Beyond Translation: Hispanic Merchandising Report

They are a marketer's dream: With spending per household that outpaces national spending averages across nearly every channel; responsiveness to nearly all advertising; and a growing customer base that will reach nearly a quarter of the total U.S. population in less than 50 years, Hispanics have become the next big target market.The 45.5 million Hispanics in the United States spend $34 billion on consumer products and goods, with that figure rising to a projected $52 billion by 2015, according to a May 2008 Information Resources Inc. (IRI) "Times & Trends" report. The U.S. Census Bureau predicts the U.S. Hispanic population will jump from 13% of the total U.S. population in 2000 to 15% in 2010 and 24% by 2050. Top markets with large Hispanic populations include Los Angeles, New York, Miami, Houston, Chicago, Dallas-Fort Worth, San Francisco, Phoenix, San Antonio and McAllen, Texas. With Hispanics spending more money on CPG products, brands and retailers are searching for ways to tap into this growing consumer base. "Hispanics are a fast-growing population, and we realize they represent a decent amount of our sales and also of [Nestlé Pure Life's] growth," says Carolina Rodriguez, brand manager for Nestlé Pure Life, a brand of Nestlé Waters North America Inc., Greenwich, Conn. Nestlé Pure Life recently launched Vive Sanamente (Live Healthy), its first Hispanic campaign featuring Hispanic television personality Cristina Saralegui. That said, Mario Quinones, president of Latin-Pulse, the Hispanic and Latin American division of AcuPoll based in Mexico City, believes it's still early. "[Hispanics] probably represent about 15% of the total U.S. population. I doubt that many companies are spending 15% of their budget to reach Hispanics, so it's still a very young market."Researching HispanicsWith so much research about Hispanics and their spending and shopping habits available today, companies need to carefully sift through the data to find the information that will help them reach their target audience. "At least make some kind of effort -- it doesn't have to be formal research -- to find out about your Hispanic customer," says Quinones. "Join up with a retailer to do some in-store probing to get reactions [from Hispanic consumers]."By knowing who they wish to reach, brands can use research to design more effective P-O-P and overall marketing campaigns. "You really need to know your target, what your product is, and what niche or hole it fills to help you narrow down the research," says Tommy Thompson, president of iNSPIRE!, a Hispanic marketing firm based in Dallas. "We're able to customize our executions on a local level for our retailer partners, taking into account consumer demographics, retailer preferences, location and physical size of each store," says Joseph Vizcarra, integrated marketing manager-multicultural for Unilever North America in Englewood Cliffs, NJ. "This allows us to be much more flexible in planning and executing different types of in-store demos, events and promotions, and enables us to have more successful programs."One thing research can help retailers and companies with is figuring out how to reach the many Hispanic sub-groups. "Hispanics come in different flavors -- different levels of acculturation, ethnicity, education and classes. However, they all speak the same language," says Dr. Mary Beth McCabe, president of Sun Marketing in San Diego. "Your marketing research will pay great dividends, as you'll learn what they want and how they want to hear about your services.""It's always tricky when you're doing a national campaign because you've got to come up with more of a universal message," says John Echeveste, partner of Valencia, Perez & Echeveste Public Relations in South Pasadena, CA. "That's why we see so many national ad campaigns [aimed at Hispanics] based around the theme of family, because that's a common denominator among all the sub-groups.""The key thing here to understand is what are those links that are common to all of them," adds Quinones. "For example, all Hispanics love to laugh, love their families and love music. Those are some of the things that are very common regardless of the country they came from."Nestlé Pure Life wanted a universal message to reach as many Hispanics as possible. "When we decided to go with Cristina Saralegui [as our spokesperson], that was one of our question marks -- does she appeal to the whole Hispanic community?" says Rodriguez. "We did some focus groups in different cities, as well as a lot of research, to find out. Everybody knows Cristina, and when it comes to a message of health and wellness, it's a very basic message that a lot of people want to hear about."Shopping PatternsHispanic consumers shop at a variety of stores, depending on their acculturation or income level, those interviewed say. "What we've seen in our studies and in talking to our readers is that there's a clear stratification in terms of where they shop," says Donald Mazzella, editorial director for the Richfield, NJ-based Information Strategies Inc., which publishes Hispanic Biz Digest. "If you look at Hispanics [in the lower] economic sector, they prefer to shop in Hispanic-oriented establishments. As you move up the [economic] ladder, they tend to move more toward mainstream retailers," he says. "When you move up to the higher economic levels, Hispanics tend to blend in with the non-Hispanic