The US Hispanic Market

1
The US Hispanic Market
PBIRG
PREPARED FOR
Everett Hernandez, GM and SVP Synovate Diversity
PREPARED BY
May 7, 2007
DATE
2
Takeaways from Today

• Major trends for the Hispanic market
• Deeper understanding of acculturation and
  cultural tension and how it affects marketing
• Various insights in Hispanic health
• Trends in African American Research
• Various African American insights

3
Diversity Market Trends
4
2006 U.S. Population

• In 2006, the U.S. minority/ethnic population will
  surpass 100 million people
• The three largest segments of the U.S.
  minority/ethnic population are Hispanic,
  African-American and Asian-American

2006 U.S. Population Estimates Total U.S.
Population 300 Million U.S. Minority/Ethnic
Population 101 Million U.S. Hispanic
Population 45 Million U.S. African-American
Population 41 Million U.S. Asian-American
Population 15 Million
Source U.S. Census Department and Synovate
estimates
5
2006 Diversity Population

• In 2006, close to 1/3 of the US population is
  Hispanic or Non-White
• Hispanics make up the largest share of the
  Diversity population at almost 15

Source U.S. Census Department and Synovate
estimates
6
2000 - 2006 Diversity Population Growth Rates

• All three Diversity segments are growing faster
  than non-Hispanic Whites
• Hispanic population growth rate is largest, but
  about half of that is net immigration

Source U.S. Census Department and Synovate
estimates
7
2006 - 2020 Diversity Population Share

• The effect of the net population growth rate
  disparities are evident over a longer time
  horizon
• Hispanic and Asian-American populations continue
  to make up larger percentages of the U.S.
  Population

Source U.S. Census Department and Synovate
estimates
8
Meet The Americans

• In 2000, about half of Americans reported
  ancestry of German, Irish, English, Italian or
  just plain American
• Yet, if Census had enumerated Hispanic as an
  Ancestry, it would be a close second to German

Top 5 Ancestries Reported in 2000 German 43
Million Irish 31 Million English 25
Million United States or American 21
Million Italian 16 Million Wheres
Hispanic? 45 Million OK, then Wheres
Mexican? 30 Million
Source U.S. Census Department and Synovate
estimates
9
Hispanics - Country of Descent

• Mexicans predominate among the US Hispanic
  population and most of the Hispanic immigration
  continues from Mexico
• Increased immigration from Central and South
  America portend increasing percentages from those
  regions

Source U.S. Census Department and Synovate
estimates
10
Asian-Americans - Country of Descent

• The worlds two largest countries (China and
  India) are the largest contributors of Asian
  population in the US
• The US-Born Asian population is represented
  disproportionately by Chinese and Japanese as a
  result of past migration patterns

Source U.S. Census Department
11
Trends for the Future
12
Trend 1 Education ? Income/Social Stature

• Education of U.S.-born Diversity populations will
  contribute to higher social stature and income
• Less-educated immigrants will result in lower
  averages, but second generation will largely do
  better than their parents

Source U.S. Census Department and Synovate
estimates
13
Trend 2 Diversity Populations Will Spread

• U.S.-Born and Immigrant populations will respond
  to increased economic opportunities far from
  earlier entry points
• The move from insular bases will result in
  increased acculturation and increased
  acceptance as with African-Americans (perhaps
  very slowly)

Source U.S. Census Department and Synovate
estimates
14
We Already See this with Hispanics

• Hispanic Population is growing faster in the
  Southern states than in traditional entry states
  (CA, TX, NY, FL), due in large part to
  international immigration

10 Fastest Growing Hispanic States
(1990-2000) Growth Foreign-Born
(2000) North Carolina 449 63 Arkansas 344 49
Georgia 329 63 Tennessee 299 51 South
Carolina 236 52 Nevada 225 49 Alabama 222 4
5 Kentucky 194 42 Minnesota 189 42 Iowa 16
9 39
Source U.S. Census Department
15
Trend 3 International Immigration Will Continue

