Hispanic Marketing 2.0: What enterprise-wide marketing needs

Posted by Elena del Valle on July 30, 2008

By Stephen Palacios, executive vice president, Cheskin Added Value

Stephen Palacios, executive vice president, Cheskin Added Value

Photo: Cheskin

Few would argue that traditionally, Hispanic or multicultural marketing has been given second-tier status in corporations. While business is now coming to terms with the growing size and influence of these segments, separate corporate departments and both internal and external infrastructures are still the norm.

However, current trends in marketing in response to the ever increasing fractionalization of the consumer market, mass customization and exploding media options should force us to question our current organizational structures. Businesses need to acknowledge that the segment expertise intrinsic to Hispanic and multicultural marketing is relevant on a much larger corporate scale.

Let’s take a look at why the evolution of Hispanic marketing and Hispanic markets has created the optimal foundation for segment marketing competence.

Fueled by the growing strength of the market, both in terms of spending power and consumer population, corporate America has spent the past 8 years coming to grips with a market too large to ignore. Many major and minor corporations have been going through various stages in building Hispanic market competency:

Stage 1: Skepticism.

This is the stage where early on, corporations were not sure that a distinct market opportunity existed with the Hispanic market. There was little valid data pre-2000 Census, and even post 2000 Census, a sophisticated understanding of Hispanic segments, category behavior, channel preference, and brand affinity was based as much on myth as social science. In this stage, marketers relied on “experts” – those who had a keen professional interest in the development of the Hispanic market (and often a social or political interest as well) to interpret what was possible. This era was characterized by calculated risks, small bets, or pioneering ingenuity with a “prove it” mentality from senior management. Resources were measured and often subject to elimination when corporate priorities shifted.

Stage 2: Exuberance.

As the business environment was generally good (2002 – 2007), companies had the ability to finance new initiatives. An explosion of new infrastructure and information started to enter the market. The absolute number and scale of Hispanic agencies grew dramatically.. A new crop of specialists, focused on “alternative channels” like Bodegas and Superindependent stores was created. Sub-specialties in Hispanic marketing, believable market data, and national media outlets consolidated in broadcast, print and radio, emerged to provide large corporate marketers the ability to solve for historical limitations of a fractured marketplace. Now, reach and frequency were achievable. Corporations responded by pouring more marketing dollars than ever before into this area (fueling Hispanic advertising growth at double digits each year) and corporate organizational competencies grew. Multicultural marketing found a home – either as a stand alone unit, or as a compulsory mandated effort within a business unit, or some hybrid of these two. Proctor and Gamble signaled the commitment by creating a dedicated Hispanic marketing organizational competency, and funding it to levels heretofore never seen in the market, outspending all others.

This growth did not come without its challenges. Finding qualified Hispanic marketing talent was difficult. Hispanic agencies and corporate marketers would search internationally to attract more senior talent, or would repurpose employees from Diversity or other functional areas.. Many Hispanic agency planners were as “gringo” as their general marketing agency counterparts. This inevitably caused growing pains as new organizational structures, new processes, and new marketing initiatives were started and talent could not match opportunity.

Stage 3: Calibration and Innovation.

It seems now, in 2008 and beyond, we are moving to a new stage. One that perhaps will take into account all of the recent market maturation and will result in a more realistic and sophisticated application of corporate resources to the Hispanic opportunity. The Hispanic market itself is changing, inescapably being influenced by, and increasingly influencing, the so-called “General Market.” Marketers have the opportunity and responsibility to create a Hispanic Marketing 2.0 platform with better information and market data, increasing talent levels, greater case study evidence of market success and failure, and tried and tested organizational structures.

The net result of this, I believe, will be a re-definition of Hispanic marketing. The shift will be from niche marketing to creating enterprise-wide competencies in segment marketing. Hispanic marketing forces marketers to think differently and create new competencies in the realm of segment marketing – competencies such as new metrics of evaluation, micro-geographic targeting, store specific POS, micro-merchandising, new transactional models, culturally distinct service models, linguistically specific communications, and even target specific credit-worthiness.

Without mentioning multicultural marketing, a recent Ad Age article, “Consumer Chasm: Distance widening between consumer types,” highlights this issue:

“The emergence of the title of chief marketing officer elevated the marketing function to a level of importance equal to that of finance and the chief financial officer. Within the C-suite, we may see the creation of a new position under the CMO: consumer-segments communicator.

That person will be the one who keeps everyone in the firm up to speed on the different and fast-changing channels through which each segment of consumers can be most efficiently reached, queried and persuaded.”

Successful companies will realize that their Hispanic marketing efforts should be redefined to shift the entire enterprise toward the direction of segment marketing – it is a pathway to customer intimacy. To be successful, companies will have to raise their game, using Hispanic marketing for short term marketplace business results, but also as a platform for enterprise-wide innovation.

Stephen Palacios oversees the company’s non tech client accounts and leads the Cheskin Hispanic market practice group. He frequently speaks nationally about the U.S. Hispanic market. This article was published with his permission.