From the March 1997 issue of Startups

Focus in on the markets you've been missing to broaden your business's horizons.

You've probably seen those ads showing cookies, cupcakes or a peanut butter sandwich, with the caption: "Got milk?" Those ads boosted milk sales in the first quarter of 1996 by 9.5 percent over the same period in 1995. An attempt was also made to increase milk consumption in the Hispanic community by launching a "Got milk?" campaign in Spanish-language media. Apparently, however, the creator of the initial Spanish-language ads had a limited grasp of the culture. The phrase "Got milk?" was literally translated as "¿Tiene leche?" But "¿Tiene leche?" doesn't exactly mean "Got milk?" in the way the advertiser intended. "¿Tiene leche?" is roughly translated as "Are you breast-feeding?" Fortunately, the milk producers came up with a better approach for the Spanish-language market. Their current ads show a family group, with the caption, "¿Y usted, les dio suficiente leche hoy? (Have you given them enough milk today?)"

As this story shows, multicultural marketing is not simple. Note that the milk producers' successful ads did more than merely translate the English-language ads into grammatically correct Spanish. They used an entirely different approach to the consumer. Consider the subtext of the two ads: the comedic English-language ads appeal to a sense of anxiety about the self: "What if I lose a $10,000 radio quiz question about Aaron Burr because my mouth is full of peanut butter and I don't have a glass of milk? What if the senior citizens' group I'm entertaining attacks me because I didn't bring them milk to go with their cookies?" The Spanish-language ad, on the other hand, appeals to a mother's sense of responsibility for her family: "Have I taken good care of the people who depend on me?" The person who created this ad understood who does the buying in the Hispanic community and what's important to them.

You'll probably hear more stories like this as the Hispanic, Native American, Asian-Pacific, and African-American populations of the United States grow. You, as an entrepreneur, need to be aware of the issues involved in multicultural marketing: The ethnic market is $785 billion strong in buying power and growing. Consider our example of the Hispanic market: "It's one of the most overlooked and misunderstood retail markets--and the one with the most buying potential," says Jack Kyser, chief economist for the Los Angeles County Economic Development Corp. The rewards for effectively marketing to this group can be great, as is shown by the success of the Vons Grocery Co. of California.

Vons, a chain of approximately 180 stores, found a big hole in their market: Ten years ago, there were 4.5 million Hispanic customers in their service area, but only a few independent grocery stores to serve them. Generally, a small selection of Hispanic foods would be displayed in a supermarket's "ethnic foods" aisle, competing for space with Kosher and Asian foods. Bill Davila, the president of Vons, was well aware of the potential in selling to the Hispanic community. Accordingly, in 1987, Vons announced the opening of Tianguis Markets, billed as "100% Hispanic supermarkets." With in-store tortillerias (small shops selling fresh tortillas), and produce sections filled with the fruits and vegetables used in Mexican cooking, Tianguis (the name comes from the Aztec word for marketplace) was an immediate success. Vons showed a significant increase in sales within two years after the first Tianguis opened, and increased sales with the opening of each new Tianguis location.

The first piece of advice any new businessperson usually receives is: "Know your market." But how do you get to know your market if you don't speak their language or share their cultural heritage? A growing number of consultants are available to advise businesses on multicultural marketing. But if you decide that hiring a consultant is not for you, here are some things you can do on your own:

1. Become familiar with the cultures with which you will be working. "Read publications like Hispanic Business News, Black Enterprise, and TransPacific, as well as publications for the Native American community, such as Native Peoples," advises Barbara Deane of the GilDeane Group in Seattle, which publishes Diversity Marketing Outlook and Cultural Diversity at Work. "What are they talking about? What are their needs?"

Reading the ads in ethnic publications will tell you what your competitors are doing, as well as give you some idea of what appeals to different groups. What attributes of the product or service being advertised are underscored? Is it the pleasure the consumer gains from using it, or the pleasure the product will provide to the consumer's loved ones? Do advertisements emphasize personalized service or efficient service? Are they stressing the reliability of familiar brands? Looking analytically at the ads will tell you what people are buying and why.

There are a number of sources that can tell you what the market potential is for different groups, and what cultural differences you should keep in mind. Where do you find them? Do library research. "For example, the Hispanic Market Handbook is full of information," says Deane. "The American Marketing Association has done some studies. Look in the magazine Marketing News. Some companies are developing research databases on ethnic markets."

Many colleges and universities now offer continuing-education classes in cultural diversity and global business. Many entrepreneurial programs, such as UCLA's Executive Education program, often include components on cultural diversity. Find out what's available in your area. Don't overlook any potential source of information on your market.