• The economic imperative will require younger
  workers, keeping prospects bright for potential
  contributors
• This will occur whether legal or not. The
  economic incentives are too strong for any other
  outcome

US 35.7
Argentina 6.9 Mexico 5.6 Chile 5.2 Colombia 2.0 Gu
atemala 1.7 Honduras 0.9
Source Energy Information Administration
(Constant 2000 US equivalent)
16
Trend 4 Pan-Latinism Will Enhance Nationality

• National distinctions among Hispanics will be
  complemented by a celebrated sense of Latinism.
  Hispanic youth today demonstrate pride in their
  Hispanic culture as well as their unique national
  differences.

17
A New America in 2050 (or before)

• Diversity populations will necessarily increase,
  both through births and net immigration
• Education will pave the way for increased
  economic opportunities as will the larger
  economic force of an aging Non-Hispanic White
  majority
• Diversity populations will spread to the far
  corners of the U.S. following economic
  opportunities, increasing acculturation and
  acceptance
• International immigration will continue to feed
  this population growth, but will likely look very
  different from today
• Hispanics and Asians will increasing blend into
  the fabric of U.S. society, different in
  cuisines, cultures and traditions, but American
  nonetheless
• The seeds of all of these trends are happening
  NOW. The challenge for marketers is to plan for
  this new future

18
Segmenting the Hispanic Market
19
Common Approaches Single-Purpose and Overarching

• Geographic, Country of Birth/Descent, Various
  Language Attributes, Media Habits, Single-Purpose
  Attitudinal/Behavioral Attributes
• Acculturation combines aspects of
• Life in U.S.
• Interaction with U.S. Culture
• Attitudes and Behaviors
• And reflects marketplace trends in
• Language
• Media Habits

20
What is Acculturation? Acculturation as a Process

• It is the process by which a person learns or
  accommodates to a new culture.
• Observing ? Reacting ? Adapting
• Can be Dynamic or Passive (Conscious Effort vs.
  Rubbing Off)
• Acculturation DOES NOT REQUIRE a person to
  abandon all aspects of their home culture.

21
The Uni-Dimensional Acculturation Model

• This model allows both acculturation and
  retro-acculturation.
• Only speaks to the host culture does not
  reference home culture.
• The uni-dimensional model is a more efficient and
  better predictor of ownership and purchase intent
  than the bi-dimensional models.

Partially Acculturated
Mostly Acculturated
Unacculturated
22
Push and Pull Factors Affecting Acculturation

• Interaction with foreign host culture (positive
  or negative)
• Job, Family, Neighbors, Education, Leisure
  Activities, Exposure to values, Media,
  Spanglish
• Interaction with home culture
• Family from home country, social support network
  of others from home country, news, language serve
  to pull the person to the home country
• Household formation and Children exert pressure
  to Acculturate and the effects are evident in
• Activities like sports and travel begin to change
• Media use shifts from Spanish to English
• Movies, DVDs, home theater, Internet all gain
  presence
• Food preferences and preparation habits
• Where they shop for food and personal care
  products
• Accelerated introduction of host country brands

23
Segmenting by AcculturationDifficulty
Describing Partially Acculturated

• Most acculturation models segment the market into
  
• One small Acculturated group (9)
• One Unacculturated group (25)
• One very large, non-descript, Partially
  Acculturated group (66)

24
Tension and Acculturation Sub-Segmentation
Tension Enhances Understanding

• The process of acculturation requires adaptation
  which places anxiety or stress on an individual.
  These stresses affect rate of acculturation and
  resulting consumer behavior.
• Attempts to fit into new culture
• Attempts to preserve the home-country
  connections

25
Tension and Acculturation Sub-Segmentation
Cultural Tension Differences
26
Tension and Acculturation Sub-Segmentation
Tension-Enhanced Acculturation

