UP AND DOWN THE STREET
Using POP to Reach Hispanic Shoppers
The increasing popularity of snack flavors such as Jalapeno, Salsa Verde, Picante, Tequila and Lime, Nacho, and Habanero is one indication that the growing U.S. Hispanic population — now 38 million, or 14% of the total U.S. population — has impacted the snack food market. Another is the interest by food manufacturers in marketing to the U.S. Hispanic population, especially in regions where a higher percent of Hispanics live. Seventy-six percent of U.S. Hispanics live in Texas, New York, Florida, Illinois, California and New Jersey. Hispanics are concentrated in metro areas, with nearly half living in the inner city. Although persons of Mexican origin dominate this group in the U.S., the number of those from Central and South America is growing and should not be ignored by marketers.
According to Carlos Garcia, president and CEO of Garcia Research, Burbank, Calif., the first step in marketing to Hispanics is to understand the buying habits and preferences of a demographic whose buying power is estimated to be around $650 billion. Speaking at The POP Show, sponsored by the In-Store Marketing Institute, in September, Garcia explained that advertising puts a product or service in a favorable context within the Hispanic frame of reference. Advertising also helps with the acculturation process and affects cultural values. Acculturation is the process of adapting to a new culture, learning its ways, and learning how to function in and possibly thrive in that culture.
In preparation for his presentation at The POP Show, Garcia conducted research that involved focus groups among both non-acculturated and acculturated Hispanic consumers. It also included two telephone surveys (in Spanish), one with 476 respondents and the other with 701. The survey included males and females, aged 18 to 65, with the final sample closely matching U.S. Census Bureau figures for Hispanic ethnicity and geographic density.
Garcia surveyed cultural values, since they are the ideals by which people live. The cultural values listed as most important by survey participants were family unity, generosity, community with Hispanics, respect for elders, and morality and decency. Good manners become more important with longer U.S. residency, which Garcia advised is important to remember when marketing to Hispanics.
The survey included questions on the impact of in-store displays and other shopping patterns. Only women were asked about shopping patterns, because women do the majority of food shopping among Hispanics. Garcia found that lower-income shoppers are most likely to use small or corner markets, while those with the highest income are most likely to use warehouse stores. Those who have lived in the U.S. the longest are most likely to use supermarkets. Of the respondents, 82% use some form of coupons, with 55% bringing coupons from home.
Participants in the survey were asked about the impact of POP displays on their more recent trip to purchase foods. The findings included the following information:
48% of respondents purchased a product from a POP display
POP users bought from an average of two POP displays
Racks in the aisle get the most attention
Higher-income shoppers show more usage of racks and front displays
The longer participants lived in the U.S., the more likely they were to use racks and end-of-aisle displays.
Hispanic consumers are most likely to use aisle racks over other types of POP displays; however, they often buy products from these racks that they would normally purchase anyway. Garcia recommends the use of aisle racks to develop and maintain loyalty, but cautions that they are not a good way to encourage Hispanics to become first-time users. Shelf-talkers also reach current customers. To encourage first-time purchases, the survey found that end-of-aisle displays work well. Additionally, although front displays have the lowest overall impact on Hispanic consumers, they are the best at causing first-time purchases.
The survey included a question on why purchases were made from POP displays. Price was the major driver behind purchases from racks in aisles and for purchases resulting from shelf-talkers. For end-of-aisle displays and front displays, curiosity and price are equal drivers.
The survey also found, not surprisingly, that Hispanic shoppers want larger packages and value packs, and they like bright colors. In the focus groups, they always picked the saltiest, the sweetest or the crunchiest products. In other words, noted Garcia, they will pick extremes.
Garcia concluded by emphasizing the importance of U.S. Hispanics to marketers. “The Hispanic market is the new mainstream,” he said.
For those interested in the Hispanic market, SFA will present the 5th annual Latin American program (completely in Spanish) at SNAXPO 2005, March 12 in Hollywood, Fla.
For more information, go to www.sfa.org.