P-O-P Goes Multicultural

Explosive growth of Hispanics leads wave of bilingual and ethnic displays

For more than three decades, product companies and retailers have made periodic forays in marketing in-store to particular ethnic groups such as Hispanics, blacks and Asians. But during the past several years -- fueled chiefly by the unexpectedly high growth of the Hispanic population during the 1990s -- ethnic marketing has gone from niche tactic to central strategy for a growing number of marketers.

The 2000 Census has been the primary statistical driver of this trend along with marketers' own internal research. The Census showed explosive growth in the Hispanic population, up 57.9% to 35.3 million since 1990; somewhat slower but still significant growth among blacks, up 16.2% to 33.9 million; and rapid growth from a smaller base for Asians, up 52.4% to 10.1 million.

"Companies have been doing ethnic marketing for well over 30 years. Companies such as Anheuser-Busch and Coca-Cola recognized early on that population shifts warranted marketing shifts," says Liz Arreaga, partner at consulting firm Mercury Mambo, Austin, TX. "Minority marketing, as it was once called, was primarily African-American. Companies recognized this consumer segment at different stages."

But in recent years, Arreaga says, this recognition has swept the marketing landscape. "We see that this trend is growing at an unbelievable rate, mainly because of what the Census brought out: the importance of the Hispanic market," she says. "Ethnic P-O-P is becoming more important than ever. Not only are marketers aware of the need for culturally relevant P-O-S, but the retailers today are demanding it."

Gary Berman, CEO of Miami-based Market Segment Research, surveyed 87 companies in partnership with the National Association of Advertisers and found four basic groupings: 15% still checking out the concept of multicultural marketing, 35% in some form of trial-and-error, 30% that had dedicated time and resources for a long time and were "almost there," and 20% that were "getting it right."

"The average multicultural marketer, if there is such a thing, has been in the market approximately five to seven years," Berman says. "They have staffed internally. They have allocated budgets toward the effort. It's part of the strategic plan of the organization and is generally viewed as an important long-term initiative."

Jeff Symon, president of Alternative and Innovative Marketing, Escondido, CA, has seen similar movement. "There've been companies like Coca- Cola, companies like McDonald's, who have been in this market for a long time -- 10, 15, 20 years," he says. "What we're starting to see now, after the 2000 Census, is interest from other companies." Industries like pharmaceuticals are noticeably more engaged, he adds.

Valerie Isozaki, account director for Vertical Marketing Network, Tustin, CA, says she has seen movement toward more multicultural marketing in the past three or four years, particularly among food companies and banks. "People are definitely talking more and more about ethnic marketing as a way to grow their brands," she says. "Hispanic marketing has seemed to become a very big hot button for marketers in general. There's always been that talk, but I'm hearing it more and more."

Plano, Texas-based Cadbury Schweppes Americas Beverages repositioned its tomato-based juice drink Clamato in 2000 to target Hispanics and has seen a 50% growth in volume since then, says Omar Garcia, director of Hispanic marketing.

"We have been targeting all of these groups for a long time," he says. "We started on Clamato prior to the 2000 Census being published. That's when the number was much, much higher than we all expected. That was a wake-up call for many companies."

Cadbury Schweppes' program for Clamato centers around four promotions per year, such as a joint Cinco de Mayo promotion with Tecate beer, that feature bilingual point-of-sale materials, primarily consisting of case cards but also including danglers and banners, Garcia says. The company has a group of nine field-marketing managers who concentrate on Hispanic retail marketing, primarily for Clamato but with some attention paid to other brands like Dr Pepper and Sunkist, he says.

Goldwell Cosmetics USA, Linthicum Heights, MD, which sells professional hair care products exclusively to salons, does not have lines that specifically target one ethnic group but has developed multicultural marketing materials that include bilingual brochures and sales material, says Laura Holmes, communications manager.

"In a market like this, if you ignore those market segments, you'd be missing out on a lot of the consumer base. We need to make sure our products work on all different types of hair," she says. "We address that visually through techniques and poster sets and that sort of thing. It would be terrible if we wanted to address all those hair types and only showed pictures of white, blond girls. We incorporate Latino, Asian, African-American, male, female, light-skinned, dark-skinned."

Other companies say they've felt less of a need to target their marketing materials to particular ethnic groups. "My short answer is: very little," says John Faulkner, spokesman for Campbell Soup, which has used bilingual packaging for its Kitchen Classics soups and the V-8 Splash fruit juice line. "We've got product that's consumed across all cultures. It hasn't been determined that we need to fine-tune our message for an African-American market vs. a Hispanic market vs. an Asian market."

