Multicultural
marketing has created a marketing economy based on segmenting the
population by ethnicity. While ethnicity segmentation has worked for
the past several decades, as I pointed out in an earlier column, that
foundation is starting to crack. Our industry is experiencing a
paradigm shift. As we attempt to make sense of this existential crisis
of marketing models, we should consider how we segment and why.
We
recently teamed up with the AHAA to
present a webinar taking a closer look at affluent Hispanics. Using
data we pulled from our most recent Consumer Sentiment study, we
isolated Hispanics earning 70K+ in Household Income per year. When we
compared that data to General Market data, we saw striking
similarities. This made me ask the question, should affluent Hispanics
be considered General Market?
Let’s
delve further into the data to find out.
We
asked a representative sample of Total Market, Hispanic,
African-American, Asian, and non-Hispanic Whites to think about the
U.S. economy in general and their feelings about where things are
heading in 2017. The below is a chart outlining respondents that
indicated that the economy in 2017 would be better than 2016:
Affluent
Hispanics are clearly more bullish on the economy than the Total Market
and Hispanics overall. However, looking at Affluent Hispanics and
Affluent non-Hispanic whites, there is no statistical difference in
their outlook for 2017. Fifty-eight percent of Affluent Hispanics
stated that they feel 2017 would be better economically and 57% of
non-Hispanic whites reporting the same.
This is
a powerful finding for marketers who segment on ethnicity alone.
Economic sentiment, specifically positive sentiment, has big
implications on purchase intent. With Affluent Hispanics having a
significantly different outlook than Hispanics as a whole and more
aligned with their Affluent Non-Hispanic White counterparts, what does
this mean for multicultural marketing in 2017?
Consumer
durable goods purchases are traditionally a good marker of purchase
behavior at large. Looking at major purchases that people might buy for
themselves or their family in the next 12 months gives us insights into
how positive economic sentiment may translate into real-world purchase
habits:
We see
similar statistical relationships play out in next 12-month purchase
behavior among the different groups as we did in the positive economic
outlook. Affluent Hispanics are much more likely than the Total Market
and Total Hispanics to purchase a large appliance in the next 12
months. Again, their purchase behavior more closely resembles Affluent
non-Hispanic whites with 48% of Hispanics stating that they plan on
purchasing a large appliance in the next 12 months and 44% of
non-Hispanic Whites stating the same.
While
these two data points on their own do not answer the question of
whether we should consider Affluent Hispanics as General Market, they
do point to some flaws in the tendency for multicultural marketers to
segment solely by ethnicity or race.
Income,
especially when it comes to purchase intent and economic sentiment are
key drivers in creating common behavior cohorts. Having a myriad of key
demographic and behavioral measurement tools in the multicultural
marketer’s tool chest should be a common practice moving forward.
I
understand the tendency to want to segment solely by ethnicity as
anything else could point to the end of multicultural marketing as we
know it. However, I believe the opposite is true. Having multicultural
marketers that can segment and target beyond the standard breaks make
them more valuable to organizations and brands thus helping the
industry stay relevant in a fragmented marketing world.
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