Ethnic Marketing Research, Part 1: Where Culture Meets Shoppers

By now, most corporations recognize that one of their primary sources of new growth in the U.S. will come from ethnic groups including Hispanics, African Americans and Asian Americans. These and other multicultural consumers, who comprise 38% of the current U.S. population, are expected to reach a combined majority status by 2044, according to a recent Nielsen report.Nevertheless, marketers continue to struggle with the question of whether to customize or standardize their multicultural platforms across different target audiences. Too often, companies that lack a clear strategic direction on this issue tend to allow budgetary restrictions to dictate their decisions. In doing so, however, these firms may be leaving billions of dollars on the table. Consider: Multicultural consumers represent more than $3 trillion in combined spending power in the U.S., based on a 2014 report by the Selig Center for Economic Growth.There is a better alternative. By gaining a deeper understanding of multicultural audiences, marketers will be able to develop more impactful solutions that address the specific needs and desires of individual ethnic groups. Research can help fill this void by providing a stronger foundation of culture-based knowledge and insights from which to build a truly cross-cultural marketing platform.That is the premise of a new research study of U.S. cultural values by WPP-owned Geometry Global. Commissioned in early 2015, it is the first study to apply a cross-cultural values framework to the purchase- decision journey across the major U.S. multicultural populations. The three-phase survey, which began in April, will assist companies in realizing the full potential of their multicultural marketing strategies by providing in-depth answers to the following questions:What impact does culture have on consumer behavior throughout the purchase-decision journey?Do multicultural consumers share similar or different decision-making patterns as the “mainstream” consumer?Are their behaviors and attitudes driven by similar or different cultural drivers?“In order to drive relevance through a cross-cultural marketing solution, companies must be able to identify behaviors that represent points of commonalities or divergences across ethnicities,” says John Burn, head of the multicultural practice at Geometry Global. “Our research groups behaviors on their cultural dimensions in a way that makes intuitive sense and drives decision-making toward the growing multicultural opportunity.”Research participants were guided through a series of activities such as the recording of video diaries to reconstruct the steps in a recent purchase. The feedback gathered during these phases reveals how attitudes manifest themselves differently in different ethnic groups.First Study of Its KindGeometry built its framework using the six cultural “value dimensions” pioneered in the 1970s by Dutch social science researcher Geert Hofstede. (The Hofstede model is the one most often selected for marketing applications, owing to its simplicity and validation in several global cultural research studies.) By overlaying these cultural dimensions with the results of a Pathfinder mapping study (Geometry’s customizable model for mapping purchase-decision journeys) the report will identify how culture impacts specific attitudes and behaviors along the path to purchase for Hispanics, African Americans, Asian Americans and non-Hispanic whites.Geometry’s research breaks new ground by bridging the gap between the value dimensions and consumer/shopper behavior. For example, “power distance,” which reflects the level of acceptance of inequality in society, can be used to explain multi-generational shopping behaviors and the influence on shopping decisions by elders in one’s household. Similarly, “individualism or collectivism” may answer questions about the involvement of family in making purchase decisions, as well as shopping-related behaviors such as the preference for dining at restaurants versus eating home-cooked meals. (For the complete list, see guide at the end of this article.)Until now, no cultural-values framework (including the Hofstede model) had ever been used to compare ethnic groups within the U.S., and no study has attempted to unlock the cultural drivers of shopping behavior across those same multicultural audiences. According to Burn, this research could provide a new set of tools for marketers to determine which strategies and tactics are most effective to activate against multicultural shoppers throughout the purchase journey.As they begin to adopt the language of the cultural dimensions, Burn predicts that companies will add a powerful new mode of communication to their growing arsenal – a shorthand, in effect, that could have a profound impact on strategy discussions with internal marketing partners.“For us, it created a common language between our creative, planning and account teams,” he says. “We’ve developed a greater connectivity between different functions and a process by which we can more easily understand each other. We can jump immediately into solution mode.”Beneath the SurfaceAt the heart of Geometry’s research lies the principle that multicultural marketers must probe beneath the surface of shopper behavior (i.e., the “what”) to truly get at the “why.” Says Burn: “To only consider the behavior itself is looking in a rearview mirror. If you really want to affect behavior, and put yourself ahead of it, you need to be able to connect the dots between the behavior and the motivation.”While plenty of available data exists on observed shopping behaviors (e.g., consumption, media usage, basket analysis, frequency/trips and missions), very little research has been done to explore the impact of culture on shoppers and the path-to-purchase continuum. Why, for example, does a Hispanic mom bring her entire family to a Sam’s Club or take an extra trip to a Carniceria where her butcher knows her by first name; why does she seek the opinion of her “comadres” and extended family as a source of new product information instead of experts; and why do nearly half of all U.S. Hispanics not hold a basic commercial relationship with a bank and thus under-index in long-term financial planning products and services?