Universal Studios Home Video, Universal City, CA, produced bilingual P-O-P materials for urban Wal-Mart stores for its Feb. 15 release of Motorcycle Diaries, translating the critical acclaim into Spanish and highlighting star Gael Garcia Bernal and the movie's main character, revolutionary leader "Che" Guevara. But "that's probably as far as we've gone" into ethnic in-store marketing, says Elizabeth Bishop, director of creative services. "We're just starting to take some baby steps into that field."

It's not always product companies that first recognize the need for multicultural in-store marketing, however. The requests often come from retailers, perhaps because they see their customers more first-hand than do manufacturers.

Lowe's Home Improvement may have set a new standard last fall when it implemented a mandatory bilingual policy for packaging and P-O-P programs, which will take effect in September. It allows existing materials to stay up but only until October 2006. The strategy will be implemented across all categories in the chain's 1,000-plus stores, starting in "high Spanish-speaking markets," says spokesperson Chris Ahearn.

"With the growing Hispanic population, we feel we need to provide translation and make it an easy and welcome environment for them to shop," Ahearn says. "Certainly the data we see from the government as well as our own research does build our awareness. In our advertising, both in-store and otherwise, we have tried to reflect our diverse customer base."

Arreaga of Mercury Mambo cites Albertsons, Target and The Home Depot as other retailers that have "made concerted efforts to make their stores more 'ethnic friendly,' from customized store signage to product selection and placement," she says. "Nobody knows the customer better than the retailer, and as neighborhoods change, customer bases change, and retailers know they must deliver a positive customer experience. P-O-P, promotions and signage are all part of creating that customer experience. They have been ramping up their knowledge and becoming more aware of what their need is."

Berman says such moves by retailers have accompanied a broader shift in their self-image. "For the longest time, retailers were really not marketers, they were stopping points for goods shipped by manufacturers," he says. "And then, of course, they started to realize, along with the manufacturers, that, 'Gosh, we need to listen to the consumers and ideally place them first.' " Retailers undertook research using Census data to see who lived in their service areas, he says, and "they started realizing that there's this series of demographic shifts occurring right around them."

Sears, for whom Berman has consulted, has many stores in multicultural markets and has been targeting ethnic consumers for more than a decade, he says, through bilingual signage, multi-lingual customer credit applications and staffing. For a long time, Sears had a multicultural marketing department but recently shifted that responsibility to product managers, Berman says.

"That was an important development," he says. "On the one hand, you could say, somehow are they diminishing the importance of multicultural marketing because they disbanded this effort? Or you could say, it's so important that it's part of the core business strategy at Sears. I happen to think that's the case."

Many clients of Alternative and Innovative Marketing say sales people are coming back with requests from retailers for Hispanic- or African-American-oriented programs, Symon says. "A lot of retailers have been real aggressive in asking," he says.

For example, as Delray Farms builds 70,000-square-foot bodega-style groceries that appeal to Hispanics in Texas and southern California through their merchandising mix and piped-in music selections, "The major chains are asking their manufacturers, 'What are you doing to grow your Hispanic market and to help us grow ours?' " he says.

Product companies say they're hearing the same things. "The retailers themselves had been a little bit ahead of us in going after this market," says Kevin Clayton, corporate vice president of diversity for Russell Corp., Atlanta.

Beauty salons "absolutely" want multicultural material, says Holmes of Goldwell Cosmetics. "The request came from that direction, from the field, back to us," she says, "that they have clientele of all these different types, and they need to address all of those if they're going to have P-O-P or posters within their salons."

In rolling out its campaign for Clamato, Cadbury Schweppes encountered a wide spectrum of responses, Garcia says. "Different retailers are at different levels," he says. "Hispanic independents, that's what they do for a living. They're completely on board. Other retailers, they realize there's a big opportunity, and they're testing different things. We are working closely with them on making the highest potential impact."

Hispanics are Dominant Focus

Amidst ethnic marketing, campaigns targeted toward Hispanics are the dominant focus of in-store marketers these days, due to not only the Census figures but also the combination of linguistic and cultural needs -- both bilingual packaging and signage as well as imagery that reflects Hispanic heritage. Blacks share certain cultural touchstones but present no need for bilingual text, while Asians speak multiple languages, and little common culture exists among peoples that range from the Middle East to Japan.

"Many major marketers have the view that African-Americans are monolithic and are effectively reached and marketed to through mainstream efforts," Berman says. "We believe that while there are many commonalities, there are significant social and economic, and geographic differences that make understanding the African-American community on a deeper level worthwhile.

"With Hispanics, it's been much easier for companies to intellectualize the need for targeted marketing efforts because there's this view that there's this preponderance of speaking another language," he says. "There really is no such thing as an 'Asian,' and so as a consequence, there are so many subgroups," but he has seen some added interest.

