Minority customers to become a major marketing target - Merchandising Through The Ages: 25-44

Discount Store News, May 18, 1992

If retailers want any evidence about the importance of ethnic customers, they need look no further than the population projections through the year 2010.

In the first decade of the 21st Century, immigrants will account for 35% of the U.S. population growth, compared to 10% in the 1950s, as the American birth rate declines.

Further illustrating the trend, population growth is projected to slow to an average of 1.4 million a year in the next decade from 1.8 million in the '90s.

Because of changes in U.S. immigration laws, Hispanics and Asians will account for the lion's share of that immigration, rather than Northern Europeans.

But if retailers expect to tap markets for ethnic groups, primarily Hispanic, Asians and blacks, they will have to hone their micro-marketing skills.

For it's a myth that ethnic markets are homogeneous, concluded professor Thelma Snuggs, a Purdue University export in minority marketing. The black ethnic market includes not only American blacks but also West Indians and Jamaicans, Snuggs said, while the Hispanic market includes Cubans, Mexicans, Puerto Ricans and Central and South Americans.

The Asian market includes Chinese, Japanese, Korean and southeast Asian subgroups such as Vietnamese and Cambodian.

"Micromarketing must be done just as it is done within white populations," Snuggs said.

Retailers need to recognize the cultural differences between ethnic subgroups and the majority population and attempt to reach them through specialized media that appeals to their needs, Snuggs advised.

Hispanics represent the fastest growing ethnic market, with 21 million consumers, or 8% of the U.S. total of 249.9 million, compared to 6% in 1980.

Blacks make up the largest ethnic market, with a population of 31 million, up from 26.7 million in 1980.

Asians constitute 8.6 million potential customers, or 3% of total U.S. population, a gain from 2% in 1980.

In the same decade, the white population declined to 84% of the total from 86%.

To help retailers understand the characteristics of each ethnic market and advise them on marketing strategies, Impact Resources, Columbus, Ohio, in partnership with Deloitte & Touche, New York, conduct annual "Market Opportunities" surveys of the black, Hispanic and Asian markets.

Strategy Research, Miami, prepares an annual market survey entitled "U.S. Hispanic Market."

Here are the highlights of their findings:

Blacks: The black population tends to be more youthful and single, with more than half of all blacks falling in the 18-34 age bracket, compared to 37% of whites. More than half of all black consumers are single heads of households, compared to a third of whites.

The average household income of black consumers is $26,100, compared to $33,100 for white, but 1% of blacks make more than $50,000-a-year.

Only 35% of blacks own their own homes, so do-it-yourself activity is less than in the white population. Fewer blacks own cars, in part, because they tend to live in inner cities.

Hispanic: The Hispanic population also is considerably younger than the U.S. average, with a median age of 37.8 years, compared to 43.3 years for the country as a whole. Almost three quarters fall in the 18 to 44 year old age bracket, and almost half of Hispanic households contain a person under age 18, compared to 31% for the total population.

The average household size is 3.3 persons, compared to 2.7 in the total population.

Median family income averages $28,500, compared to $37,600 for the total population, although income is much higher for Cuban than either Mexican or Puerto Rican consumers.

Asians: Asian-Americans are better educated than the general population, earn higher household incomes and are more likely to hold a professional or managerial job. Families are larger, an average of 3.3 persons per household, compared to 2.7 for the general population.

More Asians rent apartments than own their homes, so spending on do-it-yourself activity is less. But the values of the homes Asians do own are higher than for the general population.

Asians generally are younger than the population as a whole, with an average age of 36.7, compared to 43.3 for the population as a whole. And their rate of separation and divorce is half that of the general population.

Men play a greater role in shopping because cultural traditions call for the eldest male to make major buying decisions, so retailers would do well to cater separately to the male family leader as well as to the female consumer.

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