Are You Focusing on Hispanic Market Metrics that Management Cares About?

Discussion
Mar 06, 2006

Commentary by Terry J. Soto, President & CEO, About Marketing Solutions, Inc. (www.aboutmarketingsolutions.com)

When it comes to Hispanic marketing, many companies struggle to answer the question of how to measure their Hispanic initiatives. It is typically regarded and treated differently
than measuring performance for the rest of the organization. Too often, Hispanic metrics focus on limited communication results, such as ad awareness or imagery.


I argue that a Hispanic initiative, if recognized as a growth pillar, intended to increase short and long term shareholder value, should conform to the same corporate-wide performance
expectations as others within the organization.


A Hispanic initiative should be truly integrated across the organization, and would thereby necessarily tap company resources and be supported across every business line and
operational function. It would, therefore, follow that the Hispanic initiative’s objectives, strategies and metrics should be directly linked to and work in support of each business
area’s performance. These might include measures of operational efficiencies, sales, distribution, supply chain and, yes, ad awareness and imagery.


It would also follow that the folks in charge of delivering results in these areas are accountable for ensuring results for all market segments: white, Asian, Hispanic, youth,
affluent or any segment or segments on which the company depends for its revenue.


Moderator’s Comment: Are most companies operating and measuring their Hispanic initiatives with a “silo” mentality?


You simply can’t measure a Hispanic initiative’s ROI, have expectations on its timing or the required investment, unless you know how a Hispanic strategy
will impact the entire organization. To do otherwise is an exercise in futility because you will never know what you are measuring. The essential question is not what metrics
to use for measuring your Hispanic initiative, but how it impacts your organization and when you can expect it to perform at the same pace as the rest of the company. That
is what management cares about and, unless you know the answer to this question, Hispanic metrics are meaningless.
Terry J. Soto – Moderator




Read Terry Soto’s new book, Marketing to Hispanics: A Strategic Approach to Assessing and Planning Your Initiative (Kaplan Publishing, 2006),
available
via Amazon.com.



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15 Comments on "Are You Focusing on Hispanic Market Metrics that Management Cares About?"

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David Zahn
Guest

My perspective on this initiative is that I agree that the measurements need to be interwoven with the organization’s other metrics and approaches to evaluation.

I have a difference of opinion that the measurements should be unique or different though from those currently available or used. The measurements are readily available in Panel or Consumer Data for tracking success with targeting ANY group (by age, income, race, etc.). Where do they shop? How much do they purchase? What do they buy? How often do they shop? etc.

I am uncomfortable with the idea of treating any initiative as “separate but equal” here (it minimizes the importance of it psychologically). I would not have separate Hispanic metrics. I would certainly measure my reach, loyalty, conversion, leakage, etc. of that target group as it relates to my strategy (and if the argument is that too few retailers are doing that…I am in full agreement) – but it is not a separate measurement issue then – it is a strategic focus issue.

Bill Bishop
Guest
Bill Bishop
11 years 5 months ago

There’s both good and bad news in the growing focus on Hispanic customers. The good news is that they represent one of the few documented growth opportunities available today in the food business. The bad news is that as Terry has suggested, most marketers are taking an ad hoc (silo) approach to marketing to the Hispanics versus integrating their programs into their overall marketing efforts. Some of this is inevitable, but it looks like there has been a tendency to sub-optimize the opportunity.

We have increasingly come to believe that success in retailing involves organizing to release the greatest value possible, one store at a time, and for Hispanics, this will mean a more sophisticated approach to micro marketing than has been deployed in the past.

The challenge is not with the easily defined Hispanic stores; it’s with the stores that have a significant but not predominant Hispanic clientele. Retailers need to merchandise to make these shoppers comfortable, and one element of this involves responding to the day-part shopping that is frequently a part of the way Hispanic families buy their food.

James Carr
Guest
James Carr
11 years 5 months ago

In general, grocery retailers suffer from having some of the most inert cultures in American business. The firms are generally very focused on managing costs and wondering where the profits have gone. There are obvious exceptions: Whole Foods, Wegmans, Publix, Ukrops, etc. But in general, I think these companies still operate the “old fashioned way.”