• By overlaying Tension onto the Standard
  Acculturation Model, we can more fully describe
  Partially Acculturateds and Un-acculturateds

Mostly Acculturated
Mostly Acculturated
American Latinos
Partially Acculturated
New Latinos
Traditionals
Unacculturated Stable
Un-Acculturated
Unacculturated Traditional
Standard Acculturation Model
Tension-Enhanced Acculturation Model
27
Tension and Acculturation Sub-Segmentation
Tension Enhances Segment Differences

• Acculturated Hispanics do retain a pride in their
  culture, but it manifests differently
• Newer immigrants are likely to be much more
  optimistic, not taking the benefits of the new
  country for granted.
• Significant discomfort with the American
  culture drive insular social behavior and
  reinforce home-country product and brand choices
  (or substitutes) providing a pull that prevents
  full acculturation
• Cultural Tension reinforces the need to stay
  connected, whether with home-country friends and
  family or with a new-found Pan-Latino identity.

28
Tension and Acculturation Sub-Segmentation
Benefits of Acculturation Sub-Segmentation

• Cultural tension offers additional
  differentiating power

HISPANIC OWNERSHIP OF MAJOR CREDIT CARD - By
Acculturation Segments-
Mostly Acculturated
American Latinos
Partially Acculturated
New Latinos
Unacculturated
Traditionals
Total Hispanics
29
Segmenting the Hispanic Market Expanding on
Traditional Acculturation Models 6 Sub-Segments
Source Synovate U.S. Diversity Markets Report,
2006
30
Language Use and Media
31
Language Spoken at Home

• Language spoken at home is used to categorize
  U.S. Hispanics into 3 groups of language
  dominance.

English Dominant
Spanish Dominant
32
Language Spoken at Home

• But not incapable of speaking English --
  according to 2000 Census data, half of those who
  speak Spanish at home are speaking English easily.

English Capability among Hispanics speaking
Spanish at home
Source Census 2000, U.S. Census Bureau
33
Language Spoken at Home

• Although still strong, Spanish dominance in
  Hispanic households is declining.

Spanish Dominant
Both Equally
English Dominant
34
Media Exclusivity by Acculturation

• Across all acculturation groups, the majority
  consume media in both Spanish and English.

Media Exclusivity By Acculturation Level
No English Media
English Spanish Media
No Spanish Media
Partially Acculturated
35
Evolution of Mainstream and Hispanic Media

• Networks see opportunity for primarily English
  language programming featuring Hispanics in
  mainstream media.
• New channels and changed formats targeting
  (mostly young) Hispanics in English or
  Spanglish abound.

Hurban radio
36
Takeaways

• The growing population of U.S.-born Hispanics is
  driving an overall decline in Spanish dominance
  and English language communication is understood
  by most.
• Yet, Spanish continues to be important,
  particularly for reaching new immigrants and for
  delivering messages that culturally resonate with
  all.
• Spanish language media is growing, in number and
  in audience.
• Reaching critical mass -- Hispanic media now
  competing with mainstream media and influencing
  mainstream programming (e.g. Freddie) and ads
  (e.g. Toyota Super Bowl ad).
• New media reflects change in population - moving
  toward mix of both languages rather than
  either/or.

37
Various Hispanic Insights in Healthcare

• Diabetes disproportionately affects Hispanics.
  Mexican-Americans, for example, are 1.7 times
  more likely to get diabetes than non-Hispanic
  whites, according to the Diabetes Association.
  Some attribute the disparity to genetics, along
  with lack of exercise, obesity and diet.
• Hispanics make up most of new AIDS cases in LA
  county
• The longer Hispanics are here, the more likely
  they are to become obese, to develop diabetes,
  high blood pressure and heart disease
• Reluctance to go to the doctor until symptoms are
  severe/ dismissal of minor symptoms
• Fear of side effects of Rx medication
• Lack of understanding of non-Hispanic doctor
• Preference for traditional remedies
• Deference towards the physician, not wanting to
  be disrespectful by questioning
• Difficulty adjusting staples of ethnic diet
• Unaware of healthcare resources available
• Lack of language capabilities may cause many not
  to seek medical attention or advice

