Setting Hispanic Market Share Objectives? Look Beyond Market Population.
By Terry J. Soto, President & CEO, About Marketing Solutions, Inc.
No doubt, you have been bombarded by population numbers that speak to the enormity of the Hispanic marketplace. But what does that mean to your ability to grow market share among these consumers? In some cases, very little. Why? Because market population numbers do not consider where those Hispanics are geographically concentrated vis-à-vis your distribution channels or those of your competition.
When assessing market share opportunities, it is critical you know where the entire Hispanic market is concentrated, not just in areas where you have locations. This is where you must start, followed by mapping where your competition is located in relation.
Once you understand your competitive situation, you’ll want to map how you fit into the equation. This will highlight the following: 1) whether or not your locations are in areas where Hispanics live, 2) whether your competition is located in areas where Hispanics live, 3) the relative strength or weakness of the competitive set with which you compete in each trading area, 4) market presence gaps in areas where Hispanics live, but where you do not have locations, 5) coverage gaps where you do not have presence and your competition does.
Then you will want to know how many Hispanics live in the trading areas where you have locations and how many live where you don’t. You will also need to know this for each competitor. Once you have this information, you can add up the population for each of your and your competitor’s locations. You now have the total Hispanic market population.
When you take each of those numbers and divide them by the total geography you have the proportion of market reach/access to your retail brand and the same for your competition. What you will find is that, while a market may be 35 percent Hispanic, your Hispanic population opportunity is only 15 percent. If your competition’s opportunity number is higher, you will find yourself at a competitive disadvantage from a market presence/reach perspective. Then again, the opposite may be true or you may find yourself at parity. The bottom line is that your Hispanic population opportunity is never equal to the market population.
When you look at physical market presence and the Hispanic market potential versus your competition, you can set more realistic market share goals. You are also in a position to calibrate marketing expectations and determine the efficiency and role of mass versus grassroots efforts, especially if you want to aggressively compete for and protect customer share in areas where competitive threats are stronger. Lastly, you’re in a position to assess your presence gaps and develop channel expansion strategies to increase your reach in the market. An assessment of viable options may shed light into alternate distribution models that are relevant yet not as capital intensive.
Moderator’s Comment: How big a role should Hispanic-targeted marketing and consumer segmentation play in a retailer’s overall competitive strategy?
Effective retail Hispanic market strategy development requires detailed upfront assessment of your market presence situation and your competitive environment.
Not only will it ensure the right metrics, it is a key pillar for developing marketing strategies that can positively impact your specific market advantages or minimize competitive
disadvantages. Separately, consumer segmentation, trade area concentration benchmarks, and competitive gap analysis are other key assessment pillars for developing market strategies
for product assortment, merchandising, and staffing. –
Terry J. Soto – Moderator