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Building a Business Case for the Ethnic Markets: “ Servicing a Broadening Customer Base”

Building a Business Case for the Ethnic Markets: “ Servicing a Broadening Customer Base”. What’s happening in the demographic U.S. U.S. Population: 295,292,828. Hispanic Population : 42,850,201 (14.51%) African-American Population : 38,123,935 (12.91%) Asian-American Population :

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Building a Business Case for the Ethnic Markets: “ Servicing a Broadening Customer Base”

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  1. Building a Business Case for the Ethnic Markets:“Servicing a Broadening Customer Base”

  2. What’s happening in the demographic U.S.

  3. U.S. Population: 295,292,828 • Hispanic Population: • 42,850,201 (14.51%) • African-American Population: • 38,123,935 (12.91%) • Asian-American Population: • 13,249,051 (4.5%) Source: U.S. Bureau of the Census, August 2005

  4. U.S. Population by Race

  5. Households by Race

  6. Median Income by Race

  7. Hispanic Demographics

  8. Population by Race and Hispanic Origin National Origin of Diversity • Mexican – oldest, newest, nearest, most dispersed, increasing diversity • Puerto Rican – dual nationality, citizenship, urban concentration • Central Americans – refugees, nationality pockets, proximity to Mexicans • Cuban – multiple waves, generational shifts • South American – Peruvians, Colombians, etc. • Others - New Mexico, Colorado, Texas, Arizona, Dominican enclaves Source: Current Population Survey, 2005

  9. Total U.S. & Hispanic Population for Top Twenty U.S. Markets Source: U.S. Bureau of the Census, 2005 Series

  10. Demographics Younger population than US overall: • 2/3 of Hispanic Population (19 million) are less than 35 years old. • 38.7% are under the age of 20 • By 2010, nearly 18 million Hispanics will • be in the 25-44 age group.

  11. Asian Demographics

  12. Asian-American Demographics U.S. Population: 295,292,828 Asian-American Population: 13,249,051 Asian-American Population as a Percent of Total U.S. Population: 4.5% Source: U.S. Bureau of the Census, 2005

  13. Population by Race and Asian Origin U.S. Bureau of the Census, 2005

  14. Asian-American Demographics • 52% of Asian households are owner-occupied (Census 2005) • Asian/ Pacific Islanders have the highest median home values of any group in the U.S. • Asian/ Pacific Islander median home value in the Western U.S. is 86% higher than the median value for all homes in the West. Source: U.S. Bureau of the Census, 2005

  15. Asian-American Demographics Asian households are the most likely of all groups (includingWhite households) to be in the $75K or above income range Source: U.S. Bureau of the Census, 2005

  16. Total U.S. & Asian Population for Top Twenty U.S. Markets Source: U.S. Bureau of the Census, 2005

  17. African-American Demographics

  18. African-American Demographics U.S. Population: 295,292,828 African-American Population: 38,123,935 African-American Population as a Percent of Total U.S. Population: 12.91% Source: U.S. Bureau of the Census, 2005

  19. African-American Population for Top Twenty U.S. Markets Source: U.S. Bureau of the Census, 2005

  20. Buying Power

  21. Buying Power Consumer-buying power in this segment will triple what it was in 1990, indicating major economic strides among Asians, African-Americans and Hispanics, according to a the University of Georgia Selig Center.

  22. African-American Buying Power African-Americans buying power will rise from $316.5 billion in 1990 to $723 billion in 2004, and to $965 billion in 2009. A 203% increase over 19 years 1990 2004 2009$316.5 $723$965

  23. Asian Buying Power Asian buying power will rise from $117.6 billion in 1990 to $363 billion in 2004, and to $528 billion in 2009 . A 347% increase over 19 years. 1990 2004 2009$117.6 $363$528

  24. Hispanic Buying Power Hispanic buying power will rise from $223 billion in 1990 to $686 billion in 2004, to $992 billion in 2009. A 347% increase over 19 years 1990 2004 2009$223 $686 $992

  25. Emerging Opportunities

  26. Emerging Opportunities Children and young adults account for nearly half of the EM population. The next generation- “The children of immigrants” • Are avid media consumers, • Comfortable with computers and • Connected to the Internet

  27. E-merging Opportunities - Hispanics Internet usage among Hispanics jumped 7.4% in 2004 after an 8% rise in 2003. Source: emarketer 2004

  28. E-merging Opportunities - Hispanics It is projected that 13.3 million Hispanics were surfing the Internet in 2004, up from 12.4 million in 2003 and 8.7 million in 2000. Source: emarketer 2004

  29. E-merging Opportunities - Asians By comparison, the number of Asian Internet users rose to 6.7 % in 2004. Source: emarketer 2004