Symon says Alternative and Innovative Marketing has seen the most growth from the Hispanic market, citing cities like Los Angeles, Houston, Miami, Chicago and New York. "Part of that, as it relates to in-store, retail, point-of-purchase, is the fact that there's a real difference in language barriers," says Shelly Lipton, executive director of Alternative and Innovative Marketing. "In the African-American market, clearly there's cultural cues and certain community celebrations, but you don't have that language issue." Yet many companies haven't used bilingual P-O-P to target Hispanics, he adds. "They're not sensitized to it, or they haven't developed the strategy."

Statistics compiled by Information Resources Inc. (IRI), Chicago, show the top markets for bilingual Spanish marketing to be Houston, Los Angeles, Chicago and Miami. The combined buying power of the Hispanic market is $675 million, IRI figures show, with overall targeted advertising growth averaging 17% per year the past five years. The food category, particularly spicy flavors and fruity citrus drinks, has led the way.

Adrienne Pulido, consultant with the Texas firm Gut of a Mouse, says marketing to Hispanics has gone beyond targeted neighborhoods in established enclaves. "There's a lot of evidence in Hispanic growth across the board, in mature markets and emerging as well. In the Carolinas, Atlanta, across the southeast, there's been exponential growth," she says.

"Hispanic marketing isn't a niche anymore. It isn't a 'nice-to-do-to-get-your-numbers-up'. It's a 'have-to-do.' That used to be true in the urban centers; now it's true all over," Pulido says. "We're seeing a lot of merchandising programs tied into marketing that maybe we didn't see five years ago: 'You'll get this Hispanic program if you buy so many palettes of X product.' "

Brea, CA-based Ventura Foods has enjoyed success in the Hispanic market in Los Angeles with its Gold-n-Soft brand of margarine, says Isozaki of Vertical Marketing Network, which worked with Ventura on an integrated campaign. It spanned spots on Spanish-language television, outdoor advertising, and sponsorship through the L.A. Galaxy soccer team.

At the retail level, Galaxy players visited select stores to sign autographs, header cards provided the opportunity to win box-seat tickets to games, and Ventura produced table tents and branded aprons, plates and napkins for sampling programs with bilingual staff on hand. The P-O-P also included pallet displays, Isozaki says.

"What the brand saw was an amazing result," she says, with volume up 10% from 2003 to 2004 while the overall margarine category declined 7%. "We were able to build really strong relationships with retailers." For Ventura, "this is probably one of the first really big, integrated [campaigns], where the advertising works with the promotion works with the sponsorship."

Soccer formed the basis for an Hispanic-themed campaign Frito-Lay rolled out last year for its Tostitos Gold brand, which partnered with Univision on a promotion centered on the Copa America tournament, a championship among the U.S., Mexico and South American countries, says spokesman Jared Dougherty. Retail displays rolled out in eight states and featured a chance to win a trip to Peru to see the final game.

"We want our products to appeal to the diverse segments of our marketplace," Dougherty says. "Within our organization, there are employee affinity networks that are tapped into to develop everything from new flavors and packaging to advertising and promotions targeting diverse customers."

The black consumer might be less sizzling hot at the moment, but product companies remain interested in targeting that consumer base.

"Among our clients, they're more and more asking about programs toward the African-American market," Symon says. His colleague Lipton adds: "A lot of it is driven by the incidence or category development among these groups. In some cases, both Hispanics and African-Americans might have a high index of certain category uses."

For example, Lipton says, lactose intolerance is also high among Hispanics, he says. Among blacks, it is somewhat lower yet still higher than average.

Among companies targeting blacks is Russell Corp., maker of sportswear and equipment brands such as Russell Athletic, Spalding and Brooks. The company last summer signed three conferences' worth of historically black colleges and universities (HBCUs) to an exclusive apparel and equipment deal under which "dollars go back to the school for everything that is sold that bears the marks of the school" in campus bookstores, says Clayton.

"We identified through market research that we needed to significantly improve our market share within the African-American community and the Hispanic community," he says. "We saw this as a great opportunity because we realized there is a significant loyalty in the African-American community to the historically black colleges."

Russell hopes to add a fourth conference to the group, which would represent a total of 49 out of 103 HBCUs nationwide, Clayton says. In the three current conferences' schools, Russell has "a significant share" of offerings in the bookstores branded with a joint Russell/HBCU hang tag and is introducing a website, www.buyhbcu.com. A more full-fledged program for retailers beyond the campus bookstores will roll out later this year, Clayton says.

Frito-Lay targeted younger blacks and others who consider themselves members of the "hip-hop generation" by partnering with ESPN and the AND1 Mix Tape Tour, a traveling streetball and hip-hop music event that went to several cities, Dougherty says. Retail displays in Chicago, Atlanta, New York, Philadelphia and Washington drove consumers to the local events.

Published: May 2005

Source: In-Store Marketing Institute/P-O-P Times