Smart consumer businesses are unanimous on the critical
importance of “multicultural” growth opportunities. In the U.S., this is
especially true now that Millennials
— about 43% of whom are not white, according to Pew Research—make up a growing
slice of most consumer markets. And it will be even more important for the
generation that follows the Millennials; in 2011, non-Hispanic white births dipped under 50% for the
first time.
Yet companies still cling to misconceptions about how to market to consumers of
different racial and ethnic backgrounds, and their strategies aren’t evolving
as quickly as they should. The most significant misstep: Most multicultural
strategies and analysis still view consumers mainly via demographics — are you
ethnic or not — instead of really trying to understand demand.
Assuming that certain ethnic demographics form the
primary market for certain products results in missed opportunities at best —
and sometimes it’s just flat-out
wrong.
Consider a few examples. Suburban white men consume
80% of hip hop music, even though it’s typically considered a genre aimed at
young, urban black Americans. Misconceptions like this aren’t limited to
American markets. The Korean soap opera My Love From the Star, for example, has
200 times more views in China than Korea. This last fact was so alarming that China’s
highest governing bodies met in Beijing last year to discuss the reasons why
Chinese viewers display such high demand for non-Chinese shows.
And this doesn’t just apply to media. We’ve all
heard that salsa is more popular than ketchup (in terms of money spent, if not
volume), but the people doing most of the buying probably aren’t who you’d
think. In previous posts, I’ve written about the concept of superconsumers —
people who buy a disproportionate
amount of a particular product. In the salsa category, Nielsen data shows that superconsumers are
an important market — in fact, the top 10% of salsa consumers drive 50% percent
of salsa sales. Interestingly, only 13% of salsa superconsumers are Hispanic.
This means there are 5 million households buying lots of salsa
who are white. Closer analysis shows they are more
than just salsa superconsumers: These same white households also buy more than
$1 billion dollars of other Hispanic food products.
Latino households in the U.S. are estimated at 20
million. If there are 5 million white superconsumers of Latino cultural
products, is it possible that the market is understated by 25%? If that’s true, it’s a huge
opportunity.
For managers, the implications are clear:
First, we need to look beyond demographics. Most
likely the markets for all products we think of as culturally specific are understated by a
significant amount, which should have big implications for resource allocation.
Second, culture is a choice and not a birthright. Culture, at
its core, is a
shared passion for distinct common experience. Sports, music, food, fashion,
and hobbies are all culture. The currency of culture is how and where you spend
your time and money. Ethnicity is not an exclusive passport that lets you in or
keeps you out of a culture.
Given that culture is a choice, everyone — the
white majority included — can choose to opt in. And while it is fine to share your
culture, be careful not to superimpose
it on others. As Korean American immigrant from Hawaii, I’ve felt a subtle yet
strong pressure from “western business culture” to fake a passion for fine wine
and French food, because that’s what well-educated professionals in America are
supposed to enjoy consuming. But I didn’t grow up with these things, and I have
other preferences. It wasn’t until I saw this as culture and a choice that I
felt comfortable saying I enjoyed fermented Kim
Chi as much as a
fine French reduction.
For those of us who are minorities, recognizing
that culture is a choice means being more inclusive. Authenticity is great, but adaptation can be great
too. Everyone has the right to travel into new cultures should they choose to.
And we as minorities should welcome them (and their dollars) in.
The best place to reach consumers who are
multicultural in demand, not just
demographics, may be in majority minority cities and markets.
Just as superconsumers have a network effect on those around them, living near
a large ethnic group has a big influence on what you watch and buy.
The bottom line is that a demographics-based view
of culture is far less profitable than a demand-based view. As you create
culturally specific products, TV programs, and marketing plans, make sure you’re not leaving money on the
table.
authenticity
adaption
demographics
leave money on the table
fermented
kim chi
opt in
superimpose
core
birthright
implication
understated
implications
household
disproportionate
alarming
flat out
misconceptions
cling to
Nelson data
dipped
millennial
unanimous
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