The changing face of mass-market America

Editor’s note: Deborah Alessandro is director, consumer goods and services practice at FIND/SVP Strategic Consulting and Research Group, New York.

No question, American society is changing. Marketers and market researchers are aware that the U.S. population has become dramatically more diverse over the past decade. At the same time, household composition has continued its shift away from the traditional two-parent structure towards a variety of formations that constitute “family” in the 21st century.

Thus, one of the most compelling business issues today is how to best approach this changing marketplace, whether one is considering a niche campaign for the first time or looking to fine-tune a long-standing multicultural marketing program.

A look at the numbers

Increased ethnic diversity, coupled with significant shifts in the composition of American households, has had a tremendous impact on the U.S. mass market. These two forces are changing the United States from a dominantly white, traditional family society into a multiracial one where family and community are still of paramount importance, but where families will come in all different sizes, shapes and configurations.

In 2002, the total population reached 288.4 million people versus a total population of 248.7 million people in 1990. All told, non-Hispanic whites still comprise the vast majority of the population, with 68.3 percent of the total population or 196.8 million people in 2001. But this represents a significant decline from the 76 percent in 1990.

In contrast, major ethnic groups have grown rapidly:

Hispanics: According to the Census Bureau’s 2001 population estimates, there are 38.8 million Hispanics in the United States, accounting for 13.4 percent of the total population. The number of Hispanics is growing rapidly, up 9.8 percent in the 2002 estimates vs. the 2000 census, far outpacing the 2.5 percent general population growth rate. Further, the Hispanic population grew a significant 57.9 percent between 1990 and 2000, as a result of both immigration and higher birth rates for Latinos.

While Hispanics have lower median household incomes (according to the Current Population Survey March 2001, $33,447 for Hispanics vs. $42,148 for the total U.S), Hispanic consumer units are larger than those for the general population (3.4 vs. 2.5 for the total population) and have more children (1.2 vs. 0.7). Thus, they spend more than the average household, in absolute dollars, on food (cereal, beef, pork, poultry, fish, fresh fruits and vegetables), apparel (especially for kids), furniture and cleaning supplies.

African-Americans: According to the 2002 population estimates, African-Americans comprise 12.7 percent of the U.S. population with 36.2 million persons. This represents a 2.9 percent growth since the 2000 Census, slightly faster than the 2.5 percent overall population growth.

African-Americans, like Hispanics, have lower median household incomes than does the population at large (according to the Current Population Survey March 2001: $30,439 versus $42,128). However, this does not prevent African-Americans from spending more in absolute dollars than the average household on certain food products (cereal, beef, pork, poultry, fish, eggs), footwear, children’s apparel and telephone service.

Asian-Americans: According to the 2001 population estimates, Asian-Americans comprise 3.9 percent of the U.S. population, with 11.3 million people. This represents a 9.2 percent growth rate from the 2000 Census figure of 10.2 million. Most significantly, Asian-Americans have high median incomes. According to the Current Population Survey March 2001, Asian households, as a whole, have higher median incomes ($55,521) than any other U.S. ethnic group, including whites ($45,904), which make targeted marketing strategies worth pursuing!

Still, pursuing the Asian market can be more complex than targeting Hispanics, for example. While Latinos have different countries of origin, they share a common language and, often, a common religion. Asians are defined by geographical contiguity and often represent entirely distinct and unrelated cultures. The culture of India, for example, has little in common with that of China. These divergent ethnic profiles make marketing to Asians more challenging.

Multiracials: The 2000 U.S. Census was the first census that allowed respondents to identify themselves as multiracial and gave evidence of societal transformations. Simple demographics make it clear that this segment will be more important over time, because over half of the multiracial population is 24 years old and younger. The growing multiracial segment is the result of interracial marriage. For instance, half of all U.S.-born Asian women and one-third of all U.S.-born Hispanic women marry outside of their race or ethnic group. In 2000, there were one million interracial married couples or 1.9 percent of all married couples, according to the Census Bureau. While these numbers are small, their impact will grow over time.