Having said that, I was in Coachella, California the other day and came across a new Food 4 Less on Rt. 86. Wow! Somebody finally got it! There amidst a flock of Hispanic markets was this huge new store — totally devoted to the Hispanic customer — and packed with shoppers. Kudos to the folks at Kroger for figuring this out.

Is the culture at Kroger — America’s biggest, oldest dinosaur — finally changing? Are they weaving into their culture multiculturalism, or was this just a lucky guess? I guess we will find out if they decide to expand this format. My own skepticism and cynical bent says probably not. But something must have happened to cause them to approve this store. Anybody got any thoughts about this?

Ricardo Gomez
Guest
Ricardo Gomez
11 years 5 months ago

Scanner has the typical view of someone who just doesn’t get it. Marketing to Hispanics is of extreme importance to any retailer that wants to penetrate a unique growth opportunity. While the general market is growing older, the Hispanic consumer is younger. In the Coachela Valley alone they represent a $2-billion market. Moreover, with an estimated population of over 40 million Hispanic consumers (a third of which reside in California), any retailer that is NOT marketing to the Hispanic; will experience sales losses to retailers that are truly addressing this very important consumer segment. As John Cage once said: “If someone says ‘can’t’, that shows you what to do.”

Mark Burr
Guest
11 years 5 months ago

I really agree with Camille’s comments. I also agree with Bill’s comments to an extent. However, are there not other shoppers besides Hispanic that shop daily for food?

I really wonder if too much emphasis is placed on the Hispanic customer to the extent that it can become uncomfortable for them and other consumers.

Personally, I like not having to measure the race of the customer doing the shopping as much as I would rather measure the product going off the shelves. If, as a retailer, I am selling more of a particular product, does it really matter that is being purchased by one ethnic group or another? If in fact we’re really seeking to meet the needs of all of our customers, it really won’t make a difference.

Phillip T. Straniero
Guest
Phillip T. Straniero
11 years 5 months ago

My experience with Hispanic Marketing is from the CPG manufacturer side of the business. Our key metrics were mainly focused on share of market in Hispanic Markets as well as penetration into Hispanic households. Obviously there were ROI analyses conducted to understand the return on the marketing and trade investments but given the traditionally large family size and percentage of meals eaten at home, a longer term investment outlook with lower short-term returns should be part of the business plan.

Rupa Ranganathan
Guest
Rupa Ranganathan
11 years 5 months ago
Yes, I agree that measurement cannot have dual or multiple tones. It should stand the test of solid criteria laid out to determine ROI, be it Hispanic or Youth or any other segment. But I am not sure whether major players are operating in silos either. I’ll share with you a recent press release from St. Louis MO, “Continuing its significant commitment in the growing Latino community, Anheuser-Busch Inc. will increase its 2006 Latino media budget by 66 percent to more than $60 million.” Such a decision cannot be based on a different standard of metrics to evaluate ROI. In fact, much of this spend will go towards sponsorship of a sports program, product placements and other forms of engagement. Beyond advertising, today, investments in Hispanic Online marketing, direct-response marketing and grassroots event marketing have also gone up significantly. Clearly Hispanic marketing is becoming more integral to the overall marketing process, more than ever before. Toyota even aired their bilingual ad for this year’s Super Bowl. Finally, a landmark study by Carlos Santiago, of The Santiago Solutions Group, points to positive correlation between Hispanic market investments and shareholder equity. As the practice of Hispanic marketing evolves further, I am sure… Read more »
Gwen Kelly
Guest
Gwen Kelly
11 years 5 months ago

Camille Shuster’s comments are right on target. Last year, The Journal of Integrated Marketing Communications published an excellent article titled the “Multicultural Paradigm.” The author, J.P. James, presents an excellent case how marketers should take time to enhance their research efforts to better understand and reach ethnic consumers; ultimately, the brand measure for any segment is the strength of sales. And taking the added steps to truly understand the nuances of the ethnic consumer, in this discussion, the Hispanic consumer, will be a key advantage to the marketer who does the work and makes the investment. And with the Hispanic consumer market’s buying power estimated to reach $1 billion by 2010, what marketer would not want their share of this booming market?

