Understanding The Hispanic Market August, 2004 Agenda U.S. Hispanic Facts and Figures Assimilation vs. Acculturation Geography Language Preferences Hispanic Segments Characteristics and Core Values Marketing Implications Hispanic Population & Media Usage TMN Markets 2 Hispanics in the U.S. The Hispanic population grew by 13 million between 1990 and 2000, to a total of 35.3 million. Hispanics have now overtaken the AfricanAmerican population as the largest minority group with 35.3 million Hispanics in the U.S. Hispanic Percentage of U.S. Population The Median age of Hispanics is 28 vs. 37 for non-Hispanics. 25% 92 percent of Hispanics live in metropolitan areas, compared to 77 percent of white non-Hispanics. 50 percent of all Latino households have household incomes of $28,300 or more. Source: 2000 U.S. Census Strategy Research Corporation, 2002 20% 13% 2002 2030 2050 3 U.S. Hispanic Facts and Figures Assimilation vs. Acculturation Geography Language Preferences Hispanic Segments Characteristics and Core Values Marketing Implications Hispanic Population & Media Usage TMN Markets Definitions Assimilation: 1. the cultural absorption of a minority group into the main cultural body Acculturation: 1. Cultural modification of an individual, group, or people by adapting to or borrowing traits from another culture; also: a merging of cultures as a result of prolonged contact 2. The process by which a human being acquires the culture of a particular society from infancy. 5 No Need To Assimilate Constant influx of new immigrants Spanish media meets wide range news/entertainment needs Keeping “in touch” is easy and inexpensive Geographically close to home countries Tolerance to cultural differences has increased in the U.S. 6 Hispanic “Generational” Segments Will Continue to Grow in the Coming Decades 70 Millions 60 50 40 2nd+ Generation 1st Generation Foreign Born 30 20 10 0 1995 Source: 2000 2005 The Urban Institute, Washington DC, 1998, in Valdes, I., Marketing to American Latinos, 2000 2010 2015 2020 2025 7 Acculturation Segments YEAR 2002 66% 9% Highly Acculturated Partially Acculturated Unacculturated 47% YEAR 1994 25% 19% 34% 8 Source: Strategic Research Corporation - 1994 & 2002 U.S. Hispanic Market “Retroacculturation” “Do you consider yourself Hispanic or American?” Hispanic First 70% American First 11% Equally 19% 9 Source: Strategic Research Corporation - 2002 U.S. Hispanic Market Hispanic “Acculturation” Diversity Will Continue to Grow As Well U.S. born First, second, third generation Brand, category “mature” Marketing savvy Foreign-born Source: Recent arrivals vs Long-term Brand heritage/ lack thereof Advertising, information “hungry” Valdes, I., Marketing to American Latinos, 2000 © 2002 Santiago & Valdés Solutions 10 U.S. Hispanic Facts and Figures Assimilation vs. Acculturation Geography Language Preferences Hispanic Segments Characteristics and Core Values Marketing Implications Hispanic Population & Media Usage TMN Markets Before the 2000 Census HISPANICS WERE ALREADY THE LARGEST MINORITY IN THESE STATES 12 Source: Census Bureau, 2000; USA Today After the 2000 Census HISPANICS BECAME LARGEST MINORITY IN SEVEN MORE STATES 13 Source: Census Bureau, 2000; USA Today And in the 2010 Census HISPANICS WILL BE THE LARGEST MINORITY IN THESE STATES 14 Source: Census Bureau, 2000; USA Today 85% of Hispanics Live In Ten States 15 Source: Census Bureau, 2000; USA Today In the Top 10 Hispanic States, 46% Live in TMN Markets 16 Source: Census Bureau, 2000; USA Today U.S. Hispanic Facts and Figures Assimilation vs. Acculturation Geography Language Preferences Hispanic Segments Characteristics and Core Values Marketing Implications Hispanic Population & Media Usage TMN Markets Language Frequently Spoken at Home English Bilingual Spanish 16% 10% 74% 18 Source: Strategy Research