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The Recession As Hispanics See It

Very interesting article from Patricia Graham, Executive Vice President and Chief Marketing Officer of Knowledge Networks.

The Recession As Hispanics See It

by Patricia Graham, April 23, 2009, 11:30 AM

It is no secret that the struggling economy is affecting everyone in one way or another. But how, specifically, are Hispanics viewing and weathering the downturn? Data sources abound about the general population — polls from various sources that may or may not be statistically representative of that or any group. But those who need to make marketing and business decisions taking into account Hispanics and the economy need something more substantial.

New data from a representative cross-section of all Americans — including Hispanics — is providing just that, along with some surprising insights, with greater reliability, on the recession as Hispanics see it.

Knowledge Networks asked 28,754 people (ages 18 and above) — including 2,511 Hispanics — on our nationally representative KnowledgePanel® the following question: “Do you consider the state of the economy to be better, worse, or about the same relative to one year ago?” In the general population, 88% said “worse,” and 10% said it’s about the same, with no differences appearing by ethnicity — indicating a common view: “It’s worse.” It seems that we see ourselves as sharing the same boat.

The future: Optimism versus pessimism

When it comes to optimism about the future, however, clear ethnic and racial differences do emerge. Hispanics and African Americans are envisioning the health of our economy one year from now very differently from Caucasians.

In their survey responses, Hispanics were less likely than the general population or African Americans to say that the economy would get worse — 29% for Hispanics, versus 37% for African Americans and 34% for Caucasians. In fact, 38% of Hispanics think there will be no change in the economy one year from now, a stasis view that African Americans do not share (29%).

What behaviors would they change?

Nationally, attempts abound to predict how people will behave in the marketplace, given differences in economic psychology among different ethnic and racial groups. In short, what might people change if the economy gets worse … or if it gets better?

Let’s look at what Hispanics and other groups said they would do, as a consequence of the economy getting worse. Almost everyone who self-evoked the “worse” scenario will change how much they spend. Yet, there are differences in predicted saving and investments by ethnicity. Hispanics (42%) and African Americans (44%) are less likely than Caucasians (49%) to change how much they save. They also are less likely to change how much they invest; 24% of Hispanics said their investment level would change, versus 30% in the general population.

And if things got better . . . ?

With an improving economy, it seems there is reason to believe that spending will bounce back. When asked, “Which of the following do you think you might change as a result of the economy improving?” Forty-one percent of the general population said they would change how much they spent; a drop of thirty-seven points relative to their spending behavior ‘if the economy was worse.’ So average people in the U.S. will be much less likely to reconsider their spending habits if the economy improves.

However, we again have a difference in the self-predicted behavior of Hispanics (and African Americans) compared to Caucasians under the improved economic scenario. The difference between their “economy gets worse” and “economy gets better” spending predictions was smaller for Hispanics (30 point difference) and African Americans (26 points) than it was for Caucasians (37 points).

This supports the conclusion that Hispanics may be among the last to have their spending habits change drastically as the economy improves — because they predict a smaller change in their spending for a positive economy. Ongoing online survey research using a representative sample can illuminate whether this is indeed the case.

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Thought of the Day

time is an illusion

time is an illusion

The Recession As Hispanics See It

Very interesting article from Patricia Graham, Executive Vice President and Chief Marketing Officer of Knowledge Networks.

The Recession As Hispanics See It

by Patricia Graham, April 23, 2009, 11:30 AM

It is no secret that the struggling economy is affecting everyone in one way or another. But how, specifically, are Hispanics viewing and weathering the downturn? Data sources abound about the general population — polls from various sources that may or may not be statistically representative of that or any group. But those who need to make marketing and business decisions taking into account Hispanics and the economy need something more substantial.

New data from a representative cross-section of all Americans — including Hispanics — is providing just that, along with some surprising insights, with greater reliability, on the recession as Hispanics see it.

Knowledge Networks asked 28,754 people (ages 18 and above) — including 2,511 Hispanics — on our nationally representative KnowledgePanel® the following question: “Do you consider the state of the economy to be better, worse, or about the same relative to one year ago?” In the general population, 88% said “worse,” and 10% said it’s about the same, with no differences appearing by ethnicity — indicating a common view: “It’s worse.” It seems that we see ourselves as sharing the same boat.

The future: Optimism versus pessimism

When it comes to optimism about the future, however, clear ethnic and racial differences do emerge. Hispanics and African Americans are envisioning the health of our economy one year from now very differently from Caucasians.

In their survey responses, Hispanics were less likely than the general population or African Americans to say that the economy would get worse — 29% for Hispanics, versus 37% for African Americans and 34% for Caucasians. In fact, 38% of Hispanics think there will be no change in the economy one year from now, a stasis view that African Americans do not share (29%).

