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Hispanic 101 — An Immersion

Hispanic 101 — An Immersion. January 2004 . Three Key Themes. Size & Growth The U.S. consumer landscape will never be the same Complexity Demographic, language and cultural issues elements call for customized marketing efforts Financial Business Rewards

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Hispanic 101 — An Immersion

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  1. Hispanic 101 —An Immersion January 2004

  2. Three Key Themes • Size & Growth • The U.S. consumer landscape will never be the same • Complexity • Demographic, language and cultural issues elements call for customized marketing efforts • Financial Business Rewards • Hispanics’ income growth and purchasing power represent a significant business growth opportunity

  3. Size Growth Composition Distribution Age Households Language Usage Spanish Ad Effectiveness Income & Buying Power Media Dynamics Segmentation: A Mix Of Lifestyles And Life Stages Contents

  4. 1990 2002 Size 68% growth in one decade;largest U.S. Minority segment Source: U.S. Census Bureau

  5. Size Formulation of a “new America” is evident 2000 2050 Source: U.S. Census Bureau

  6. Size Diversity exists even within the Hispanic community • South American • Argentinean • Bolivian • Chilean • Colombian • Ecuadorian • Paraguayan • Peruvian • Uruguayan • Venezuelan • Central American • Costa Rican • Guatemalan • Honduran • Nicaraguan • Panamanian • Salvadorian Source: U.S. Census Bureau, July 2002 Estimate March 2002 Current Population Survey

  7. Size Comparable in size to key demographic groups embraced by the marketing community Source: Census 2000 * July 1, 2002 Population Estimates

  8. Foreign Born Population Year of Entry U.S. Born vs. Foreign Born Size Majority are foreign born and have been in the U.S. less than 20 years 73% Source: Census 2000 Summary File 3. Foreign Born Population Table 8.1: March 2000.

  9. Growth Growth throughout the entire U.S. Source: U.S. Census Bureau

  10. Growth The new Hispanic emerging markets % Growth 1990-2000 2000 Populations >50,000 Source: William H. Frey analysis of 2000 Census

  11. Growth Why the continued immigration & migration?... • Labor demand in the U.S. • Weak economy in country of origin • Political/social instability • Ties with U.S. residents

  12. 61.4 million 43.7 million 38.8 million 22.4 million Growth Projected to grow 68% by 2025 millions Source: Populations Projections Program, Population Division, U.S. Census Bureau. Consistent with the 1990 estimates base.

  13. Growth The 4th largest market in the Spanish-speaking world... …Second by 2025 Population (millions) 20022025 (proj.) • Mexico 101.7 131.7 • Colombia 43.8 59.7 • Spain 41.3 44.3 • U.S. Hispanics 38.8 61.4 • Argentina 36.5 47.2 • Peru 26.7 35.7 • Venezuela 25.1 34.8 • Chile 15.6 19.5 • Ecuador 13.0 18.5 • Cuba 11.3 11.8 Source: Population Reference Bureau, 2002 Population Data Sheet and U.S. Department of Commerce News June 18, 2003 Release

  14. Composition On Average, the Top 20 Hispanic markets have a 17% Hispanic penetration Source: A.C. Nielsen

  15. Hispanic % of Total Persons (2+) Composition Hispanics are the market in top DMA’s Source: Nielsen 2003 Universe Estimates (Top 15 Hispanic Markets)

  16. Geographically concentrated: ¾ of Hispanics reside in the Top 20 DMA’s Distribution Base: U.S. Hispanics Adults Source: Scarborough USA+ Release 2, 2002

  17. Distribution Even more concentrated than the general population Source: Scarborough USA+ Release 2, 2002

  18. Age — National A significant portion of key consumer segments Kids 2-11 Teens 12-17 Adults 18-34 Adults 18-49 All P2+ Adults 50+ Source: A.C. Nielsen

  19. Age — Top 10 Markets A crucial portion of key Kids and Teens segments on a market-by-market level Source: A.C. Nielsen

  20. Hispanic Median Age: 27 HH Size: 3.6 Total US Median Age: 37 HH Size: 2.4 Households Younger, and larger HH’s Source: A.C. Nielsen

  21. Born here; Parents born here Born here; Parents outside U.S. Born outside U.S.; ½ of life here & ½ of life there Born outside U.S.; ¼-½ of life here Born outside U.S.; less then ¼ of life here Households A mix of individuals

  22. Households Over-index versus Non-Hispanics on children in the HH Source: U.S. Census Bureau

  23. Households Leisure activities enjoyed are different based on acculturation level Source: People en Español, 2003

  24. United States Calvinist Values Democracy Vietnam Individual (Me/mine/my) Sibling Rivalry Youth & “Fun” Stable economy “No Wrinkles Tomorrow” Latin America Catholic Values Aspiring Democracies No Vietnam Group (We/our/us) Sibling Cooperation Maturity & “Diversión” Fluctuating economies “Look Good Tonight” • Households Differing value systems Source: TNS Market Development

