The Cultural Connection

When Lisa Skriloff launched a niche business focused on diversity marketing in New York City 15 years ago, many of her potential clients didn’t understand what the term even meant. But they do now.

“Now we get calls from people who 
already know,” says Skriloff, whose public relations and marketing firm, Multicultural Marketing Resources, represents leading experts in marketing to Hispanics, Asian Americans, African Americans, and other groups. “I’ve gone from educating people about why they should invest in diversity marketing to telling companies how best to take advantage of this market.”

Diversity marketing is the practice of communicating to diverse communities with a targeted message that takes into account a market’s cultural differences and behaviors. It 
encompasses major ethnicities, such as African Americans, Hispanics, and Asians, as well as groups such as gay, lesbian, bisexual, and transgender individuals, senior citizens, and people with 
disabilities. Often also referred to as ethnic marketing or multicultural marketing, diversity marketing, at its best, forges a deeper connection between a business and its consumers that results in business growth and brand loyalty.

In order to achieve this, experts say, a business must do more than put a 
person of color or an individual representing a specific group on its packaging. The best diversity marketing practices demonstrate an authentic and meaningful understanding of a particular 
market, as well as a sensitivity to the 
audience you are trying to attract.

Room for growth
Why are so many businesses, both large and small, looking to diversity marketing as a source of revenue growth? Mainly because it makes good business sense, says Esther Franklin, executive vice president and director of cultural identities for Starcom Mediavest Group (SMG) Multicultural, which recently released a proprietary research study on African American consumer behavior designed to reshape the way marketers view and value the ethnic market. “There’s been a lot of press from the U.S. Census Bureau that indicates the minority market will become the majority much faster than was originally projected,” says Franklin.

According to the U.S. Census Bureau, minorities—now roughly one-third of the U.S. population—are expected to become the majority in 2042, with the nation projected to be 55 percent minority in 2050. “These facts are a wake-up call to businesses,” Franklin says. “Are we ready? Can we connect to audiences moving forward?”

The savviest businesses won’t hesitate to explore the market and figure out what it could mean to their bottom line, says Rebecca Illingworth Radilla of Radilla Advertising in Chicago, which specializes in the Hispanic, African American, and other rapidly expanding markets. “You want to capture this 
audience in its first generation,” she says. “That’s where you can start brand building right off the bat. Many 
companies are starting to realize this.”

For those companies that do take the plunge, the potential payoff is substantial. According to the Selig Center for Economic Growth in Atlanta, total 
annual buying power in the United States was projected to exceed $10 trillion for the first time in 2007 and will exceed $13 trillion in 2012. Multicultural markets, which wielded more than a fifth of the total U.S. buying power in 2007, will make up the lion’s share of that growth. To capture a piece of the market, experts say, you’ve got to be willing to put yourself out there. “A company may find a huge gap in its business model if it doesn’t do this,” says Andrea Slodowicz, 
media director at 
42Degrees at Mediavest in Chicago. “You’ve got to improvise in order to stay relevant. Companies that are static won’t succeed.”





Brand Loyalty

94 percent of Latinos are likely to buy a brand that provides the best customer service.

92 percent of Latinos are likely to buy the best-known brand that has been around for a long time.

91 percent of Latinos are likely to acquire a lot of information before buying a product.

Source: Center for Media Research

Ethnic Population

The working-age population is projected to comprise more than 50 percent minorities in 2039 and 55 percent in 2050—up from 34 percent in 2008.

By 2050, the working-age population is projected to be:

30 percent Latino (up from 15 percent);
15 percent African American
(up from 13 percent); and
9.6 percent Asian
(up from 5.3 percent).

In 2050, the nation’s population of children is expected to be:
62 percent minority—up from 44 percent in 2008.

Source: U.S Census Bureau

Ethnic Buying Power

African American buying power is projected to top 
$1.1 trillion 
by 2012.

Asian American buying power is forecast to rise to 
$670 billion 
by 2012.

Latino buying power is projected to grow to 
$12 trillion 
by 2012.