What behaviors would they change?

Nationally, attempts abound to predict how people will behave in the marketplace, given differences in economic psychology among different ethnic and racial groups. In short, what might people change if the economy gets worse … or if it gets better?

Let’s look at what Hispanics and other groups said they would do, as a consequence of the economy getting worse. Almost everyone who self-evoked the “worse” scenario will change how much they spend. Yet, there are differences in predicted saving and investments by ethnicity. Hispanics (42%) and African Americans (44%) are less likely than Caucasians (49%) to change how much they save. They also are less likely to change how much they invest; 24% of Hispanics said their investment level would change, versus 30% in the general population.

And if things got better . . . ?

With an improving economy, it seems there is reason to believe that spending will bounce back. When asked, “Which of the following do you think you might change as a result of the economy improving?” Forty-one percent of the general population said they would change how much they spent; a drop of thirty-seven points relative to their spending behavior ‘if the economy was worse.’ So average people in the U.S. will be much less likely to reconsider their spending habits if the economy improves.

However, we again have a difference in the self-predicted behavior of Hispanics (and African Americans) compared to Caucasians under the improved economic scenario. The difference between their “economy gets worse” and “economy gets better” spending predictions was smaller for Hispanics (30 point difference) and African Americans (26 points) than it was for Caucasians (37 points).

This supports the conclusion that Hispanics may be among the last to have their spending habits change drastically as the economy improves — because they predict a smaller change in their spending for a positive economy. Ongoing online survey research using a representative sample can illuminate whether this is indeed the case.

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An Ad that connects with the U.S. Hispanic Consumer

by Claudia Havi Goffan

Hispanic Advertising is about connecting with the U.S. Hispanic Consumer and their real-life experiences and, sometimes, it is simpler than imagined. Learn how Oreo reached the Hispanic Consumer with this outstanding campaign.

In my everyday life, I pay attention to advertisements—I simply love them. No matter where they are—TV, magazines, newspapers and even billboards—I can’t get enough of them. The one exception is Internet ads. They have to be extraordinary to capture my attention as a marketer. Companies are just simply not investing enough creativity on them yet. As a Hispanic marketer and a Latino woman, my heart melts when I realize a company has made “the” total connection with the Hispanic consumer. A great example is this magazine ad that Nabisco produced for its Oreo brand.

It features a dad, a child, an Oreo cookie with the caption: “Dad learns to eat Oreos from me.”

This Oreo Print Ad speaks to the Hispanic market acculturation experience

This Oreo Print Ad speaks to the Hispanic market acculturation experience

Hispanic children, either born in the U.S. or abroad, are exposed to many experiences that their non- or semi-acculturated parents may never experience, unless it’s through them. So, how do you think a Hispanic dad will learn to eat an Oreo the American way?

That’s why this ad works. There are no stereotypes. There is only a human truth.

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Absolutely love reading this quote. I never get tired of it. Apple Ad great words

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Understanding Hispanic Market Segmentation – Part I

Let’s talk segmentation – Part I

by Claudia Goffan  CEO of Target Latino
Graphics by Jim Perez

Hispanic Market Segmentation:

The reasons behind the use of acculturation levels in Hispanic Marketing. Hispanic Market segments and projected size by Claudia Goffan, CEO of Target Latino.

Why levels of acculturation?

  • In the 1900’s European immigrants would force their children to forget about the customs of the “old world” and “just be” Americans – this was a process of assimilation
  • To acculturate means to incorporate or acquire a new culture without foregoing another one
  • Hispanics do not “assimilate”, they “acculturate”. They do not let go of customs and/or language

Facts about Hispanic Market Segmentation

Hispanic Market Segmentation

Hispanic Market Segmentation

The three segments by Acculturation Levels

  • Non-Acculturated: Persons that only navigate within the Latino culture. Most of them have recently immigrated to the U.S. and prefer to speak Spanish
  • Acculturated: Persons born in the U.S. of Hispanic descent. They prefer to speak English and can navigate into the Latino culture
  • Semi-Acculturated: People that can navigate in both cultures.

What factors get them from one segment to the next?

  • Fully-Acculturated: Hispanics are proud of their culture and parents will tend to teach their U.S.-born children the customs of their ancestors
  • Non-Acculturated: Hispanics born outside of the U.S. can only navigate from non-acculturation to semi-acculturation. The speed at which this will take place depends on these three major factors:
    –Time
    –Education
    –Socio economic status in country of origin

How fast will the market acculturate?