“If the Hispanic mom shops with her kids, it’s because of a connection to her family (i.e., collectivism), but it also speaks to her enjoyment of the shopping experience.”— Dr. Jake Beniflah“These kinds of consumer behaviors are rarely explained by just one variable. There are perpetual overlaps of multiple cultural dimensions,” says Dr. Jake Beniflah, executive director of the Center for Multicultural Science and one of several adjunct team members on the study. “If the Hispanic mom shops with her kids, it’s because of a connection to her family (i.e., collectivism), but it also speaks to her enjoyment of the shopping experience as an element of fun or entertainment (i.e., indulgence).”For proof of the impact of culture as a driver of consumer behavior, marketers may examine their own geographical sales distributions. Luxury brands like Louis Vuitton and Remy Martin, for example, see some of their highest concentration of sales in relatively poor countries in Asia and Latin America, says Marieke de Mooij, an advisory member of Geometry’s research team and author of “Global Marketing and Advertising: Understanding Cultural Paradoxes.”In those economically challenged countries, there are mitigating cultural factors that can be explained by the value dimensions, says de Mooij. “Most low-income countries score high on power distance, and wealth is not distributed equally as compared to low-PDI cultures. In these countries, status holders have a greater need to show their power than in low-PDI cultures where equality is considered of high value.” In addition, countries like Mexico with high scores in the masculinity dimension tend to reflect the value they place on success by their embrace of luxury goods, she says.Cultural Dimensions in the U.S.Geometry conducted its research over three phases beginning in April. Phase one generated scores for the cultural-value dimensions in the U.S., as well as some correlations between specific shopping behaviors and those dimensions. In phase two, ethnography tools were used to observe the attitudes and shopping behaviors surrounding a recent purchase of a mobile phone or a better-for-you snack product. (Note: The categories were chosen to represent high- and low-involvement purchases, respectively; the study was limited to two product categories to be consistent with the scope of the overall research project.)Observations from phase two will be incorporated into a questionnaire for the final step: A Pathfinder study that maps out the pathways, including the varying need states and purchase triggers, for each of the multicultural groups. Ultimately, a portrait will emerge of culturally driven purchase-decision journeys whose insights should prove valuable to a broad spectrum of marketers, says Beniflah. “We are going to help drive effectiveness and efficiency for CPG companies in virtually every category,” he says.In phase one, the six cultural value dimensions were measured for each of the study’s major U.S. multicultural groups: Hispanics, Asian Americans and African Americans. These were then compared against non-Hispanic whites. (Chinese Americans were chosen to represent the overall U.S. Asian population because this group conformed best to the rigorous demographic requirements of the sample.) The survey, which mirrors Hofstede’s model with its matching questionnaire and comparable sample of approximately 1,000 online participants, produced a set of index scores on a zero-to-100 scale. The results illustrate how the groups rank relative to each other on each of the dimensions. (See chart below.)In addition, each of the groups was asked a series of 10 to 15 questions that delved into specific behaviors and attitudes. Correlations between the two sets of data emerged that began to suggest how cultural values could be related to specific consumer behavior – a dynamic that will be explored in much more detail in phase three. Relatively high power-distance scores, for example, were found among Chinese Americans, which can explain why a specific cultural group may show a high frequency of shopping, or doing household chores.Among all multicultural groups in the sample, Chinese Americans adhered most closely to their scores from the original Hofstede model, implying that this group retains stronger ties to its cultural heritage than any of the other groups.“Chinese citizens all over the world are living closely together. Every big city in every country has a Chinese quarter, which probably contributes to the fact that this group has not assimilated within mainstream population as much as the other ethnic groups have done,” says de Mooij. “The Chinese Americans stood out for several dimensions: high on PDI, low on IDV [meaning higher collectivism]; highest on LTO and lowest on IVR,” notes de Mooij. “LTO is particularly important, as it implies thrift and investment, which is very much in contrast to a mainstream American culture with its ‘Buy now, pay later’ mentality.”Lines are Blurring Among HispanicsIn stark contrast to the Chinese, the scores among U.S. Hispanics suggest a far greater degree of homogenization to non-Hispanic Whites than one might expect. Also, greater divergences were found when compared against the Mexico National Study conducted by Hofstede. Some of the biggest changes were seen among U.S. Mexican Hispanics, who, for example, scored much lower in power distance and showed a significantly higher degree of individualism than their counterparts in Hofstede’s national study in Mexico. Additional substantial variations within this group were noted across the entire values spectrum. (See chart below.) These scores may be considered representative of the wider Hispanic group. According to the 2012 U.S. Census, Hispanics of Mexican heritage accounted for 64% of the overall U.S. Hispanic population, followed by Hispanics with Puerto Rican background (9.4%), Salvadoran (3.8%), Cuban (3.7%), Dominican (3.1%) and Guatemalan (2.3%).One explanation for the apparently strong homogenization of Hispanics is that many Hispanics migrated to the U.S. to improve their lives. When they get jobs, these are usually jobs at U.S. companies, where the only way to succeed is by adapting to American ways of interrelating, says de Mooij. “After some time, these U.S. values may be internalized, and reflected in answers to value questionnaires,” she notes.Previously, cultural researchers have noted the trend toward increasing individualism among U.S. Hispanics. “Latinos tend to find individualism within a collectivist culture – that is, ‘I care about my family, community and culture, but I still have to think about myself,’” observed an Iconoclast study in 2012.