- Multicultural Market Insight
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Most U.S. banks, Financial Services and Insurance Businesses, unlike many media, retail and grocery companies, have avoided marketing their products and services specifically to the Multicultural consumers. This made sense since the majority of the 50+ million Hispanics and the 40+ million African Americans, the two largest of the groups, who live in the United States typically spend less than the average U.S. consumer on financial services but more on groceries, retail goods and media. Sidestepping the Multicultural market made sense to financial institutions, until now.
With economic recovery on a slow rebound, financial institutions could be missing out on a huge opportunity. By 2012, spending by Multicultural Consumers living in the United States will have risen to more than $2 Trillion a year, from around $1.5 Trillion, with financial services accounting for a substantial part of that increase. Industries that currently cater to the Multicultural markets benefit conspicuously from the growing population. However, some industries such as housing, health care, and financial services that target middle and upper-income consumers are likely to benefit significantly as Multicultural consumers household incomes rise.
To succeed in this diverse market, banks and insurance companies will have to do more than translate their brochures into different languages. They could benefit from the lessons learned by other consumer product marketers. In courting the Multicultural consumer, financial-services companies must not only attract a new customer segment but also change its buying behavior. Financial institutions will have to educate these consumers about such products as mortgages, investments and insurance. Companies can implement techniques such as using multicultural faces in your campaign creative in order to increase the rapport between your organization and your audience or adjusting color preferences and graphic presentation forms to increase the effectiveness of your website presentation. To achieve a competitive edge in campaigns, marketers must understand the cultural differences and lifestyle characteristics of Hispanic versus Asian versus African, etc.
The incomes and assimilation levels of Multicultural consumers vary widely. Banks should offer a choice of products at every rung of the ladder: from inexpensive services like international wire transfers and check cashing targeted at recent immigrants, to mortgages and insurance products geared toward the emerging middle class, to the full portfolio of financial services for second- and third-generation Multicultural consumers.
Clustering all Multicultural consumers in one large category is not the proper approach since many different groups compose that market. Nonetheless, there are trends that can be highlighted. For example, purchase decisions among many Hispanics are driven by familiarity or lack of familiarity with brands. The bulk of Hispanic consumers, particularly those who are Spanish dominant buy products and services that they recognize and know something about. Marketing to the Hispanic consumer has at its core the establishment of a relationship between the seller and the buyer. Hispanics are particularly sensitive to the establishment and maintenance of that relationship.
The Hispanic consumer is generally more sensitive to offers that are acceptable to family and friends as a good decision. We see both individual and external attributes that drive the decisions differently within this segment. Product and offer attributes such as price and availability and perceptual attributes such as quality, benefits, and cultural sensitivity are obviously key drivers in the purchase decision. After all, businesses cannot reap the rewards from this segment unless they understand and target it.
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