population in where they shop.""They shop at all stores, but they shop more frequently at Hispanic grocery stores," notes Sun Marketing's McCabe. "It's not unusual for them to shop daily -- Hispanics shop more often than any other segment of the market."Cheetos' Hispanic marketing campaigns target consumers in the Western states through small grocery and convenience stores. "Our merchandising units for Hispanic independent stores and markets usually tend to be smaller, given the small footprint of the stores with which we are working," says Yamileth Calvo, Cheetos senior brand manager for Frito-Lay, Plano, TX. "We also aim to highlight products, such as Flamin' Hot Cheetos or Chile Limon Cheetos, which have greater appeal to our Hispanic consumers."This strategy seems to be working for the Frito-Lay brand. "Hispanics are key consumers to the Cheetos business and are great fans of the brand, accounting for 20% of Cheetos consumption," Calvo says.For its recent Desafio del Sabor (The Flavor Challenge) program, Unilever partnered with retailers such as Unified Grocers, Fiesta Mart, H-E-B and Sedonas. "For this specific campaign, we allocated our resources fairly and equitably across retailers with a high-indexing Hispanic consumer segment and based on pre-determined criteria, such as product mix," says Vizcarra. Language ArtsMany of these brands choose bilingual messaging on Hispanic marketing tools to broaden their appeal to both English and Spanish speakers. "One will have to consider bilingual labeling. That appears to be very important, not only because of the information part of it, but because the consumer tends to feel like [the product] really cares about them and is keeping them in mind," says Quinones of Latin-Pulse. "There's a big portion of Hispanics who don't speak Spanish, so it's important to be bilingual so you don't alienate other consumers," iNSPIRE!'s Thompson adds.For Nestlé Pure Life, TV and print ads are in Spanish because the ads run in Spanish-language publications and channels, while P-O-P displays and websites have English and Spanish.Tecate chooses its language depending on the audience. "For fights [boxing matches] that have a much wider appeal, we have bilingual or language-neutral appeal," says Carlos Boughton, brand director for Tecate and Tecate Light in White Plains, NY. "We tend to tailor our campaigns to who will be the wider audience."Cheetos research helped the brand define its language preferences. "Based on insights about our consumer and their behaviors, we evolved our marketing tools to being only in Spanish, with the exception of our [bilingual] packaging," says Calvo."We typically provide all our promotional materials and P-O-S in a fully bilingual format," says Unilever's Vizcarra. "This allows us to reach both Spanish dominant and bilingual consumers, and also addresses the needs of our customers. This also allows us the flexibility to reach various acculturation levels of consumers."Capturing the SaleWhile it often depends on the retailer or brand, marketers can reach Hispanics in a variety of ways: radio, TV, billboards, in-store demos and product sampling, celebrity endorsements, direct mail and coupons. "For those companies that have the budget, advertise on Spanish media," advises Quinones. He also recommends taking certain dates that are important to Hispanics, such as Hispanic Heritage Month (September) and Cinco de Mayo, and building campaigns around those days. "Companies that tend to develop programs around those special dates have been very successful," he adds."In our work with Cheetos, we have found radio and billboards to be particularly effective in reaching these consumers," says Calvo. "Our Hispanic campaigns focus on insights key to the Hispanic consumer and aim to leverage themes and phrases unique to their culture." For example, a recent Cheetos campaign aimed at Hispanics revolved around Cheetos XXtra Flamin' Hot. "The program leveraged insights regarding flavor preferences, particularly spicy food, within the Hispanic community, as well as the fun, competitive nature among males, a primary target for Cheetos," Calvo says.Unilever tailors each Hispanic marketing plan around that brand's message to maximize the impact. "For our programs, we know that being able to sample, taste, touch and see our products is key in making purchase decisions, which is why we place an emphasis on in-store executions," says Vizcarra. "Since we focus on in-store executions, we see the value of providing Hispanic consumers with bilingual promotional and product information at the point-of-purchase. This could come in the form of our recipe booklets, coupons or promotional offers."For the past several years, Tecate has teamed up with boxing matches to reach its target audience. "We believe it's been incredibly successful," says Boughton. "Boxing works for us in two different ways -- there's a bigger proportion of Hispanic consumers who watch it, and no other sport out there has that boldness and character the way boxing does. That boldness and character reflect the Tecate brand." From in-store P-O-P to advertising on Spanish-language TV, Tecate works with a variety of sources to market its beer to Hispanics."Hispanics like brands that speak to them," says Sun Marketing's McCabe. "They want to relate to the products and services as if they were talking directly to them, one on one."

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