38
Various Hispanic Insights in Healthcare

• Rely on
• Home remedies
• Over the counter medications
• Advice from family and friends
• Tend to self-diagnose and self-treat initial
  symptoms
• Less compliant with routine check-ups and
  follow-up instructions
• Family recommendations of utmost importance in
  selecting doctor/hospital
• Women in charge Medical decisions usually left
  up to the female/mother
• Reluctant to admit feelings of depression due to
  various societal pressures in the community and
  feelings of perceived weakness (cultural and
  negative stigma associated)
• Continued need for materials to be printed in
  Spanish (El Contacto)
• Marketers must win their trust

39
African-Americans By The Numbers
40
1 in 8 U.S. Residents is African-American
40,626,000 African-Americans in the United
States 14,798,000 African-American Households in
the United States

• More than 1 out of 8 U.S. residents is
  African-American
• The average African-American Household is 2.7
  members, somewhat smaller than the average
  Hispanic household

Source Synovate Diversity
41
Enormous Spending Power, Minimal Marketing Dollars

• 723 Billion in Spending Power. Expected to hit
  965 billion by 20101.
• Average Income is 48,0002.
• Significantly higher than the average Hispanic
  income of 36,900
• Twice as likely than Hispanics to live in a
  household with an income greater than 75,0002.

• Less than 1 of total advertising spending
  specifically targets African-Americans.
• Nearly 3 billion was spent during 2003 on
  Hispanic targeted efforts, compared with 1.8
  Billion
• for African-Americans.

Ad Spending Targeting African-Americans 1.8
Billion
2004 U.S. Ad Spending 263.7 Billion3
1 Whats Black About It? Pepper Miller, Herb
Kemp 2005

2 Source Synovate
Diversity

3 Ken Smikle, Target Market News
42
39 of African-Americans Live in the Top Ten
Markets

• African-Americans are less concentrated in the
  top markets while Hispanics are much more
  likely to live in the largest cities (57 of
  Hispanics live in the top 10 Hispanic markets)

For the data in this report, Synovate interviewed
1000 African-Americans from a nationally
representative sample during September and
October 2005
1 Source Synovate Diversity
43
Detailed FindingsThe Local Market
African-American Culture
44
Similar To Hispanics In Many Ways

• African-Americans and Hispanics are more likely
  to agree
• It is important to pass on my culture to my
  children
• I am a religious person
• I feel I am discriminated against
• I feel uncomfortable with the American way of
  life

Top 2 Box scores
Source Synovate Diversity
45
How Are African-Americans Different?

• Living with the Struggle
• Psychological baggage affects the attitudes and
  behavior of African-Americans1.
• Many feel a cynicism toward established
  institutions and a negative attitude when it
  comes to future prospects.
• Unity in the Black Community
• African-Americans join organizations for support,
  socializing and a way to associate with people
  that have the same values, beliefs and understand
  black culture.
• From African-American Fraternities with 1.56
  million members2 to hundreds of church groups
  that are often the center of a community,
  African-Americans place value in cultural
  consciousness and this peer interaction
  influences their purchase behavior

• Whats Black About It?- Pepper Miller and Herb
  Kemp, 2005
• National Pan-Hellenic Council, Daily Town Talk,
  Alexandria Louisiana 2006

46
Cynicism In The African-American Market

• African-Americans hold a negative view when it
  comes to their financial outlook and future
  prospects.

