Editor's note: M. Isabel Valdes is president of Hispanic Market Connections Inc., Los Altos, Calif. This article draws from works previously published, presentations made at conferences and from material compiled for the Handbook on Marketing to Hispanics, co-authored with Dr. Marta Seoane.

The U.S. Hispanic market has grown exponentially during the past two decades to become one of the largest and wealthiest consumer markets in the Latin American world, a trend that is expected to continue well into the 21st century. The historical development of the U.S. Hispanic market - multinationalities juxtaposed to a powerful Anglo-Saxon culture - has created a distinct and complex society within a society. The U.S. Hispanic consumer market is constantly undergoing an acculturation process, where among others, language preferences (Spanish, English or both) values and media usage patterns challenge traditional methods to target mono-lingual Latin American markets. Hence it is not recommended to extrapolate from research, marketing or advertising experiences in Latin America to the United States.

To target this lucrative and growing market, marketers and advertisers must rely on marketing research tools that provide data reflecting the unique and ever- changing mindset of the U.S. Hispanics.

This article presents a language-based segmentation developed for this purpose by Hispanic Market Connections, Inc. (HMC), Los Altos, Calif. Utilizing language questions and demographic data, Hispanic consumers are grouped into four groups: "Spanish-dominant/dependent," "Spanish-preferred/bilinguals," "True bilinguals," and "English-preferred/English-dominants."

A rapidly growing and highly diverse market

Hispanics are expected to become the largest non-Anglo, or minority, group in the U.S. in as little as 15 years.
According to the 1990 U.S. Census Bureau, there are 22.4 million Hispanics residing in the United States. This growth represents a 53 percent increase over the 1980 population figures of 14.6 million. This increase represents more than five times the growth rate of the total U.S. population. These figures, despite being the final "official" 1990 population estimates, under-represent the actual population size of the Hispanic population, as stated by the Bureau of the Census. The Bureau's own post enumeration survey of the 1990 census proposes adding 1.2 million more Hispanics. The actual figures may be still higher because: 1) accurate counts of the Hispanic population are difficult to obtain; 2) because there are anywhere from two to six million undocumented Hispanics, and finally, 3) because the U.S. Census figures do not include some 3.5 million Hispanics who live in Puerto Rico.

One of the major reasons for these rapid growth rates is that Hispanics have higher birth rates than the rest of the U.S. population. Another factor is that both legal and illegal immigration from Spanish-speaking countries continues at a rapid pace. Due to the traditionally higher birth rates in the Latin American countries and because the Hispanic population tends to be younger (26 is the median age compared to 32 for the total U.S. population), the high birth rates are unlikely to slow down in the near future.

The result is a very dynamic consumer market where new Hispanic immigrants are mixed together with consumers whose ancestors have resided for several generations in the U.S., each with vastly different experiences, lifestyles and historic background. Non-U.S.-born Hispanics and second generation Hispanics presently compose the largest demographic based group for the U.S. Hispanic market. These two segments are expected to fuel its growth in the foreseeable future.

Adding to the market diversity resulting from the growing immigration is the multinational background of the U.S. Hispanic market. Mexicans compose 60.4 percent of the total U.S. Hispanic market, Puerto Ricans 12.2 percent, Cubans 4.7 percent and other nationalities 22.7 percent. Within the latter group, the largest segments are composed of Salvadorans and Costa Ricans. Consumers from all other Latin American countries are represented in the "other" category.

As is to be expected, successful marketing to the U.S. Hispanic market presents unusual challenges. Marketing and marketing research must take into account not only the U.S. business and market contexts but also the unique dynamics of the U.S. Hispanic market and the acculturation process affecting these Latin American consumers. Certainly some common denominators are present in terms of cultural heritage, such as the Spanish language, values and lifestyles. But again, these as well as other behaviors are in constant change, affected by the impact of the acculturation process.

The acculturation process

Acculturation is defined as "The process of integration of native and traditional values with the dominant culture's values." With the newly arrived individuals at one end of the acculturation road, and the U.S.-born multigenerational Hispanic consumers at the other, the degree of assimilation can vary drastically. (Assimilation assumes a total adoption of the host country's values and forms of interactions, at all levels in society, inside the household as well as the macro level or ideologically.) The acculturation process is a phenomenon unique to the U.S. Hispanic market. No other Latin American consumer is in such constant re-examination and confrontation with their own culture.