Source: Selig Center for Economic Growth at the University of Georgia’s Terry College of Business.

Mastering the market
Because diversity marketing is so vast in its scope, some businesses may feel intimidated at first about exploring the market for fear of making a misstep. “Definitely an educational process has to happen,” says Slodowicz. “It’s not a one-size-fits-all solution.” One way to do this, she says, is to partner with the right people who understand the target market and who can help you fill in the knowledge gap, “because the market can be fragmented and complicated.” Here are other important steps to consider as you develop your marketing strategy.

Get to know the consumer

“This customer wants to be reached on a more personalized level,” says Radilla. 
Using consumer insights is the best way, experts say, of knowing whether your product or service makes sense for your target market. “Businesses have to roll up their sleeves and get out there, contact the centers of influence in their target communities, and find out if a market for your business truly exists in these communities,” advises Vilma 
Salaverria, vice president of multicultural marketing for Aflac in Columbus, Georgia. Relationship-building, she says, is key. “You may land a new customer immediately, but there may be some 
distrust in the beginning,” she explains. “A customer has to see that you care about the community.”

One way you can demonstrate your commitment, Salaverria says, is to focus on community relationships. “Sponsor a soccer team or health fair for women,” she says. “Join the local Hispanic Chamber of Commerce.” Grassroots tactics like these particularly make sense in an economy like this, says Radilla. “Never underestimate the value of community efforts such as working with schools or community groups,” she emphasizes. “That kind of PR and philanthropic 
effort can go far.”

Don’t play into stereotypes. “You don’t want to market to the myth,” says Franklin of SMG Multicultural. “You want to understand and see what the culture already knows about itself. At Starcom, we come from an inside-out approach, looking at motivations and behaviors first.” That’s where sensitivity comes into play, says Skriloff of Multicultural Marketing Resources. “One of the mistakes I’ve seen is an advertiser not looking at what is important to a particular group, such as how a family is portrayed on a commercial,” she says. “You don’t want to offend.” Hiring a team that specializes in marketing to 
diverse communities can help ensure that your outreach is effective and on point. “You have to know the market and not get overwhelmed by it,” Franklin says. “This will, in turn, drive innovation, connection, and engagement with the audience.”

Make sure your structure can support the outreach. This may mean adding certain accommodations, such as bilingual assistance on toll free customer service lines or bilingual signage in stores, Skriloff says. You’ve also got to make sure that the product you are pitching is appropriate for that market. “If you’re working with packaged goods, for example, you might want to make sure the product has instructions that are in Spanish as well as English,” says Slodowicz of 42Degrees. “Or maybe it’s a matter of taste—the flavor has to be appealing to the market. There’s a lot of trial and error involved.”

Look to businesses that are getting it right as role models
Companies such as Proctor and Gamble, Walt Disney, Coca-Cola, Dell, and General Motors have all been cited as businesses that have successful diversity marketing strategies. Proctor and Gamble, says Slodowicz, is known for investing in education in diverse communities. “You don’t have to make a big investment to see a big impact,” she says. And don’t expect to see results overnight. “It may take some time,” says Radilla. “But the return on investment is greater in the long run because brand loyalty tends to be greater.”

Making the investment
With many marketing budgets already spread thin by the current economic climate, some businesses may choose to use their general marketing strategy as a way of also reaching diverse markets. They do this at their peril, says Radilla. “General branding is not as cost-efficient now,” she says. “The amount of coverage you can get with a smaller budget, directed to a specific market, is substantial. You can get a bigger bang for your buck, and you can own that market.” She advises redirecting some of those general marketing dollars into local radio or newspapers, and, when you do, to make sure that whatever content you are using is appropriately done.

By taking your time to create a targeted message that speaks to a particular community, you demonstrate your commitment, and the community responds in kind. “If we promote our brands in a culturally relevant way, and give great customer service, we will make the customer happy,” Salaverria says. “A customer who is happy will stay.” DW

Vanessa K. Bush is a freelance writer and blogger who contributes to a number of publications. She and her family reside in New Jersey.

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