BrainTrust Query: What’s the best approach for marketing to Asian Americans?

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Sep 08, 2006
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By David Morse, President and CEO, New American Dimensions, LLC

(www.newamericandimensions.com)


Packaged Facts has just released a new report on the Asian American market called Asian Americans in the U.S.


It’s a comprehensive analysis of data from multiple sources including the Census Bureau and other government agencies, Simmons’ 2005 National Consumer Surveys (NCS) for kids and teens as well as adults, plus information collected from firms active in the Asian American market. Some highlights:


  • There were 12.7 million Asian Americans in 2005. That’s a lot of growth, especially considering that in 1970 there were less than a million. Between 2000 and 2005, this population grew by 19.8 percent (the Hispanic population grew by 20.9 percent). Nearly half of Asians live in either California or New York.

  • Chinese make up the largest subgroup of Asians (23 percent), followed by Asian Indians and Filipinos. The two fastest growing subgroups are Pakistanis and Asian Indians, which grew by 36 percent and 34 percent respectively between 2000 and 2005.

  • As a group, Asian Americans are educated and affluent. Nearly half have a bachelor’s degree or more and they are the most likely group to work in managerial or professional jobs (46 percent compared to 38 percent of non-Hispanic Whites). The median income of Asian American households is 26 percent higher than the average. Still, there are disparities between different ethnic groups. For instance, the per capita income for Asian Indians and Japanese is about $31k per year. For Vietnamese, it’s less than $20k.

  • Though still a largely immigrant population – immigrants accounted for 67 percent of Asian American population growth between 2000 and 2005 – more than four out of five Asian Americans five years old or over are English speakers.

  • Compared to the average American consumer, Asian Americans are more frequent shoppers, more driven by bargains, and more likely to pay attention to advertising. They over-index in credit cards, allocate more of their budgets to designer clothing, are health conscious about food and have a preference for prescription medicine carrying a brand name. Not surprisingly, Asian Americans are big consumers of electronics, and are far more likely than the average consumer to say they keep up with developments in technology.

Discussion Questions: What can brands do better to attract Asian American consumers? Is it best to target Asians by subgroup, or will they respond to
General Market advertising?


In a 2005 Washington Post article, Robert J. Thompson, director of the Center for the Study of Popular Television, posed three questions to marketers
looking at the Asian American market: “Are you appealing to the homesick person who spent a good portion of their life in Japan or China? Are you appealing to the second generation
who has been partially assimilated? Or are you trying to appeal to a wider audience?” Ultimately, how you answer these questions determines which approach you should take.


The Packaged Facts report highlights several companies, including Wal-Mart, Anheuser-Busch, Kraft, MetLife and Toyota, who have developed successful marketing
strategies geared toward Asian American consumers. Some, like MetLife, have focused on multiple segments of the Asian American community. Others market to specific groups, such
as Chinese or Koreans. Few have marketed to Asian Americans as a group, the way they have with Hispanics. After all, with a few prominent exceptions, like Brazil and Haiti, most
Latin Americans hail from Spanish speaking countries; Asians speak a myriad of languages.


But it may be that the real future of Asian marketing is with English. For instance, the Packaged Facts report points out that 78 percent of foreign-born
Asians speak English, compared to only 52 percent of foreign-born Latinos. The Made in America studies by New American Dimensions have shown that only about half
of 2nd generation Asians speak an Asian language, compared to three-quarters of their Hispanic counterparts that speak Spanish.


Few would deny that Asian Americans acculturate quickly. One of the most convincing measures is the high rate of Asian intermarriage, particularly among
the U.S. born. A 1998 study found that 40 percent of U.S. born Asians were married to people of a different ethnic group, and that nearly 80 percent of these marriages were to
partners of a different race. The 2006 New American Dimensions study found that among single Asians that were U.S. born, two-thirds date interracially, and only 45 percent indicated
that they intended to marry another Asian.


Many U.S. born Asians, like Hispanics, undergo a return to their ethnic roots, a process called retro or re-acculturation. To quote a January article in
Time magazine, today’s young Asian Americans often follow “the path of a boomerang: early isolation, rapid immersion and assimilation, and then a re-appreciation of ethnic
roots.” The surging Asian influence in American popular culture, as evidenced by sensations like manga, anime, the import car scene, Asian music and Bollywood movies, is likely
to be accompanied by a growing desire among Asian Americans to see themselves represented both in Hollywood and on Madison Avenue.

Click for more information about Packaged Facts and the report: Asian Americans
in the U.S.