The speed at which this will take place depends on these three major factors:

  • Time: the longer they live in the US, the longer they are exposed to a new culture and are able to incorporate it into their everyday lives
  • Education: the higher their education level, the easier the understanding of another culture will be
  • Socio economic status in country of origin: the higher the socio economic status they enjoyed in their country of origin, the higher the likelihood that they have been exposed to other cultures, thus enabling a faster and smoother transition

Here are some examples of acculturation levels and speed:

  • My brother was born in Buenos Aires, Argentina -30 years old at the time-, highly educated -a lawyer-, seasoned international traveler and with 6 years of English studies from the London Cultural Institute under his belt. He was visiting me in Los Angeles.
    On the second day of his visit, I arrived home to find him holding a box of sugar and laughing so hard he was in tears. He kept on saying, “soy un sudaca (I am so third world).” I didn’t understand what he was talking about at first, so I waited for him to calm down. When he did, he explained to me that he had ripped the top of the box open in order to reach the sugar at which time he realized that there was a pouring spout on its side.As you can see, it took him just a few minutes to “acculturate”, that is, to learn to navigate in the American culture (at least a little bit).
  • A friend of mine took a little longer to acculturate. She is also very well educated -a dentist- and a world traveler, but is older than my brother and understands very little English. Apparently she had bought a brand of laundry detergent at the supermarket to wash a sweatshirt I had given her. After washing it, she remarked that the sweatshirt was of low quality, because it had faded so badly. I was puzzled, but soon forgot about it.When she returned back to her country, she left the “detergent” with me. I immediately noticed that it wasn’t detergent at all, it was “bleach.” She had mistaken a product type for a brand. No wonder the blue sweatshirt had faded.In order to acculturate she had to be told about her mistake. You can bet she never did that again.
  • Latino banks spend more than a year teaching its underserved Hispanic customers how to use the ATM machines. The reason is that most of their customers have never used one. The bank is acculturating them into American society.

Differentiating Characteristics between segments – Hispanic Market Segmentation

Hispanic Market Segment Characteristics

Hispanic Market Size

  • Population: 42.7 million as of July 1, 2005 or 14 percent of the nation’s total population. (This estimate does not include the 3.9 million residents of Puerto Rico.)
  • 102.6 million – The projected Hispanic population as of July 1, 2050 or 24 percent of the nation’s total population on that date.
    -Source: Census data
  • We need to be aware that in this market there is about a 40% to 50% undercount

Hispanic Market Size by Acculturation Levels Segment

Hispanic Market Segments Size

Hispanic Market Segments Size

By Havi Goffan, CEO of Target Latino

https://www.targetlatino.com/

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How do current immigration issues “really” affect the U.S. Hispanic market?

by Claudia Goffan

Hispanic Immigration Issues

Hispanic Immigration Issues

We are all very aware of the current immigration issues. New legislation is being passed nationwide that restricts the undocumented immigrant from renting an apartment, obtaining a driver’s license or getting a job. Areas with high concentration of non-acculturated Hispanics also suffer from frequent ICE (ex-INS) raids.

This is a harsh reality to face for all of those who aspire for the “American Dream,” but don’t have the proper documentation. This group of immigrants can be divided into three subgroups. The first subgroup will permanently return to their country of origin, because of the current state of affairs. The second subgroup will return home, but might venture back to the U.S. when the political and economical climates become more hospitable. The final subgroup will remain in the U.S., but migrate to more lenient states.

The people that are returning to their countries of origin are deciding to stay there due to improved and stabilized economies, lower cost of living and the comfort of having family and friends near by.

The immigrants that are choosing to stay in the U.S. are moving to more tolerant states, such as Oregon, Alabama, North Carolina and Texas. In these states they are able to obtain a driver’s license and rent an apartment with their home-country documentation.

What does this mean to marketers in the U.S.?

It is very clear that the affected portion of the Hispanic market is the underserved and non-acculturated—approximately 12 million people that do not show up on the Census data.

This is bad news for companies that have only targeted the aforementioned group because their revenues are highly tied to a thinning market.

What’s the good news? The Hispanic market is not only composed of the underserved or non-acculturated. The rest of the market accounts for over 14% of the total US population (Source: Census Data 2000). This is the market that you will have to cater to now and in the years to come.

What can U.S. companies do?

  • Re-evaluate their target market: Focus on the more established Latino population.
  • Evaluate the feasibility of successfully offering the same product or service to the fully and semi acculturated segments of the Hispanic market.
  • If this is not possible, see about expanding the product line and develop a product that would appeal to these market segments.

2013 Immigration Update

These immigration issues I have forecasted became a reality. Of course, the economy going downhill had a strong impact on undocumented Latinos leaving the country as well. It’s difficult to still believe in the “American Dream” when the possibilities are slim. We hope there will be a solution soon for the people that remain.

Meanwhile, those marketers that realized the Hispanic market is not only composed of non-acculturated Hispanics continue to profit from this ever growing trillion dollar market.

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