More acculturated individuals tend to reflect the Anglo-American value orientation; the less acculturated tend to identify with the traditional Hispanic value orientation. The acculturation process, a subject in and of its own, takes place to varying degrees depending on a myriad of variables and factors. These range from external factors, such as the concentration of Hispanics in the place of residence, to internal factors, such as particular individual personality traits. These factors help speed up or slow down the acculturation process; they either facilitate or add barriers to the full integration and participation in American society.

For example, an obvious example is the degree of fluency in English upon arrival in the U.S. English language proficiency greatly facilitates interaction with Anglo Americans and American mainstream media, exposing the new immigrant to the host country's culture, value system, etc. Lack of English language skills on the other hand, not only limits the immigrants' level, quality, type and amount of interaction with American culture, but also their labor opportunities, and overall insertion in American society. Knowledge of English language acts as a catalyst in terms of exposure to, and interaction with, a different culture, that correlates to a significant degree with the level of acculturation of a person.

A note of caution: language proficiency alone is by no means the only factor that determines acculturation rate but it tends to be an excellent predictor of degree of acculturation. Language is but the tip of the iceberg in terms of culture and cultural identity. Many other factors and variables affect this ongoing process.

Acculturation models that take into account socio- psychological and value-sensitive variables in addition to language usage are better predictors of acculturation effects in purchase intent and other specific products and services. These tend to be costly to develop and implement. Hence, the language-based segmentation is a good starting point to marketing and marketing research in the U.S. Hispanic market.

A language-based segmentation

The present language proficiency-based segmentation was developed by HMC utilizing the data from two very large studies with the California Hispanic population. This segmentation has been very useful in the determination of acculturation status and its impact on product and service familiarity, awareness, usage, switching behavior, tracking studies and others. The language segmentation questions are usually included in all our tracking studies, awareness and usage studies, copy testing studies, etc.

Methodology

A total of 2,014, one-hour interviews were conducted with Hispanic consumers in the Southern California market. Interviews were conducted in each of the three ADIs which comprise the Southern California market: Los Angeles ADI (1,314 interviews), San Diego ADI (400), El Centro-Yuma ADI (300). Respondents were qualified to participate in this survey if they 1) defined themselves as being of Hispanic, Latin, or Spanish origin and 2) if they were at least 18 years old.

Half of the interviews were conducted by telephone; half were conducted door-to- door. The sample was drawn using the most up-to-date demographic information available, including recent immigration data. The sampling plan was weighted according to the percentage of the Hispanic population in each area, county, and ZIP code. Telephone prefixes matched by Hispanic population penetration per ZIP code were used to generate the telephone sample on a weighted bases. All ZIP codes with Hispanic residents were included in the sampling plan. Care was taken to ensure equal male and female participation in the survey. Within each household, the adult who had celebrated the most recent birthday was selected for participation.
Survey respondents were given the choice of being interviewed in Spanish or English; the vast majority chose Spanish. All interviews were conducted by trained professional, bilingual personnel, seven days a week, both during the daytime and evening hours. This ensures equal representation by gender and by all age groups. Sample respondents were given a small incentive to participate, and were entered into a raffle for a large color television.

Based on the battery of 12 language proficiency rating questions, for both English and Spanish, algorithms were generated to cluster the U.S. Hispanic market into five segments: "Spanish-dependent," "Spanish-preferred," "No preference," "True bilinguals" "English-preferred" and "English-dominant." Based on the analysis and due to the small number of people in the two latter groups, these were collapsed into one group, "English-preferred/dominant."

"Spanish-dependent" are non-U.S. born, average 10 years of residence in the U.S., "Spanish-preferred" tend to be non-U.S. born and average 14 years of residence in the U.S. These segments combined represent over 80 percent of the California Hispanic market and are mostly composed of Mexicans and Central Americans. They tend to depend heavily on Spanish language media "True bilinguals" and "English- preferred/English-dominants" tend to be U.S. born, and non-U.S. born with an average of 18 and 28 years of residence in the U.S. They depend heavily on English-language media and have the highest household incomes of all four segments.