Corporation, 2002 Language Most Comfortable Speaking 21% Spanish Bilingual English 15% 64% 19 Strategy Research Corporation, 2002 Language Most Comfortable Speaking 6% 1% 26% 53% 17% 92% 19% English Bilingual Spanish 57% 28% Highly Acculturated Partially Acculturated Unacculturated 20 Source: Strategy Research Corporation, 2002 Language Most Comfortable Speaking 5% 11% 63% 84% English Bilingual Spanish 22% 15% U.S. Born Foreign-Born 21 Source: Strategy Research Corporation, 2002 The Importance of Advertising in Spanish 71% “I get more information about a product when it’s advertised in Spanish” 62% 69% 65% 64% 60% “I am more inclined to purchase brands advertised in Spanish” 60% 58% 1994 1997 2000 2002 22 Source: Yankelovitch Hispanic Monitor, 2002 Adult Language Preferences in Advertising Spanish is the preferred advertising language for the majority of Hispanic parents and grandparents Heavily influencing under 18 segment TOTAL Latino Adults Young Adults (18–24) Bebes, Niños Parents (25–34) Tweens, Teens Parents (35–49) Bebes, Tweens, Teens Grand Parents (50–64) ENGLISH 30 % 44 % 26 % 29 % 26 % SPANISH 55 % 13 % 46 % 10 % 58 % 16 % 57 % 13 % 62 % 13 % BOTH 23 Source: Strategy Research Corporation 2002 U.S. Hispanic Facts and Figures Assimilation vs. Acculturation Geography Language Preferences Hispanic Segments Characteristics and Core Values Marketing Implications Hispanic Population & Media Usage TMN Markets Age Cohorts Are Large Enough for Focused Sub-targeting Opportunities 19% LOS BEBES Y LOS NIÑOS 1 in 5 19% 16% 14% 13% Gen Ñ 1 in 5 10% “New” LATINAS/ LATINOS 1 in 3 8% LATIN BOOMERS 1 in 5 LOS GRANDES 1 in 10 HISPANIC POPULATION BY AGE BREAK 25 Population by Age Group (%) Over a third (35%) of all U.S. Hispanics are younger than 18 years of age vs. 26% of the overall population 20% Hispanics 15% NonHispanics 10% 5% 0% <6 6-12 13-17 18-24 25-34 35-44 45-54 55-64 65-74 75-84 85 + 26 Source: 2000 U.S. Census Los Bebés - A Latino Baby Boom Age 0–6 Presently, more than one in five (20%) of all babies born in the U.S. will be born to a Hispanic Mom 60% in Los Angeles, 30% in New York, 40% in Miami, 82% in El Paso, 67% in San Antonio, 22% in Chicago …. This presents unique challenges and opportunities 27 Source: Valdés, I. Marketing to American Latinos, PMP, 2000 Los Bebés y los Niños Most being raised Bilingual and Bicultural Age 6–12 7 million in 2002 Will grow over 25% by 2010, faster than any other group Live mostly in bilingual households, fewer in English-dominant households Have more in common with American youth Experience a society where it’s “OK” to be different 28 Source: Valdés, I. Marketing to American Latinos, PMP, 2000 Generation Ñ Culture “Best of Both Worlds” Tweens 10–14 Teens, 15–19 Bilingual and Bicultural Have more in common with American Teens Proud to be “Latino” Hip and consumption-oriented Source: Valdés, I. Marketing to American Latinos, PMP, 2000 © 2002 Santiago & Valdés Solutions 29 Hispanic Youth (Age 0–19) “Generational” Segments 100% 14% born outside the U.S. 90% 33% 80% 54% first U.S. born generation to at least one immigrant Hispanic Parent 70% US Born 2nd Gen US Born 1st Gen Foreign Born 60% 50% 40% 54% 30% 20% 10% 14% 0% 30 Source: Strategic Research Corporation, 2002 Hispanic Youth Purchase Power $$ Hispanic Teens account for about $20 billion of the $140 billion teen market purchases Spending their allowance and own earned money Allowance money received by Hispanic Youth Tweens $13/wk $2.4 Billion Niños $8.60/wk $3.6 Billion Total Hispanic Youth Direct Purchase Power = $26 Billion Spend their money on music, entertainment, food & snacks 31 Sources: Nielsen Media Research, Visa’s Annual Back To School Survey The “New” Latina/Latino Bilingual and Bicultural (47% are foreign born) Age 18 – 39 Fastest growing among first-time