¿Se Habla Español?

If you don't already, it's time to start. Tapping the Latino market could translate to increased sales.
Magazine Contributor
3 min read

This story appears in the June 2003 issue of Entrepreneur. Subscribe »

The Latino market is an entrepreneur's dream. With economic clout expected to reach a whopping $926 billion by the end of 2007, the Latino market's buying power will soon outstrip that of all other ethnic groups in the United States.

Historically, marketers have been drawn to this segment due to its size--there are 33 million Latino consumers here in the United States. But now, a crop of new studies validates the long-held belief that the Latino market represents more than sheer buying power. A strong tendency toward higher-than-average brand loyalty characterizes this group, making them prized long-term customers. In fact, a 2002 survey by Research Data Design showed that 85 percent are willing to pay more for quality and prefer to buy a more expensive but trusted brand rather than a less expensive but unfamiliar one. And 94 percent of Latinos are likely to buy a brand that provides the best customer service.

As a whole, the Latino market is young. According to the results of the 2002 Census, over 60 percent of Latinos in this country are under age 28--and they tend to reside in larger family groups. Latino households are more likely to be comprised of couples with children under age 18, and they often include extended families with three wage earners.

This tendency toward larger families with young children means Latinos buy more household goods. According to one DRI/McGraw-Hill study, Latinos will drive nearly one-fifth of the growth in apparel and shoe sales and about one-third of the growth in food sales through 2005. Entrepreneurs marketing everything from baby care and health and beauty products to home furnishings and entertainment can benefit from targeting this group. Just take a cue from video rental giant Blockbuster, which has converted 1,000 of its domestic stores into "Latino-themed" centers, where signage and products are displayed in Spanish.

With these demographics in mind, here are some key marketing tips:

  • Speak the language. Advertising in Spanish is important, even among bilingual Latinos--it's a matter of cultural identity and pride. Advertisers who use Spanish-language advertising and media, including Web sites, build customer loyalty because they're perceived as understanding and relating to the Latino community. A recent study by the Roslow Research Group found that commercials in Spanish were three times more persuasive among bilingual Latinos and six times more persuasive among Spanish-dominant segments. Among Latino teens, ads in Spanish were twice as persuasive as ads in English.
  • Recognize diversity. It's a mistake to treat Cuban, Puerto Rican, Mexican and Central and South American immigrants alike, because family size, education and income levels differ. For example, Mexicans have the largest families and Cubans the smallest. There are language differences as well. In Puerto Rico, beans are "habichuelas," but in Central America they're "frijoles." When creating your Spanish-language campaign, it's a good idea to use an agency that specializes in Latino marketing. The Association of Hispanic Advertising Agencies offers a searchable database of agencies. Proceed carefully. Even a well-known product name or slogan may need to be modified. When the American Dairy Association wanted to extend the popular "Got Milk?" campaign into Mexico, it found the Spanish translation was "Are you lactating?"
  • Support community values. Campaigns that appear to denigrate parental authority or family unity should be avoided. Word-of-mouth plays a vital role, too, so grass-roots PR and community events-such as supporting local festivals-should be included as part of your well-rounded marketing strategy.
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