“Hispanics in the U.S. behave in a manner that is collectivistic, but marketers must understand that they also live in an individualistic macro-culture,” observes Burn. “The belief that Hispanics in the U.S. adhere to only one cultural dimension is over-simplistic. For marketers, the key will be to know when a particular cultural value, or values, explains a given behavior, and why.” The above results speak to the contextual nature of culture for bi-cultural Hispanics. They may choose to embrace, disassociate or fuse their Hispanic cultural identity/values with American culture, and vice versa, depending on their different roles and occasions – work, family, friends, shopper.Geometry Global uses an insights tool called “Pathfinder” to map, segment and prioritize people’s purchase-decision journeys. This diagram simply illustrates how cultural dimensions research can help identify points of convergence (where triggers and steps are the same across ethnic groups) and divergence (where they might differ for various groups).Mapping the Path to PurchaseIn phase two of the research, participants were guided through a weeklong series of activities that helped reconstruct the steps in a recent purchase of a mobile phone or snack product. Each activity was recorded and uploaded to a video diary. At-home assignments ranged from the simple (e.g., answering questions related to thoughts/feelings at various times before and after purchase) to the complex, such as drawing a heart-shaped diagram to illustrate the desired attributes of a selected phone (i.e., the further away from the center of the heart, the less important the attribute). Participants were also asked to visit the retail stores where purchases were made, interacting with the products and sales people in a way that was consistent with their recollection of the actual purchase.Feedback during this phase provided insights into how certain shared attitudes manifest themselves differently in different ethnic groups. Anxiety, for example, showed up in the diaries for both product purchases. “For Chinese Americans, anxiety was mainly about the fear of making the wrong decision (i.e., uncertainty avoidance) or being certain of spending money carefully (i.e., long- term orientation), particularly for a high-ticket item like a mobile phone,” explains Bridget Gilbert, research director at Geometry Global. “For Hispanics, anxiety was more about making sure they are taking care of their family well.”“Many [African Americans] were inclined to think the sales associates would have no interest in their needs and will push products they don’t really want.”— Nicole CatalanoSaid one Hispanic video diary participant regarding her snack purchase: “When my kids go to school I always put a snack in their lunchbox – juice or a pack of cookies – because there are many times that they don’t like to eat the food that’s given at the school. I get worried because … then how are they going to learn anything?”Several African Americans, meanwhile, expressed a mistrust of salespeople in their mobile phone video diaries. “Many were inclined to think the sales associates would have no interest in their needs and will push products they don’t really want,” says Nicole Catalano, associate research manager at Geometry Global. “They did extensive research on product features to make sure they were informed and getting the best deal on the best product. Many also choose to buy their phone online rather than in a store. By contrast, non-Hispanic whites are also doing research pre-store, but many opted to buy their phone in a store, and mention interacting with the salesperson while they are there to learn more about different phones.”These and other insights will be incorporated into the Pathfinder model, which includes detailed questions about what triggered different groups to want or need the product; planning steps they might have done to help inform their purchases (e.g., looking for coupons, researching information, etc.); and in-store activities such as comparing products and interacting with salespeople. “We segment the audience based on shopping behavior, with variables such as trip type, trip planning, triggers and different shopping steps taken,” explains Gilbert. “Each segment, or pathway, is then mapped using the survey data mentioned above, and data such as sequence and importance of steps. We then profile each pathway, based on their demographic, behavioral and attitudinal similarities to create a full picture of which shoppers this group represents in the market.”When these pathways are juxtaposed with the cultural value dimensions and behavioral profiles in phases one and two, Geometry will be able to show how various cultural drivers influence the path-to-purchase journey for different ethnic groups. “We will identify the greatest points of influence along the shopper journey and where/how those differ by cultural group,” says Burn. “That will allow marketers to create better-informed shopper programs and build a communication architecture tailored to cultural relevance.”He concludes: “This is what we believe will be the Holy Grail for multicultural marketers.”A Guide to the Shopper Cultural DimensionsThe following terms and definitions for the six original cultural value dimensions are adapted from the book, “Cultures and Organizations: Software of the Mind,” by Geert Hofstede, Gertjan Hofstede and