employed persons (women more so) Increasingly in managerial positions (women more so) 32 Source: I.Valdes, “Marketing to American Latinos”, PMP, 2000 The “New” Latina Fastest growing small business owners in the U.S. Good spenders More “banked” than previous generation Modern, yet many times caught between old/new ways of life 33 Source: 2002 Santiago & Valdés Solutions Latino Boomers: “Sandwich” Generation! The Latino Boomers segment has over 7 million Hispanics between the ages of 40 and 59, or every 1 in 6 Hispanics. They are a “Sandwich Generation” between the old and the new Latino culture (60% are foreign-born) 34 Source: I.Valdes, “Marketing to American Latinos”, PMP, 2000 Latino Boomers: “Sandwich” Generation! “Foreign-borns” have resided about half their adult life in the U.S. … becoming U.S. citizens Slowly acculturating, motivated by children and labor opportunities But a large segment of Latino Boomers is still traditional Many more fully bilingual but not necessarily “bi-cultural” Many are young grandparents Most have credit cards and are “banked” Many own brand new cars; more own homes than ever before (selected markets) Almost universal ownership of durable goods (cameras, several TVs, microwave ovens, DVDs) 35 Source: I.Valdes, “Marketing to American Latinos”, PMP, 2000 Los Grandes: An Emerging Mature Market About 1 in 7 Hispanics or 6 million are 50+. Hispanics represent 7% of 50+ U.S. population. Hispanic 50+ population is expected to nearly triple by 2020, from 4.5 million in 1998 to 12.2 million. 36 Source: I.Valdes, “Marketing to American Latinos”, PMP, 2000 Los Grandes: An Emerging Mature Market “Learning the ropes” of being seniors in a very different culture (64% are foreign-born) Many live with their children or other family members Involved in “rearing” grandchildren Social activities center around the family 37 Source: I.Valdes, “Marketing to American Latinos”, (forthcoming, PMP, 2002) Los Grandes: An Emerging Mature Market Many prefer Spanish language Quality of life varies drastically based on socio-economic status Interested in insurance services, advocacy, voter registration, health and wellness, religion 38 Source: I.Valdes, “Marketing to American Latinos”, (PMP, 2002) U.S. Hispanic Facts and Figures Assimilation vs. Acculturation Geography Language Preferences Hispanic Segments Characteristics and Core Values Marketing Implications Hispanic Population & Media Usage TMN Markets Communicating with Latinos requires Deeper Knowledge than ever Growing Complexity of Target Market Fundamental changes in media structure Customization Fragmentation Technology Permission marketing One person at a time SRI U.S. Hispanic Boom Conference. June 10-11, 2004 40 Latinos continue to Love Being Latino Fundamental culturally based behaviors continue Deeper consumer knowledge is required to effectively communicate Advertisers need market experts SRI U.S. Hispanic Boom Conference. June 10-11, 2004 41 Latino Characteristics and Core Values Values Language Latinos speak Spanish with distinct national idioms Food Our Food is Us! Bonding Latino emotional mainstay Flavor Please! The cuisines differ slightly, but the requisite is the same Communal, interdependent orientation centered on “La Familia Unida” Legacy of human values, centered on loyalty, cooperation and helping one another Respect, particularly for those of a higher social status, their elders and the mother Hospitality –“Mi casa es tu casa” – in which food is key element Class Structure Religion Latinos naturally accept a social pecking order American egalitarianism can be unnerving, depending on their social status Predominantly Catholic Cultural Identification Latinos identify with their country of origin 42 Source: Project “Corazon” 2001 - Kraft proprietary study Differences in Values & Beliefs