The Intra-Cultural New Mainstream

30 Apr 2009|Added Value

Q&A with Stephen Palacios, EVP and Hispanic Market Practice Lead, Cheskin Added Value
Originally published in AMA Marketing News, April 2009
Interview by Elisabeth A. Sullivan

Even as we see some signs of life returning to the U.S. economy, we’re well aware that we’re not yet out of the woods.  To find sales opportunities in the interim, many marketers are seeking out new markets, looking to expand their messages’ reach into previously untapped consumer segments.  Going global.
But before you reach across the oceans, consider tapping into the melting pot of cultures within U.S. borders.  Target new multicultural consumer segments and gather insight at home that you can later leverage abroad, says Stephen Palacios.
Palacios serves as executive vice president of the consumer goods business and leads the multicultural practice at Redwood Shores, Calif.-based consultancy Cheskin Added Value, a WPP company.  He works with clients such as Mercedes Benz USA, Nike and Sara Lee Corp. to help determine how to leverage existing brands or create new brands, and how to define and service markets more effectively.  Marketing News recently caught up with Palacios to discuss how U.S.-based marketers can seek out new markets here at home through multicultural marketing.

Q:  Let’s set the stage.  Many companies still seem to consider multicultural marketing as a niche practice, rather than an integral part of their overall marketing strategy.  How long will it be before multicultural marketing goes mainstream?

A:  I think that that day is sooner than people think, quite honestly.  I think it’s within certainly a 10-year period of time, and for some a five-year period of time…
I was just talking to a client and we’ve completed a year-long study analyzing the evolution of what we call niche markets – in this case, African-American and Hispanic markets – and then what I’m calling the intercultural new mainstream, which is the notion that what was once called the general market or the mainstream market has taken on a variety of characteristics that have racial and ethnic components associated with it that are now, kind of, reaching the tipping point.  So if you have a so-called general market strategy that doesn’t actively reflect that [diverse, multicultural] dynamic, my assertion is that you are being less relevant to your customers…
Never before has there been such an overt social and economic incentive to understand, appreciate and become conversant in other cultures as there is today for an American.  Part of it is driven by technology, part of it is driven by the demographics of the United States and part of it is driven by globalization.

Q:  In other words, we’re evolving as a marketplace to be inherently more diverse and multiracial, and marketers better keep up with appropriate messaging.  But how about directly targeting certain cultures or ethnicities in a segmented way?  How can marketers figure out whether they should pursue U.S.-based multicultural markets more strenuously?  Does it just come down to customer research?

A:  If I were a client asking the question that you just posed, I would be pleased with the current state of information that is available to me to help me make a couple cuts around whether this is a viable strategy or not.
In the last 10 years, as multicultural markets – particularly the Hispanic market, but also the African-American market – have grown and evolved at a pace that outpaces most other consumer markets in the United States, the concurrent reaction of the marketplace is to shine a light on [those multicultural markets] more intensely.  And therefore, there’s more information available.  There’s more syndicated information available; there’s less-expansive proprietary research available; there are more case studies that are available; [and] there are more retailers who have an understanding and a competency in executing against these markets than there certainly were five years ago, and infinitely more than there were 10 years ago.
What is available to some company today that wasn’t available then is the ability to take a less expensive view of what the opportunity might look like at at very high level, and if promising, then of course you have to delve more deeply to say, ‘Relatively speaking – relative to my competition, relative to my price points, relative to my distribution – how much more [business] is available to me by concentrating my efforts against multicultural markets than otherwise might not be?’

Q:  What’s the power of these markets within our borders?  Why should marketers look here first, rather than turning to other markets in the global marketplace?

A:  Well, I think that’s relative to what you sell and what you offer.  And also, I think it’s relevant to your core competencies.  If you have no international operation [yet], then creating the cultural competency in the United States is an excellent starting point [for going global] because you have to learn how to understand cultural distinctions.  You need to, in some instances, learn linguistic competency [and] you have to understand cultural behaviors that relate to the purchase or use of products.
I can tell you story after story of how clients of mine have [for example] been amazed at how hot dogs are used for breakfast, versus lunch or dinner, by Hispanics.  ‘Well, hmmm, if that’s the case, there’s an entirely different occasion usage than our general market category and we might have to communicate that or sell that, or create a product that facilitates that usage in a way that’s distinct from what we normally would do.’ …
When you build those competencies around [factors such as]: How is the product or service used?  When is it used?  By whom?  Who is the decision-maker?  Is it the child or the parent?  What kind of language do I need to communicate in?  What’s the best platform to make that communication?  And then what’s the best way to get the product in the hands of that consumer?  Building all those competencies domestically first, I think, is a lower-cost, lower-risk proposition than trying to figure that out internationally.

Q:  And then once the economy rebounds, the premise is that you could take those U.S.-based multicultural experiences and insights and use them as a starting point for international expansion?

A:  There are many examples of clients of mine who have started serving the U.S. Hispanic market and then have evolved into, say, a Mexico-based business.  Marketing [to Mexican citizens versus marketing to U.S.-based Hispanics] differs dramatically, but having said that, it’s more of an adaptation than a new build.  Once you have the infrastructure, once you build the knowledge base, once you’ve gone into the brave, new world that you didn’t understand before and you’ve found your way, doing that the second time is all that easier.

 

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