2. Learn what you can about your specific product or service in various cultures. In many Asian cultures, the concept of feng shui, the art of designing a physical environment that promotes a sense of harmony and well-being, is important. If you're in real estate, you should be aware that a house at the end of a cul-de-sac in a neighborhood with a large Asian-American population is not likely to sell for what you might expect. The negative energy on the street is presumed to flow toward the end of the cul-de-sac; a building located there would have more than its share of bad luck, which would discourage prospective buyers. Also, many Asian-American households consist of extended families, and two-story homes with a downstairs bedroom and bathroom for the elderly members of the family will sell better. If you're in construction, you should be aware that Asian clients may prefer bathrooms with the commode in an area separate from the sink and tub, and kitchens that can accommodate woks and have extra-strong ventilation systems to direct the vapor from stir-fried dishes away from the living area. This kind of specialized information can be found in trade publications, such as Progressive Grocer, Chilton's Hardware Age, Beverage Industry and Footwear News, which have all featured stories on targeting ethnic consumers.

3. Appreciate the diversity within groups as well as among groups. Terms like "Hispanic" and "Asian" are frequently used without acknowledging the wide variety of peoples such terms include. "Asian" can refer to any one of hundreds of nationalities, language groups and cultures.

Entrepreneurs need to be aware that what appeals to Chinese-Americans in California may have little appeal for Korean-Americans in New York, although they are all Asian-Americans. New York Life Insurance learned this the hard way when their ad campaign, targeted toward Korean-Americans, failed when they used ads featuring Chinese-American models.

Recognizing the variety within groups may also help you to utilize employees appropriately. The management of the Great Gorge Resort in New Jersey initially assumed that the large contingent of Asian-American skiiers came from the large Chinatown area of nearby New York City. A survey, however, revealed that 80 percent of these clients were actually Korean-American. They were then able to hire Korean-speaking employees to better serve their clientele.

Even within the same cultural group, there can be differences which must be taken into account. Arab-American Christians and Arab-American Moslems may coexist peacefully, but that does not mean that one group will be effective in marketing to the other. There may be differences, for instance, in how familiar your employees are with the culture (for example, employees raised outside their ethnic communities may be unfamiliar with some aspects of their own culture); in how strongly they are influenced by mainstream U.S. culture; and in how great the gap is between the social class of your employee and your clientele (for example, African-Americans from a middle-class background may not be able to market effectively to working-class African-Americans). These differences may have a significant impact on the ability of members of the same culture to communicate. Knowledgeable entrepreneurs don't just target the entire Hispanic market, they target that portion of the Hispanic market most likely to be interested in their product or service.

4. Be prepared to rethink what you believe you know about marketing. Successful marketing in ethnic communities often means going against conventional wisdom. "Main Street"-type business districts, with independent store-front retailers who offer highly personalized service, are supposedly relics of the past--we all go to the mall nowadays. But merchants in Southern California have done well by recreating "Main Street" business districts (as can still be found in Latin American cities) to serve Hispanic neighborhoods. For example, businesses in the Pacific Boulevard shopping area of Huntington Park, California, reported total sales of $87 million in 1995, the latest year for which there are complete figures.

This brings up another point: We previously thought that there was no money to be made in inner cities. But these areas may have a stronger business base than is popularly imagined. After the 1992 riots, South Central Los Angeles was characterized as a high-unemployment area. While there is certainly unemployment, and many of the positions in the area do not pay high wages, the Los Angeles County Economic Development Corp. reports that there are currently more than 350,000 jobs in South Central--more than in the sleek high-rises of downtown Los Angeles.

One particular neighborhood, Baldwin Hills, has the highest per-capita disposable income in Los Angeles, according to Haagen Property Management, which develops and manages the Baldwin Hills/Crenshaw Plaza shopping mall. The Top Valu/Valu Plus supermarket chain's 14 stores sell $200 million annually in low-income neighborhoods. Their average sales are $800 to $850 per square foot, as compared to $350 to $400 for major chain markets. Even businesses specializing in big-ticket items that are usually sold on credit can thrive in less affluent areas. Central Stores, which sells appliances and furniture in low-income, primarily immigrant neighborhoods, reports annual sales of $100 million and has opened seven new stores since 1990. An inner-city location may just be the best place for your business.

Gone are the days when businesses could succeed with a "one size fits all" approach to marketing. It's a "mass market" no longer. The multicultural market is where the opportunities are, and successful entrepreneurs are quickly learning how to get there.


Rhonda Albey is a diversity consultant with Allen Associates in Los Angeles. She is a member of the Los Angeles County Diversity Advisory Committee, and an instructor at the University of Phoenix in Southern California.

Contact Sources

Collins Center For Executive Education, 110 Westwood Plaza, Ste. #A101D, Box 951464, Los Angeles, CA 90095-1464, (310) 825-2001.

The Gildeane Group, 13751 Lake City Way NE, #106, Seattle, WA 98125-8612, (206) 362-0336.