Michael Minkov.Power Distance (PDI)The degree to which individuals accept and expect that power in society is distributed unequally. In PDI+ cultures, being clear about one’s rightful position in society is important, and all sorts of attributes can contribute to showing one’s status: the right clothes, expensive or foreign drinks or certain brands. Related to family, generations are important. In advertising, more grandparents are shown. Consumers accept more advice from higher-placed persons. Those who score lower have lesser status needs and lesser need to adhere to traditional, hierarchical values.Individualism-Collectivism (IDV-COL)For collectivists, conforming to the group and interdependence are important, whereas having a unique identity and independence is most important for individualists. Collectivists more frequently consult family members for making a purchase decision. Collectivists want to own the same brands as their friends, a reflection of conformance needs and interdependence. Individualism, according to Hofstede, “has to do with whether people’s self-image is defined in terms of ‘I’ or ‘We.’ In Individualist societies, people are supposed to look after themselves and their direct family only. In Collectivist societies people belong to ‘in groups’ that take care of them in exchange for loyalty.”Masculinity versus Femininity (MAS-FEM)This dimension points at differences in competitiveness versus quality of life and affiliation needs, as well as variations in male/female role differences. Higher scores suggest a preference in society for achievement, heroism, assertiveness and material rewards for success. In MAS+ cultures, family is viewed as a high priority for women, which points at strong role differentiation. Often trying a new product or brand is related to MAS+, reflecting a certain degree of assertiveness. Owning the same brands as one’s friends relates to MAS-, which reflects affiliation needs. Masculinity is not to be confused with “machismo” (machism).Uncertainty Avoidance Index (UAI)The degree to which people can cope with ambiguity or unclear situations. It reflects difficulties with acceptance of change. In high UAI cultures, the new and unknown can be viewed as dangerous. Uncertainty avoidance is not the same as risk avoidance. Buying and owning insurances, for example, is not related to this dimension. Rather, it implies a greater need for information before taking a decision. Thus, discussing purchases with others is part of a high score on this dimension as well as consulting family. Also included in high uncertainty avoidance are several traditional values. For example, next to high MAS, high UAI is related to viewing family as a priority for women.Long- versus Short-Term Orientation (LTO)High scores on this scale point at perseverance, hard work, investment in the future, planning and thrift; low scores point to preservation of past and present, and respect for tradition. Low LTO cultures exhibit small propensity to save (“spend now, pay later”), focus on today and achieving quick results. Low LTO correlates with Hispanics’ “fatalismo” (i.e., fatalism) and tendency for living for today as they believe that future events are predetermined or caused by external forces and that little or nothing can be done to change their course. A key concept of short-term orientation is service to others; the key to long-term orientation is thrift. Visiting friends frequently correlates with short-term orientation, which conforms to the value “service to others” as described by Hofstede. This dimension has an opposite relationship with the following one, IVR, where restraint points at thrift and indulgence at spending.Indulgence versus Restraint (IVR)The extent to which members of a society try to control their desires and impulses. High scores on this dimension include spending and indulging in the latest gadgets, whereas low scores point at restraint, buying only if needed as well as traditional values. This dimension explains several differences, the degree of happiness people feel in life, enjoying the fun of shopping, often trying new products and preferring home-cooked meals. Owning the same brands as one’s friends is a matter of restraint, not wanting to demonstrate one’s uniqueness.NOTE: Part two, to appear in the October 2015 issue of Shopper Marketing magazine, will explore the various connections between the multicultural pathways of Geometry’s research findings. The article will include an application of the insights to a cross-cultural marketing solution in the mobile phone category.John Burn, head of cross-cultural shopper practice at Geometry Global, will discuss this cross-cultural value framework during a 2015 Shopper Marketing Conference & Expo seminar entitled “Tired of Safe Multicultural Marketing?” at 8:00 a.m. on Thursday, October 15. Attendees will learn how culture impacts attitudes and behaviors on the path to purchase, discover points of convergence and divergence in shopper culture among Caucasians, Hispanic, African-Americans and Asians, and explore ways to better understand shopper behavior around the world. For more info, visit http://shoppermarketexpo.com/session/tired-safe-multicultural-marketing or contact john.burn@geometry.com.About the SponsorGeometry Global is an award-winning, multi-practice marketing agency that influences people’s buying behavior with transformative creative solutions informed by rich data and sharp insights. Using cutting edge insight tools to map and analyze people’s “purchase-decision journeys,” the agency develops programs that drive conversion and measurably impact client business. Bravo is the largest and most successful full-service Hispanic marketing and multicultural agency. Bravo partners with clients, their sales organizations and retail partners to create smart, creative and effective shopper marketing programs that will help clients fully capitalize on the Hispanic market, today’s Latina shopper and constantly evolving trade/retail environments.

Ethnic Marketing Research, Part 1: Where Culture Meets Shoppers

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