Eva A. May
Guest
Eva A. May
11 years 5 months ago

I believe that companies should subject all marketing efforts to the same measurement standards. However, I have seen many companies unwilling to recognize that marketing efforts directed toward new targets will need to pass through the same brand building process that many of their brands or services passed through many years ago in the general market. While these brands were being developed in the general market, the demand for immediate ROI was much less stringent, as savvy marketers realized that building a brand required efforts that would not necessarily result in short-term profits, but would be worthwhile over the longer term. These days, many marketers forget that process when considering the merits of a Hispanic marketing program. Even when all strategic analysis factors indicate strong potential for success in the Hispanic marketplace, many marketers are unwilling to INVEST in the programs unless they can deliver short-term profits. And when their products are unknown in the Hispanic marketplace, they will need to invest in their brands the same way that they did when they launched their product in the US.

Race Cowgill
Guest
Race Cowgill
11 years 5 months ago
Great topic, Terry! Thanks for bringing up this issue. I believe I have seen evidence that suggests organizations have come to think that the Hispanic market is different in some fundamental way — that it doesn’t respond in conventional ways or that it has exotic and almost unfathomable expectations. It is almost as if the focus on just how different our many cultures are have made them seem alien. My own analysis suggests that the fundamental features of markets (segmentation, expectations met and unmet, etc.) applies to the Hispanic market too. Certainly it isn’t just a matter of understanding the Hispanic market, but creating organizational systems that efficiently track and meet those needs. I don’t mean to minimize the need to effectively serve the Hispanic market, but in my view, the real problem is that retail has a very difficult time, and needlessly so, serving ANY of its markets. And an even bigger issue is that retail has trouble confronting this basic problem. The score we have calculated for how well retail as a whole meets its customers’ needs is 62%; but when we ask individual retail organizations how well they serve their target markets’ needs, the average of all… Read more »
Camille P. Schuster, PhD.
BrainTrust

An organization focused on consumer demand organizes itself around valuable consumers by understanding those valuable consumers, integrates back door functions to make it easy for those consumers to do business, and monitors the results of those consumers. If Hispanic consumers are valuable consumers, they why should the organization react any differently?

Mark Lilien
Guest
11 years 5 months ago

There may be geographic locations where the Hispanic target audience is minimal, so the work related to a Hispanic campaign would be wasted. Most retailers are exquisitely sensitive to cost issues, so the extra training and measurement wouldn’t be appreciated.

John Lingnofski
Guest
John Lingnofski
11 years 5 months ago

An interesting corollary also seems to be occurring — at least in my supermarket. As the ethnic aisles (Hispanic and Asian) have expanded, an increasing number of the long-time established Anglo customers are buying ethnic foods. It’s been interesting to observe how items we consider to be ethnic are showing up regularly now in so-called mainstream shopping carts.

Dan Stiel
Guest
Dan Stiel
11 years 5 months ago

The golden rule of metrics applies: You can’t manage what you can’t measure!

Steve Gomez
Guest
Steve Gomez
11 years 4 months ago
For Mr. Carr and his observations regarding Food4Less, you are more correct than you think. Kroger is not getting it quite yet but they are still allowing the local Food4Less management in L.A. to design and roll-out their format. This will change soon as consolidation seems to be more important than customer focus. Time will soon tell what happens next. On the subject of metrics, my experience in CPG indicates that the Hispanic syndicated data is just not there! Neither of the big data guys supplies total market Hispanic share data to assess the market share of a product against Food, Drug, and Mass. This data would also let them know what percentage of their business in each market is attributed to Hispanic consumers. Without this share data, marketers at headquarters have no ‘good’ data to make financial investment decisions with so they will always be hesitant to spend significant dollars. That is why we see a lot of Hispanic ‘testing’ going on but very few dedicated efforts. Once ACNielsen and IRI can provide ethnic product share data, then we can count on more investment. In L.A. alone, even though Hispanics represent 45% of the population, most CPG companies cannot… Read more »
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