"Multiculti” is not just another buzzword or market du jour. Racial and ethnic minorities number about 100 million (or one-third) of the United States population, and are growing at a clip that far outpaces the general market.

 

Hispanics (44.8 million), African-Americans (40.6 million) and Asian-Americans (14.8 million) are the largest “diversity” groups, and all three groups are expected to grow more rapidly than non-minorities through 2020, when about 40% of the US population is expected to be a member of one of today’s minority groups. Data show that in 2020, 18.9% of the US population will be Hispanic – and Latinos are expected to continue to be the largest minority group through 2050.

 

Historically, much market research glossed over immigrants and minority ethnic groups. For example, a telephone survey would be conducted only in English, even though the majority of Hispanics are Spanish dominant.

 

But today, one out of every seven US residents is Hispanic — and though there are clear linguistic and cultural similarities, there is incredible diversity within the Hispanic community.

 

Everett Hernandez, Senior Vice President and general manager for Synovate Diversity, says that the biggest challenge most companies face still lies in understanding Hispanic consumers and marketing in a language that they can truly understand.

 

“They think it’s a GM [general market] consumer speaking Spanish,” Hernandez says. “Many manufacturers are loyal but never truly committed.”

 

Marketers of some products and services haven’t done their research to truly understand the nuances between, say, recent arrivals from Mexico living in LA, third-generation Argentines in New York and Cubans in Miami who still intend to return to the island post-Castro. But the highly acculturated third-generationArgentines are likely to be English-dominant and have spending habits that mirror the general market. And the unacculturated Mexicans may be interested in remittance services to send money home or pre-paid cellular services that are more similar to what unacculturated Asians are looking for.

 

Ideally, multicultural market research should be used as a tool to answer business needs or questions. As Hernandez puts it, “Marketers just don’t know what they don’t know.” Here’s a glance at some of the key data and perspective about the largest diversity markets in the US.

 

HISPANICS

 

The incredibly rapid population growth in the Hispanic community has grabbed the attention of every company with a product or service to market. Back in 1950, the four million Hispanics living in the US represented just 2.6% of the country’s total population. Their numbers have jumped eleven-fold, and in the past six years alone the Hispanic population has grown by about 4.1%, establishing them as the largest minority group (surpassing African-Americans for the first time). Various factors have contributed to this vibrant growth, especially:

•    Continued immigration from Mexico and Central America — about two-thirds of all foreign-born Hispanic adults are 
from Mexico.
•    Increased immigration from South America since 2000.
•    Continued residence of undocumented and migrant labourers — after 9/11 border security was temporarily tightened.
•    Birth of new children among US-born and immigrant Hispanics. Just over half of Hispanic population growth is attributable to births.

 

A third of the US Hispanic population (nearly 15 million), lives in just three markets: Los Angeles, New York City and Miami, with 8.4, 4.4 and 2.1 million, respectively. The top 10 markets represent 57% of the Hispanic population; the top 50 markets comprise 89% of the total Hispanic population.

 

Overseas, research often takes a very localised approach that is specific to a region or city, while in the US the reach is more likely to be national or even global. Whether market research originates in the US and heads down to Latin America or vice versa, respect for differences such as culture, language, research suppliers and standards are paramount.

AFRICAN-AMERICANS

 

Until recently, Blacks represented the largest minority group in the United States. In 1950, there were one in 10 Black Americans; today, one in eight is. Growth, steady at about 1.3% per year, is largely due to increased immigration from the African diaspora, especially from Jamaica, Haiti and Belize. While 8% of Blacks in the US overall are foreign-born, new arrivals are disproportionately young: 12% of foreign-born Blacks are between the ages of 18 and 34.

 

 Back in the 1980s, Run-DMC’s “My Adidas” and L.L. Cool J’s Kangol hats fuelled the success of those brands. When Snoop Doggy Dogg wore a Tommy Hilfiger outfit while rapping on Saturday Night Live in 1994, the brand quickly shed its preppy image and realised an estimated additional US$90 million in profits that year.

 

Brett Wright, CEO of Nu America (an agency whose expertise and focus is urban African Americans and Latino markets), says that some brands have had such significant growth by using cultural musical drivers that “some would argue music replaced sports endorsees and to some extent, even film stars... The most influential... are the music artists, who have huge visibility via music videos and print. The way to do it is to associate the product with those artists.”

 

“The market has grown up tremendously,” says Emmett Harrell, the founder of hip-hop clothing label Akademiks. “With all the focus on the urban market, we need to get on the next wave: basics, classics, bringing back the prep look. There are trendsetters, tier one; people who are catching up, the hardcore hip-hop consumers, tier two; and a more conservative, cleaner look, tier three. We try to find something for the trendsetter. If we catch their eye, tiers two and three will follow.”

ASIAN-AMERICANS

 

Five groups — Chinese, Filipino, Asian Indian, Vietnamese and Korean — represent about 80% of the Asian population in the US; about one quarter of Asians in America are of Chinese descent.

 

Wade Guang of InterTrend Communications Inc (an agency that helps corporate America target the Asian American segments) says that while many brands try to take advantage of running ads during Chinese New Year, few do any in-language marketing during other times of the year.

Guang notes that a lot of advertisers have been in and out of Asian American markets, and sees that sporadic interest as missed opportunity. “Not a lot of retailers are doing a lot for this market; they always pick the Lunar New Year to show their goodwill. But that time is very cluttered — it’s like the general market during Christmas, which gets very crowded.”