Same-sex couples

In August 2001, the Census Bureau released data stating that there were 601,209 gay, lesbian, bisexual, transgender (same-sex) partner households in the U.S. This number is understated, due to some wariness regarding self-identification, but still shows astounding growth since 1990, when there were 145,130 such declared households. As with multiracial individuals, the potential societal impact is greater than the actual numbers.

Although data on the number of same-sex couples with children has not been gathered, this number is believed to be growing. On July 1, 2003, Jane Brody of The New York Times reported that according to the authors of The Gay Baby Boom: The Psychology of Gay Parenthood, there are as many as 14 million children who are being raised by at least one parent who is gay or lesbian.

Single-parent households

Single-parent households also contribute to an altered social fabric, with distinct needs, wants and spending patterns. Further, their growth speaks to the fact that our nation is becoming more diverse, in more ways than one.

Single-parent households numbered 12 million in 2000 - moms headed 10 million and dads headed two million. This contrasts dramatically with 1970 figures - there were only three million single-mother families and 393,000 single-father families. Due to their smaller size, such households rarely outspend two-parent families. Still, marketers may be able to benefit by tapping into their distinct needs, which may vary given the wide social spectrum they represent. The Bureau of Labor Statistics’ Consumer Expenditure Survey shows that single-parent households spend a great proportion (if not more absolute dollars) on the basics of life: food, shelter and apparel. Beyond that, anything that can add convenience to a more hectic-than-average life is a good bet. Services may also find a niche here.

Me, myself and I

In addition to single parents, the Census Bureau identified 10.7 percent of households as men living alone and 14.8 percent as women living alone - that’s over one quarter of all households! The needs of this group will vary, since it comprises disparate lifestyle segments - singles, divorced men and women, and widows and widowers - as part of the mix.

When is culture-specific marketing appropriate? Given this American mosaic, marketing campaigns that target specific population segments are often appropriate. Culture-specific niche marketing is called for when a significant percentage of a brand’s users (or its most loyal users), or a lucrative yet overlooked segment, belong to a certain subgroup best reached through targeted marketing communications. This often, but not always, occurs when:

  • language and/or significant cultural barriers exist;
  • a product’s perceived benefits and key features are different for a given, substantial subgroup than they are for the general market;
  • a brand’s budget is large enough to accommodate niche campaigns along with a general marketing campaign, or conversely;
  • a brand’s budget is so limited, or a product so specifically targeted, that it could not make a dent in the general market, so it is best to go after a given societal segment or niche market, which in turn creates a positive, proactive image for a brand or its parent.

Potential pitfalls in culture-specific marketing

Language barriers, strong core appeal, loyalty and cultural resonance, are all reasons to consider culture-specific marketing. But there are some potential pitfalls:

1. Forgetting marketing basics.

There can be nothing as exciting as feeling that you’ve identified a new market, with as-yet-untapped spending power. However, in the long run, a strong market research program is essential for success. Too many times, niche marketing plans are built without asking basic questions that would NEVER go unanswered in a general market launch. Does my brand have a current base in a given group? If not, do certain features or benefits of my brand appeal to certain groups? How large is that group?

2. Going cheap.

While culture-specific media may cost a fraction of what mass-market media costs, this is because it obviously has a lower, though more targeted, reach. However, market research still needs to be sufficiently thorough, with the correct sample sizes, culturally appropriate approaches and interview structures. This can often mean costs that are equal to general market research. After all, if you want a campaign to succeed and to represent your brand well, you cannot depend on cut-rate inputs, especially as your competitors increase their culture-specific spending.

3. If there’s not a network, I can’t market, right?

The presence of national Spanish-language television networks certainly makes Hispanic campaigns easier to launch, but it doesn’t mean that other ethnic groups are impossible to reach. In the Asian market, for example with its print-based cultures and generally high literacy rates, many Asian subgroups have daily and weekly newspapers in those cities where their population is well represented. And while print may not have television’s big bang, and takes some coordination, it can be a very cost-efficient spend.

