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Many brands are at a similar impasse, investing significant resources in the quest to become authentic Hispanic brands. But they end up stuck in the middle, unable to connect with this demographic group and undifferentiated against competition. Why?
At the most basic level, one explanation is the tendency of marketers to approach Hispanics as a single group when, in fact, there are a variety of fundamental differences within it. Fortunately, an increasing number of businesses are realizing this and are exploring ways to segment the Hispanic market. A basic Google search, for example, reveals a handful of segmenting variables that are being used today. While they are a good starting point, these variables are less than ideal. Here’s why:
• Generation: Many believe Hispanic attitudes and behavior are generation-dictated. Not necessarily. While differences exist among first- and second-generation Hispanics, common attitudes can bridge the gap among generations. In our experience, regardless of generation, customer segments that share a hectic lifestyle are willing to pay for products and/or services that help them simplify their lives.
• Country of origin: While country of origin can influence culture, beliefs and opinions, there are enough similarities to assist in cross-country segmentation. Why should a Mexican think differently than a Venezuelan when buying a car or a home? Country of origin is probably more effective in profiling customers rather than segmenting them.
• Orientation toward family: Many ads targeted at Hispanics depict a big family celebration, as some marketers think that all Hispanics are family oriented. In fact, while there are segments that are defined by their family ties, others are more motivated by a different set of values, such as the level of service they receive during the shopping experience.
• Importance of brand: Another fallacy is that Hispanics tend to buy based on brand recognition, preferring what they already know to minimize risk. This isn’t universally true. As in any demographic group, a segment exists that actively looks for and purchases new products and services—the early adopters. Not all Hispanics are risk-averse.
• Product usage: A Goya manager once said, “In Latin America we are united by the language and separated by the bean,” implying that customers can be effectively segmented by what they buy. Segmenting via purchase behavior, however, presents an incomplete picture and produces a segmentation solution that is not stable over time. Think about segmenting customers in the cell phone category based on what product they currently use. This segmentation solution would change every six months and thus hinder the creation of strategies that work over time. Marketers need to understand the motivation for why customers choose the model they do.
• Language: Another popular notion is that English-language ads are less effective than Spanish-language ads in reaching this group. Reaching customers in their preferred language is necessary, but not sufficient to be successful. The most critical issue is identifying the type of message that resonates best with Hispanic segments. Finding the right vehicle and language should flow from there.
Marketers are challenged to evolve their thinking about the Hispanic market in a way that will result in segments that are differentiated, meaningful, accessible and stable over time. While the actual variables differ among categories, these most likely will cover not just demographics, but also needs, attitudes and purchase behaviors. In the food category, for example, variables such as cooking involvement, the need for simplification, the balance between taste and health, and social reassurance are critical to understanding how Hispanic customers approach food and the role it plays in their lives.
Back to Goya. One of the characteristics of top-performing companies is that they evolve to sustain their leadership position. Goya is no exception. It recently launched a set of new products that respond to customer needs for convenience and health. As part of this effort, Goya partnered with the American Diabetes Association to revise some of its recipes to be more appropriate for individuals with diabetes. In commenting on the initiative, Goya said: “Offering healthy choices is a natural progression for Goya Foods and is in keeping with our commitment to producing the best-tasting, highest quality food for our customers.”
There was no mention of generation or country of origin—just a genuine, differentiated response to customer needs. That’s why Goya will evolve from big to great.
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