  25. United States Kennedy, Nixon, King Bay of Pigs Equal Rights Amendment Freedom Fighters Woodstock Washington Post/ Watergate B.Friedan, K. Vonnegut, J. Kerouac British Invasion, Hendrix, Morrison W.Chamberlin, Ali, H.Aaron Latin America Castro, Allende, Che Guevara Bay of Pigs Instability, Drug Cartels, Inflation Coup d’etats White Collar Corruption Political Activist Literature O. Paz, G.G. Marquez, P. Neruda El Puma, J. Iglesias, E.Guzman Pelé, R.Duran, R.Clemente • Households Life experiences colored by different milestones Source: TNS Market Development

  26. Language Usage Majority of adults speak Spanish to some degree 92% Source: A.C. Nielsen

  27. Language Usage Use of Spanish will continue • 2/3 were born outside the US • Continuing immigration • Preservation of cultural identity • Geographic concentration • Ease of travel and telecommunications

  28. Language Usage Hispanics speak Spanish at home regardless of education, age or HHI HH Income Education Age Source: NHTI Installed Metered Sample, Feb 2002; Excludes English Only Homes; Based on % of Persons Living in HH’s that Speak Some Spanish

  29. Spanish Ad Effectiveness Roslow Research Group 1994 and 2000 Document relative effectiveness of Spanish vs. English commercials among Hispanics • Awareness • Comprehension • Persuasiveness Source: Roslow Research Group, 2000

  30. Among Bilingual Hispanics, Spanish commercials are 3.4 times more persuasive Spanish Ad Effectiveness Spanish-language commercials are... • 61% more effective at increasing Awareness • 57% more effective in message Comprehension • 4.5x more Persuasive Source: Roslow Research Group, 2000

  31. Spanish Ad Effectiveness Spanish ads work best Index to Total Hispanic Adults. Base =Spanish Dependent Adults with Bank Account, but no checking or debit card accounts. Source: Simmons Hispanic Study 2001

  32. Income & Buying Power Income level growing faster than population AVG.+56% AVG. +39% Source: A.C. Nielsen, Selig Center

  33. Income & Buying Power Hispanic HH’s have shifted from lower to middle and higher income brackets Source: U.S. Census, “Money Income in the U.S.: 2001”

  34. Income & Buying Power Buying power will approach $1.2 trillion by 2012 Source: Global Insight

  35. Income & Buying Power While whites account for the majority of consumer spending, their share is dwindling Note: Figures add to more than 100% because Hispanics can be of any race Source: Selig Center for Economic Growth, University of Georgia

  36. Income & Buying Power Recent Hispanic HH spending dynamics show largest increases were in services-related categories Source: “The Hispanic Buying Power Report, 2002”, Target Market News

  37. Income & Buying Power Growth of “affluent” Hispanic HH’s outpacing general community • Estimated at 3.7 million • Nearly two-thirds reside in CA, TX, NY • Combined buying power of $292.4 billion by 2006 • Many are small business owners that reinvest in family businesses “Affluent” = $100,000+ HH Income Source: Merrill Lynch, 2003

  38. Media Dynamics English networks under deliver Hispanics *% Hispanic based on (000’s) Source: A.C. Nielsen, Sep-Nov 2003

  39. Media Dynamics Top programs continue to be on Spanish • 1992 season had 14 on English Source: A.C. Nielsen, Sep-Nov 2003

  40. Media Dynamics A very different list of top advertisers Source: HispanicBusiness Magazine 2002

  41. Media Dynamics Nearly half of Hispanic advertising dollars are on a local market basis Source: HispanicBusiness Magazine 2002

  42. Segmentation Background • Developed by Yankelovich in partnership with Cheskin • 1,200 in person interviews, P16+ • Seven top + three emerging markets • Spanish and English interviews • Weighted for population

  43. Segmentation The market can be visualized as falling into 12 segments based on Life Stage categories

  44. Segmentation Acculturation Definitions • Hispanic Dominant • Persons closest to the culture of their country of origin • Choose to retain as much of their Hispanic culture, language and values as possible • Bicultural • Persons that desire to retain as much as possible of their Hispanic culture, while adopting aspects of U.S. Anglo culture as well • Assimilated • Persons who have moved away from their Hispanic culture to adopt U.S. Anglo culture, language and family values • Culturally Unique • Persons not yet arrived

  45. Segmentation The Segments Defined

  46. Segmentation Young Progressives

  47. Segmentation Home Builders

  48. Segmentation Hearth Hearted

  49. Segmentation Prime of Life

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