4. Stopping with advertising.

While advertising is important for awareness and brand equity, other forms of communication build credibility with a given segment. But with event marketing in particular, brands should be prepared to invest on a multi-year basis. No product can expect to develop a Cuban-American following, for instance, by merely showing up at Miami’s Calle Ocho festival once. It takes time and an ongoing commitment.

5. Hit and run.

As with events, so with campaigns as a whole; culture-specific marketing is not a one-time promotion that will boost profits right away. Rather, it is an investment in a core segment of the American community that will reap profits over the long haul. Of course, few businesses can tolerate extended payout horizons in today’s competitive environment. You will need goals and benchmarks. And you will need a research plan to verify if those objectives are being met or to show what course-corrections are needed. If you cannot afford to take a loss, plan accordingly. You can always start with a market or two and go from there, building your investments over time.

6. It’s more than language.

Marketing is not Berlitz. You cannot simply translate a discussion guide, questionnaire or advertising message into another language. One must consider cultural cues such as body language, modes of speech, interpersonal interactions, modes of dress, and colors. This may mean you have to engage multiple research suppliers to conduct general market and niche studies. If you are concerned about the costs and coordination involved, focus on one new niche at a time, building business as you go.

Mosaic marketing

As discussed, marketers can benefit by reaching out to previously overlooked segments. However, because there is so much diversity, it is not always necessary to address each cultural group as if it is separate from the mass market. Consider that the common denominators that have defined mass consciousness have themselves changed due to societal diffusion. We often are able to reach disparate groups through mass marketing campaigns that transcend boundaries. We call this mosaic marketing.

Any time a product or service is addressing mass-market America, a mosaic campaign is likely to be appropriate. Regardless of race, ethnicity, cultural heritage, sexual orientation or marital status, most individuals and families have basic needs and desires in common, be it safety and financial security or clean laundry and a satisfying meal.

Although minorities and subgroups are a part of the mass market, one must not make the mistake of thinking that they will be completely assimilated into society. It is their diversity that makes for the mosaic rather than the outdated melting pot concept. Thus, campaigns should reflect the common attitudes, values or needs that span across cultures, but demonstrate them with distinctive cultural cues specific to key groups. To feature a homogeneous view of America in brand communications is to risk alienating the collective spending power of African-Americans, Hispanics, Asian-Americans, gays, lesbians and others.

Potential pitfalls in mosaic marketing

As with culture-specific marketing, mosaic marketing is not the solution for every marketing challenge. Because it is an evolution of traditional, homogeneous mass marketing, the potential pitfalls are fewer. Here’s what to watch out for:

  • Just showing the faces. Somehow you can tell when an ad has taken a short cut to diversity by just putting a bunch of actors from different races and cultural groups together. Just as in an ethnic campaign, other cultural cues should fit. You want to reflect a world, not a quota system.
  • Being over-conscious of multiculturalism. As exemplified in some of the most successful campaigns, appearing natural is important. Reflect American society in all its richness, but don’t dwell on it for its own sake. Your brand should still be the star.

Growing influences

American society today is now a diverse mosaic. At one point in our history, each of the diverse cultural groups discussed herein was on the periphery of mainstream society. Today, they are U.S. society. Our media, popular culture and consumer product selections are all beginning to reflect the growing influences that have reshaped the nation. And younger generations see diversity as simply “the way it is.”

Marketers must acknowledge this dynamic or risk losing not only prospective customers but also their place in the fabric of this evolved society. Each of the groups and households discussed has significant buying power to tap into, so it is crucial to know how to target them with appropriate messages and in the appropriate media. And today’s youth represents the multicultural nation of the future. They already readily engage in cross-cultural borrowing, and if marketers can show them now that they have adjusted to this societal shift, they can avoid facing a future stigma of being perceived as archaic brands that did not change with the times.

In the end, multicultural marketing is like any other part of the marketing plan. You need to know your brand; know your consumers; and figure out the best way to reach them with the most relevant product offering and communications. There are new things to learn to execute these plans correctly, but no more so than with new media or other breakthroughs. At the end of the day, multicultural marketing can reap great rewards, and help your agency, company or products become part of the remarkable mix that is the United States.