Marketing to Multicultural Consumers

CU360
April 22, 2010 | COMMENTS

In an era of fluid national borders, advertising that appeals to cultural and ethnic identity has become a vital part of the marketing arsenal. But new research developed by the University of Pennsylvania 's Wharton Business School shows how ethnic-oriented marketing can backfire and even turn multicultural consumers against a product or service.

The research findings have implications for marketers focused on consumer target marketing. Immigrants, including Hispanics, Asians, and others, are expected to change the multicultural mix of key consumer markets for generations to come. As the multicultural population grows, it will gain economic clout:

• More than half of all U.S. families with children will be multicultural by 2025, according to The Nielsen Company.
• The buying power of Hispanic and Asian Americans is predicted to increase 40% between 2009 and 2012, reaching more than $2 trillion.

"It's no secret that the demographics are changing drastically, and what's considered a majority or a minority population is going to be in flux over the next five to 15 years," says Wharton marketing professor Americus Reed. "It's incumbent on marketers to address these differences."

To do that, marketers need to understand the complex issues that contribute to people's sense of identity, including their upbringing, their cultural programming, and the symbolic cues they identify with.

Bicultural consumers—those with roots in two distinct cultures—have two cultural models as part of their identities. The model they relate to most changes in different situations and with different cues. Responses to marketing messages can vary tremendously among first-, second-, or third-generation members of the same ethnic group.

In the past, many advertisers thought of ethnic or cultural background as a "bucket" in which to put individuals. Advertisers would take survey data—from, say, the U.S. Census—in which individuals simply checked boxes that best described their cultural or ethnic background.

But assigning individuals to an ethnic bucket can be arbitrary and a clumsy approach to target marketing. As advertisers attempt to reach out to a particular ethnic group, they can come on too strong with a message, and alienate the consumers they're trying to attract.

Consider an advertisement that Taco Bell ran with a talking Chihuahua saying, "I love Taco Bell" in Spanish. However well that played to a broader audience, the fast-food chain offended some Hispanic consumers, who felt the ad was a derogatory stereotype. "It was too overt," says Reed. "It was not done in a tasteful way and there was a backlash."

Companies attempting to design bicultural marketing campaigns walk a fine line. "They have to construct persuasive communication in a way that doesn't trivialize ethnic affiliation, but does not become so watered down that it doesn't speak to either dimension," notes Reed.

Ethnic marketing campaigns demand a certain sense of subtlety. People with dual identities are acutely aware of marketers trying to reach out to them on the basis of cultural identity. If the marketer overdoes it, the message smacks of pandering and can be dismissed as a calculating attempt to profit from cultural values and heritage.

This article was orginally published online by CU360, an online portal for benchmarking tools, market insights, industry data, and analytical information at cu360.cuna.org. Reprinted with permission.