And persuasion is an art."
I agree with Bernbach. And he would be the first to tell you that art has a process -- as would many other artists.
Bernbach also said "Properly practiced, creativity can make one ad do the work of ten."
Copyright 2007, Carlos Arámbula. All rights reserved.