As in most regions, the Spanish-dependent Hispanic segment makes up the largest portion of the Southern California market (48 percent), followed by the Spanish-preferred Hispanics (33 percent). One in eight (13 percent) showed no preference between the English and Spanish languages ("True bilinguals") while only a few (6 percent) preferred/or are dependent upon English.

The same language sub-segments were observed in other geographical regions in the U.S., but the proportions of each segment varies considerably between regions.

The make up of the Hispanic market in Miami and New York tends to be from Caribbean countries and the balance between English-language and Spanish- language proficiency varies greatly depending on age. Texas Hispanics tend to be the most acculturated and hence, the most English-preferred/English-dominant. Californians tend to be Mexican and Central Americans and the most Spanish- dependent. Data analyzed by the segments reflects how acculturation rates have an impact on media usage and value-orientation.

The Spanish-dependent and Spanish-preferred consumers are primarily non-U.S.- born, while the others are much more likely to be U.S.-born. The Spanish- preferred and dependent consumers have lived in the U.S. only half as long as the English dependent/preferreds and those with no preference. The Spanish-dependent and Spanish-preferred consumers reported significantly lower educational achievement and annual incomes than those who did not have a preference or who prefer/depend upon English.

In addition to demographic differences, clear, value-based, acculturation differences can be observed between the segments. Spanish-dependents are the most "traditional" in their beliefs; the English dependent/preferred are the least traditional, closer to the Anglo American culture.

Differences in terms of shopping behavior, product usage, couponing and others can also be tracked by language subsegments. For example, Spanish-dependents said they primarily consult family and friends for information on places to shop for clothing. Other groups rely on other sources of information as well, such as print and broadcast media.

The media usage challenge

In addition to language, one of the most unique and challenging factors when marketing to Hispanic consumers in the U.S. are the English and Spanish media mix usage patterns. There is little in common with dominant-language societies, where media is tracked, planned and rated in one single language. Until the advent of Nielsen's Hispanic Television Index in 1992, no ongoing, reliable data was available on the Hispanic consumer language/media mix usage. Their TV ratings data is also tracked based on language sub-segments which mirror very closely the language segments described above.

As could be expected, Spanish-dependent consumers indicated significantly higher preference for television shows and radio programs in Spanish and significantly less interest in English language programs than other groups, but language crossover is present in all language subgroups. The acculturation continuum can be observed and tracked based on the different language usage rates, English versus U.S. Spanish across segments.

Not a simple task

Targeting the U.S. Latin American Hispanic consumer is not a simple task. Historical differences, as well as the tremendous diversity within the Hispanic market, make this important Latin American market an elusive group to target successfully.
Marketers and advertisers who want to capitalize on the opportunity presented by this $200 billion market must take into consideration the acculturation process and how it affects the communication strategy and the life cycle of the particular product or service being promoted.

Research studies, qualitative and quantitative, based on language-based segmentations, are efficient tools for targeting and measuring the U.S. Hispanic consumer behavior. They provide direction to fine-tune creative strategies, with culturally-relevant messages in the appropriate language and the right language, media mix.

References

Berry J.W., "Acculturation as Varieties of Adaptation" in A.M. Padilla (Ed.), Acculturation: Theory Models and Some New Findings, Boulder, Westview Press, 1980, pp. 9-25.

Berry, J.W., and Annis, RC, "Acculturative Stress: The Role of Ecology, Culture and Differentiation." Journal of Cross-Cultural Psychology, 5,5, pp. 382- 406.

Hispanic Market Connections, Inc., Language and Media Planning for the Hispanic Market, Southern California, Los Altos, Calif., 1992.

Schick, L. and Schick, R., Statistical Handbook on U.S. Hispanics, Oryx Press, Phoenix.

U.S. Bureau of the Census, Current Population Reports, Series P-25, No. 995 and Series P-20, No. 431.

U.S. Bureau of the Census, Press Release, 1990.

Valdes, M. Isabel, "Acculturation Process: Which Audience to Reach," paper presented in conjunction with Telemundo at the "Se Habla Español" Fifth Annual Conference, Los Angeles, November 1992.

Veltman, C., The Future of the Spanish Language in the United States, published by Hispanic Policy Development Project, New York and Washington D.C.