Top 2 Box Scores
1 Source Synovate Diversity
47
African-American Organizations Affinity
Marketing

• African-Americans Are Joining.
• 1 in 5 African-Americans are a member of an
  organization that caters to African-Americans,
  and the same number have attended events catering
  to the African-American community1.
• Corporate America Is Listening
• Partnering with African-American organizations
  for a good cause.
• Companies are working side by side with
  Non-Profit Organizations, or at Minority Business
  Seminars and Black Music Events.

1 Source Synovate Diversity

2 Whats Black About It?-
Pepper Miller and Herb Kemp, 2005
48
African-American Consumer Behavior
49
Detailed FindingsThe Local Market
Media and Purchase Behavior
50
African-Americans Consume More Media

• Media Is A Major Part of African-American Life
• African-Americans consume more media than both
  the General Market and Hispanic populations1
• On average, African-Americans own more TVs,
  larger TVs, and better equipped TVs than whites2
• Spend more time reading magazines and newspapers
  than the Hispanic market
• African-Americans in the 18-34 age group consume
  the highest number of radio and internet hours
  compared to their peers.
• African-American Men Consume More Media Than
  WomenEspecially Radio
• African-American women age 18 to 54 spend far
  fewer hours with media than men the same age.
• Radio accounts for the biggest difference in the
  18-34 age group with females consuming half the
  radio hours as males

1 Source Synovate Diversity

2 Home Technology Monitor October
2004
51
High Marketing Involvement

• African-Americans are more likely than Hispanics
  to use a coupon when shopping and more
  likely to have made a purchase through Direct
  Mail
• More likely to have participated in a contest or
  sweepstakes than both the Hispanic and General
  markets.
• Comfortable with Celebrity endorsements and more
  likely to trust advertising

Top 2 Box Scores
Source Synovate Diversity
52
The Digital Divide is Shrinking

• In 2004, 61 of African-Americans had Internet
  access, today 75 have Internet access.
• - A larger percentage have Internet access
  compared to Hispanics.
• Average Internet usage is higher among
  African-Americans than Hispanics.

Source Synovate Diversity
53
Using the Internet

• African-Americans Are Clicking
• African-Americans are more likely than Hispanics
  to have clicked on an internet ad
• The number of people that made an internet
  purchase is also higher among African-Americans
• 5 of African-Americans have a BLOG

Source Synovate Diversity
54
Healthcare and the African-American Market
55
Healthcare and African-Americans

• Lower Quality HealthcareMaybe
• African-American Stereotypes and less
  communication between blacks and their
  physicians compared to whites contributes to the
  possibility for lower-quality healthcare1.
• Some studies suggest that these issues have
  built the perception by African- Americans that
  they are both being treated with disrespect and
  receiving less- quality healthcare2.
• African-Americans Are More Tolerant About Weight
  Gain
• One study found that only 39 of young,
  overweight males considered themselves
  overweight3
• This is a cultural thing with African-American
  men wanting to bulk up and women looking for
  an hourglass figure
• .

1 Medical Economics, February 2005



2 National Association
of Social Workers, August 2005

3 Black Issues in Higher
Education, B. Denise Hawkins, Morgan State
University Sciences Research Center
56
African-Americans Open to a Healthier Lifestyle

• African-American Health
• African-Americans are less likely than Hispanics
  to feel good about their physical condition.
• The good news is African-Americans are the most
  likely to be concerned enough to want to change
  their lifestyle. They are the most likely to have
  visited a doctor in the past year and to have
  changed their eating habits recently.

Top 2 Box Scores
Source Synovate Diversity
57
QUIZ TIME!

• Name 4 of the top 5 Hispanic markets in the U.S.
• The US Hispanic population is greater that which
  country
• Canada
• Spain
• Both
• Which group is more likely to click on internet
  ads?
• Hispanics
• African Americans
• Who is more likely to have visited a doctor in
  the past year
• a. Hispanics
• b. African Americans
• c. General Market
• d. Asian Americans
• African American women spend more time on media
  than the men
• TRUE or FALSE

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Our curiosity is all yours.