Non-Hispanic Hispanic Minimize differences Everybody is the same Stress differences Show respect What do we stress in relationships? Balance, Harmony, Competition, Informality Respect, Cooperation, Formality What do we value in people? A person's achievements through special skills A person's background On whom do we rely for help? Ourselves and institutions Family, friends, community, "our social security" How do we relate to people? Source: Cultural Access Group SRI U.S. Hispanic Boom Conference. June 10-11, 2004 43 Four Imperatives of Latino Culture Familismo (Family) Family Unity continues to be Imperative Machismo Marianismo Chicoismo (Man’s role) (Woman’s role) (Children’s role) Leads Provides Keeps family together Family legacy Acculturation: Acculturation: Acculturation: • Surrender some power over the household • Awaken to the self • Gain more freedom • Gain more freedom • Become self-reliant 44 Source: Marketing to American Latinos, Isabel Valdes 1999 U.S. Hispanic Facts and Figures Assimilation vs. Acculturation Geography Language Preferences Hispanic Segments Characteristics and Core Values Marketing Implications Hispanic Population Marketing Implications: Be Flexible; Communicate Differently Consider re-positioning, re-labeling, re-introducing product for greater ROI Highlight new products Assume many existing products are new to a large percentage of adult Hispanics “Show Me” vs “Tell Me” Provide practical advice To gain “Share of Pocket” First gain “Share of Mind” (Awareness/Familiarity/Trust) But more importantly, “Share of Heart” (emotional & cultural Hot Buttons) To “Gain Share of Heart” Leverage distinct value orientation vs anglos, impacting communications 46 U.S. Hispanic Facts and Figures Assimilation vs. Acculturation Geography Language Preferences Hispanic Segments Characteristics and Core Values Marketing Implications Hispanic Population & Media Usage TMN Markets Hispanic Population Have Larger Households Average Persons Per Household (Top 5 Most Populous Hispanic Markets) 3.9 3.7 3.7 3.3 2.8 Chicago Los Angeles Houston New York Miami 48 Source: 2002 Strategy Research Corporation. Hispanics Have an Increasing Economic Impact on the U.S. Hispanic Buying Power: $428 Billion Total Hispanic Retail Sales: $240 Billion Mean Household Income: $45,701 Source: 2002 Strategy Research Corporation; 49 Hispanic Diversity of the Total U.S. and TMN Markets Puerto Rico 8% Other 25% Puerto Rico 11% Mexico 75% Other 10% Other 14% Mexico 66% Columbia 12% Mexico 4% Puerto Rico 9% Guatemala 2% Guatemala 4% Cuba 45% El Salvador 5% Cuba 5% Chicago Market (1,603,761 people) Honduras 5% Miami Market Total U.S. Market (1,719,474 people) (38,628,652 people) Puerto Rico 1% Ecuador 12% Other 22% Other 29% Other 12% Colombia 10% Guatemala 3% Mexico 75% El Salvador 9% Dominican Rep 13% Puerto Rico 34% L.A. Market (7,000,800 people) Source: Mexico 14% 2002 Strategy Research Corporation. N.Y. Market (3,971,345 people) Mexico 9% Puerto Rico 50% Orlando Market (383,540 people) Cuba 7% Acculturation Levels Into U.S. Culture By Market Chicago 71% Acculturation by DMA 64% 68% 66% Los Angeles New York (% of adults) Miami 32% 20% 9% 5% 9% 24% 29% 5% Highly Acculturated Partially Acculturated Unacculturated 51 Source: 2002 Strategy Research Corporation. U.S. Hispanic Facts and Figures Assimilation vs. Acculturation Geography Language Preferences Hispanic Segments Characteristics and Core Values Marketing Implications Hispanic Population & Media Usage The Changing Face of Los Angeles Nationally, L.A. is the largest Hispanic market with 4 out of every 10 of the Los Angeles population being of Hispanic descent % Increase in Los Angeles Population 156% (1980 – 2002) 54% L.A.’s Hispanic Population 2002 7,000,818 Total Adults Hispanic Adults 53 Source: 2002 Strategy Research Corporation.