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8 Comments on "BrainTrust Query: What’s the best approach for marketing to Asian Americans?"


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Ryan Mathews
Guest
14 years 6 months ago

This isn’t a simple answer. Again — as with any ethnic group — labels sometimes do more damage than good. There is a huge difference between somebody who’s Chinese and whose great-great grandfather built the railroad across the U.S. and somebody who just immigrated from Hong Kong. Also, Asian is a broad macro-racial description that covers an enormous amount of diversity, even if we’re just speaking about immigrants. Maybe the American Pork Producers could create an effective ad for a Chinese audience but I doubt it would be nearly as effective on an audience made up of Muslim Pakistanis.

Mark Lilien
Guest
14 years 6 months ago

The easiest way to target Asians is simply to target the better educated and affluent, since Asians are more likely to be in those categories. Bricks and mortar retailers certainly know the ethnic makeup of their trading areas, and if the concentration is significant, can tailor their positioning appropriately. It’s no coincidence that car dealers in Bergen County New Jersey hire bilingual salespeople. The local Honda and Lexus staff speak Korean and English.

Bill Robinson
Guest
Bill Robinson
14 years 6 months ago
When is someone going to point out the obvious? Asians are not a homogeneous group. Japanese are dramatically different than Koreans. Just ask one. Same for Vietnamese, Chinese, Burmese, and Filipinos. The same observation is true for Hispanics. Cubans are Cubans, not Hispanics. Same for Dominicans, Mexicans, Columbians, etc. despite the fact that they share a same language, Spanish. This obvious fact will soon frustrate any attempt to market to Asians as a segment — no matter how large, fast growing, or how much purchasing power. For retailers, the trick is to learn when there are concentrations of people of the same national origins live or work near your store. Then, develop the right mix of promotion, product, and pricing that will attract this group. Tune your business intelligence systems and feedback to know which customers are from what national origins. Study their market baskets. Develop reports that show you how they respond to certain promotions or products. They’ll shop at your store as Koreans, or Filipinos — not as Asians.
W. Frank Dell II
Guest
14 years 6 months ago

I see Asian marketing following the more successful Hispanic model. In areas where there are one or two segments, then the marketing/merchandising programs should match the consumer segments. When there are many segments, then a more general approach should be used. The best example I have seen recently is in the new Grade A store in our town. They call it the International Aisle. Sections are identified by country. Customers were observed shopping only their country of origin.

Stephan Kouzomis
Guest
Stephan Kouzomis
14 years 6 months ago

Ryan is right on. Additionally, spend some time in neighborhood Asian shops to gain a feel of the shopping pattern and needs – and verbal exchange.

Given the location of the grocery outlets, neighborhood population and its possible segments come into play.

Of course, market segmentation is your catalyst, with multiple sub groups. The marketer must decide on the market potential and availability of different Asian speaking employees – and the brands’ availability.

Where is the local Asian distributor? Hmmmmmmmmm

Robert Chan
Guest
Robert Chan
14 years 6 months ago

On food items, major grocery retailers should look at Ranch 99 and Mariner Supermarket in California (the Asian grocery chains). Not only do they carry multi-ethnic foods, prices are overall at least 35% less than Safeway and all major American grocery chains, for the same brands. Caucasians shop there also and they are always packed to the rim, as compared with slow traffic in Safeway or Von’s. Variety and traffic volume make up for the slim margins. (One can have high margin but, if there is no traffic, one is still doomed.)

On the non-food items such as clothes, Asians are very brand conscious. Target them with upscale items with competitive prices; same for cars and household items.

Rochelle Newman-Carrasco
Guest
Rochelle Newman-Carrasco
14 years 6 months ago

As with all ethnic or cultural segmentation, it’s a plus to target as specifically and authentically as possible. This does not mean that the audience (in this case “Asian” and all the sub groups that implies) won’t be effected by so-called General Market advertising. However, there are things you can do in-culture that are far more powerful than generic messaging designed for mass audiences. It’s not about Asians, it’s about understanding consumer commonalities and where the most opportunity lies for lasting consumer engagement.

Kai Clarke
Guest
14 years 6 months ago

Target Marketing through product market differentiation is a proven way to clearly communicate with unique segments. This should include different segments, regardless of what they represent. However, general advertising holds value since it delivers a mainstream message which can be better communicated to consumers who are not necessarily in the target market segment. A dual-pronged approach ensures that the product message is clearly communicated, while maximizing the marketing effectiveness and spend.

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