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Archive for the ‘Buying power’ Category

Are You Shifting Marketing and PR Plans Based on Hispanic Demographic Trends?

Posted originally on May 26th, 2010, by BurrellesLuce Insider

by Colleen Flood*

Hola, como estan todos?  Es un placer de estar aqui. Estan todos disfrutando la conferencia?

This is similiar to how David Henry, founder and president of Telenoticias and co-author of Hispanic Marketing and Public Relations: Understanding and Targeting America’s Largest Minority, started the session “A Sleeping Giant” at the PRSA Counselors Academy Conference, which BurrellesLuce sponsored, this past weekend. Henry switched back to communicating in English and asked if we understood what he had just said. Only one or two hands went up in the group. He then related this to what Hispanics understand when they are marketed to in English.

The current marketplace in the U.S. is comprised of a diverse group. There has been boom over the past few years and by 2050, it is estimated that 30 percent of the population will be Hispanic. This is a population with a purchasing power that is progressing 50 percent faster than non-Hispanic groups. (In fact, BurrellesLuce first began writing about these trends in a 2007 newsletter entitled, “Top Five Tips for Reaching the Growing Hispanic Market.”)

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The Power Of Family Ties In The Hispanic Market

Most young Americans look to leave their parents’ house as soon as they graduate from college or get their first full-time job.  The traditional logic is that it’s time they set out on their “own path”.

However, in Latin America, it’s both common and perfectly respectable for young adults to live with their family until marriage.  This tradition of living at home has followed Latinos to the States.  It is not uncommon to find Hispanic children living at home until they get married.

The family plays a bigger role among Latinos than it does for many Americans.  In America, a family’s influence is often seen at being odds with one’s individualism, but for Latinos, family ties are often an important part of shaping one’s own identity.  Family is a resource, not a crutch.   Hispanics tend to have stronger family connections, especially to extended family.  These connections influence their consumer behavior, and companies that recognize that can find greater success in the Hispanic market.

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Hispanic 101 (Part 6): The Hispanic Affluent Class

Along with the nation’s many blue-collar Hispanics, there’s a significant number of affluent Hispanics in the U.S.

The Census Bureau defines affluent households as those with a median annual income of $100,000 or more.  As of 2006, there were more than 1.3 million affluent Hispanic households in the U.S., about 10 percent of all Hispanic households in the country.  The affluent class makes up about 3.7 million people nationwide, with a purchasing power over $1 trillion.

Hispanics are outpacing the general population when it comes to the growth of wealth.   Between 1991 and 2000, the number of affluent Hispanic households grew 126%, while the number of affluent households in the general population only grew 77%.

Hispanics control more personal disposable income than any other minority group in the United States.  The Selig Center of the University of Georgia estimated Hispanic buying power at $951 billion in 2008, a 349 percent growth from 1990.  During that time, non-Hispanic buying power had grown at less than half that rate.

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Hispanics’ Personal Finances And The Recession

When it comes to personal finance, the Hispanic population has some unique characteristics which have distinguished their experience of the recession from that of other groups.

Overall, Hispanics are less connected to banks and credit cards than the general population.  Thus, they haven’t been as affected in losses to their 401(k)s and investments, nor have they incurred as much credit card debt.  However, the other side of being disconnected from banks is that Hispanics typically have less money saved for retirement, which has many elderly Hispanics anxious about their future.

A study by Synovate found that only 77% of Hispanics have bank accounts, compared to 98% of the general population.  One theory is that Hispanics use banks less because they don’t trust them as much as the rest of the population.   Many Hispanic immigrants come from countries where banks were unstable due to fluctuating economies, and that history leads them to rely on cash.

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U.S. Superstores Creating Hispanic Specialty Chains

Superstores are making headlines this month for breaking new ground in the Hispanic market during the recession.  Supermarkets Wal-Mart and Sam’s Club are both planning to open new Hispanic specialty superstores.

Wal-Mart opened its first “Supermercado De Wal-Mart” in Houston in April on a trial run; another is on the way in Phoenix in August. Sam’s Club will officially open its first Hispanic superstore “Más Club” in Houston, also in August.

So why change the old model?  For Wal-Mart, it was a question of seeing the approach that worked best with Hispanics abroad.  VP of Business Development Jose Antonio Fernandez said stores in Latin America and Mexico have taught them Hispanic customers’ expectations.   “It was just a matter of time for us to start connecting the dots, and say, ‘OK, so this is happening in Mexico, and this is happening in the U.S. How can we leverage both of our companies and offer shopping that is going to be better for these customers?”

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Hispanic Brand Loyalty: Facts and Theories

It’s sometimes said that Hispanic consumers are more brand loyal.

One often-cited source is Nielsen HomeScan’s study of Hispanic shopping behavior.  Nielsen found that 70 percent of Spanish language-preferred Hispanic homes chose one cola consistently to the exclusion of others: in English-language only or English-preferred homes, that figure dropped to just 33 percent.  That wide gap continued across purchases for many other food items and household goods, from cereal and beer, to detergents and toothpaste.

Why the difference? Researchers have put out a few theories: Hispanics may come here having had bad experiences in their home country with products.   If they then come here and find something of higher quality, they stick with it, because it’s comparatively better than what they had before.  Then there’s the corollary to that: good experiences with a product from home could lead to loyalty here, because it reminds them of home.

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Hispanic Market 101 (Part 1)

Anyone who works in multicultural public relations can tell you that translating a company message for the Hispanic audience takes more than just an English-Spanish dictionary.  Marketers should know the demographic well, its size, diversity, and potential.  The best work is done by those who go beyond stereotypes and create culturally savvy campaigns.

With that in mind, here is the first in a series of posts that we’re calling “Hispanic Market 101,” with key information for anyone considering outreach to Latino consumers.  Within these posts, we will also try to clarify why it’s important to invest in the Hispanic segment, even in the midst of a rough economy.

Size of the U.S. Hispanic Market

Hispanics make up approximately 15% of our population of our roughly 300 million residents. As of 2007, there were 45.5 million Hispanics; that doesn’t take into account undocumented residents, which have been estimated at anywhere form 5-10 million.  The Census Bureau compared population figures in 2000 and 2006, and found that Hispanics’ growth rate over those years was triple that of the overall U.S. population.

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