Keys to Marketing to the Hispanic Population
New IRI study examines how to create a cultural connection
Published in CSP Daily News
CHICAGO -- By 2015, the U.S. Hispanic market's purchasing power will total $1.3 trillion.
Today, Hispanics account for one in six Americans, or 53 million people. Hispanic families consume more media and are more responsive to media than the general population, according to a new IRI report titled “Point of View: Winning with the Hispanic Consumer Today.”
Additionally, 70% of Hispanics are under age 40, making investment in this group a wise long-term proposition, the report states. Marketers have historically underserved Hispanic shoppers, but continuing to do so would be a mistake: IRI analysis shows that a $1 billion CPG (consumer packaged goods) company can earn an extra $71 million in revenue annually by investing more effectively in the Hispanic consumer.
"Hispanics are a powerful, growing group, and marketers who make special efforts to satisfy these consumers will certainly reap many rewards," said Joy Joseph, principal and practice leader, Global Analytics and Consulting, IRI. "Highly targeted, well-executed Hispanic campaigns grounded in a thorough understanding of the Hispanic shopper can directly stimulate revenue increases and market share growth. In fact, our analysis of 10 CPG product portfolios shows that more aggressive spending on Hispanic campaigns can yield outsized results."
IRI recommends that CPG companies start with a “total-market” strategy when approaching the Hispanic segment. There are many definitions of total market being discussed in the industry today, but Latinum Network, a multicultural research and strategy firm with more than 85 active Fortune 1,000 clients, defines a total-market company as having three key traits:
- Upstream Integrated Planning: Total-market companies make cultural segments a required input to strategic and financial plans well before a single campaign brief is written.
- Multiculturally Led Insights: Total-market companies make cultural consumers at least equal partners in the insights generation process, with oversampling of Hispanic, African-American and Asian segments, and look for transcending multicultural insights to drive to total-market ideas.
- Integrated Execution: Multicultural talent both inside and outside the total-market organization is given the opportunity to perform “traditional” work, and vice versa; the best talent and the best ideas win, from creative to media to distribution.
Given these key traits, it is perhaps not surprising that total-market companies spend more, not less, on multicultural segments—because these segments are made a part of the strategy from the outset.
Chicago-based IRI is a leader in delivering powerful market and shopper information, predictive analysis and the foresight that leads to action.