  30. E-merging Opportunities – African-American African-American surfers increased by 5.7% in 2004.

  31. E-merging Opportunities – White White Internet users increased by 4.2%

  32. 5 Simple Rules to Reaching the Ethnic Markets

  33. Rule No. 1: Integration is the key! In the past, the process for reaching multicultural markets was often limited to one dimensional efforts such as the literal translations of general market campaigns. Todayorganizations are developing new products designed specifically to meet the needs of this new America. Companies are: • Creating separate multicultural departments • Allocating marketing budgets by segment, • And most important, setting measurable goals for each segment. Source: 2004 Public Relations Tactics. Via ProQuest Information and Learning Company

  34. Culturally Diverse Companies… • Implement an integrated year-round out reach campaign to the ethnic markets. • Provide high level customer service in multiple languages from end-to-end. • Become valuable corporate citizens in the ethnic communities. • Offer culturally relevant products and services at competitive prices. Source: Valle, F.J., Madel, J.M., (2003) How to win the Hispanic Gold Rush

  35. Rule No. 2: Do your research! It may cost you a little upfront, but it is critical to your success. Carefully study your market and its relationship with your product or services prior to launching a diversity initiative. Understanding the cultural nuances of a market before you start is important. Don’t assume everyone who speaks Spanish is Mexican and everyone Asian is Chinese Source: 2004 Public Relations Tactics. Via ProQuest Information and Learning Company

  36. Rule No. 3:Cultural Connectivity! Cultural Connectivity is the ability to reach a consumer through their cultural context. A few cultural connectors to consider include: • Values • Community • Religion • Lifestyles • Ethnicity • Race • Sexual orientation • Country of origin • Degree of acculturation • Language ` The goal is to connect in an intimate way with both communities and individual simultaneously through effective cultural context. Source: 2004 Public Relations Tactics. Via ProQuest Information and Learning Company

  37. Rule No. 3: Cultural Connectivity! • Do new ethnic customers receive a welcome or thank you written in their language at the time service is delivered? • Does your brokerage or firm conduct post-closing satisfaction surveys with ethnic customers? • Is diversity a strategic objective in your business or strategic plan? • Is there a senior level position with the proper authority to implement this initiative? Source: Valle, F.J., Madel, J.M., (2003) How to win the Hispanic Gold Rush

  38. Rule No. 4: Perception is Reality! How communities see a company is how an individual will see the company. This basic marketing concept is critically important to the multiethnic landscape. Many successful companies launch cause related PR strategies that put the ethnic community and its needs at the center of its communications. Source: 2004 Public Relations Tactics. Via ProQuest Information and Learning Company

  39. Freddie Mac

  40. Fidelity National Title – www.fidelityhouston.com

  41. Fidelity National Title – www.micasaenhouston.com

  42. Fidelity National Title – www.micasaenhouston.com

  43. Rule No. 4: Perception is Reality! The best way to conduct these efforts with credibility is to partner with national or local ethnic organizations (i.e. AREAA, NAHREP, and NAHREB) Source: 2004 Public Relations Tactics. Via ProQuest Information and Learning Company

  44. Rule No. 5: Partner with the experts! Don’t try and go it alone. When planning a campaign, identify the appropriate resources and consider hiring an agency. Lastly, Identify a multilingual spokesperson who can champion and be the voice for the initiative. Source: 2004 Public Relations Tactics. Via ProQuest Information and Learning Company

  45. Building Diversity Into Your Business Model

  46. Building This Emerged Market Into Your Business Model • Through a referral arrangement • Recruiting an agent at a time • Keep tabs on agents on the other side of your transactions • Buying a company and merging it into your existing operation • Merging disparate cultures • Buying a company or a joint venture and leaving it as a stand alone • Bring more than money to the table

  47. Hispanic Business Magazine – October 2005

  48. Diversity Checklist The only way to know if a diversity initiative is effective is to monitor and evaluate it. • What is being expended on the initiative? • What is the return? • How many more customers were gained? • What is the company’s market share and penetration? • What elements of the campaign worked well and which did not? Source: Valle, F.J., Madel, J.M., (2003) How to win the Hispanic Gold Rush

  49. Your emerging market initiative success will ultimately be determined by: Your effectiveness in developing and being able to offer culturally relevant products and services. Your ability to brand products and implement culturally relevant marketing strategies. Your skill in providing a high level of customer service in multiple languages. Your aggressiveness in positioning and pricing quality products. The Bottom Line Source: Valle, F.J., Madel, J.M., (2003) How to win the Hispanic Gold Rush

  50. It’s about…….. Building your economic as well as your social equity with Ethnic homebuyers!

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