The Minority (Marketing) Report

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The 2000 U.S. Census has revealed that Asian and Hispanic populations are growing at incredible rates. Their purchasing power has also grown. The University of Georgia's Selig Center for Economic Growth estimates that Hispanic buying power will grow by 315% to $927 billion from 1990 to 2007, Asian purchasing power will increase by 287% to $455 billion, and African-American buying power will jump by 170%, while Anglo-American purchasing power will only grow by 112%.

Marketers across the country are just beginning to realize the potential of this $1.7-trillion market. Studies demonstrate that when ads are shown to minorities that are not customized for them, or that don't feature people who look like them, they totally ignore the ad as immaterial. To attract diverse members, credit unions must have a clear plan and commitment. This means not only a willingness to spend money, but staff time as well to develop culturally relevant messages.

Again, credit unions must be clear on the composition of their member base either geographically or by Select Employee Group (SEG). It's just not sufficient to be aware that you have a large percentage of Asians in the areas you serve. You must know whether they are Koreans, Chinese or Japanese, etc. or if Hispanics are Mexicans, Puerto Ricans or Cubans, etc. These groups have little in common in language, religion or history. The same is true for subgroups within the Middle Eastern and other cultures. There are also distinct groups of African-Americans, who may differentiate themselves economically and even by skin tone.

Howard Buford, CEO of Prime Access, Inc., New York City, specializes in reaching the African-American market. He reinforces the fact that marketing to different segments of the African-American population requires customizing the message or it will be totally invisible to them. "What you're dealing with is an 'historically excluded population.' What that means is there is a different mindset overall. When an historically excluded population hears a general message, and it's delivered by a general market institution with kind of a mainstream portrayal, they assume that message is not for them. They assume the institution is not really talking to them."

Once you have determined the specific cultures your institution could serve, you must know how acculturated they are. Acculturation is the process of adapting to new cultural patterns of the dominant culture while maintaining your own values and perspectives. In the past, primarily because immigrants into the United States were from the same racial background, new arrivals were more likely to assimilate, or adopt, the dominant culture's behaviors and values while forsaking former cultural values. Today, because of differing racial backgrounds, new immigrants are more likely to acculturate rather than assimilate.

Therefore, it's crucial to research your potential member base and determine how long they have been in America. How many are first generation, second generation, third generation and beyond? While this is not easily determined without doing in-depth surveys, this information is crucial before an effective marketing campaign can be developed.

Age is another consideration within your marketing segments. Howard Buford of Prime Access, Inc. says, "For all financial services, (the target) tends to be a bit little older than the usual 18-32 year olds. You really have to speak to the audience age that you're looking to reach. That's the one that's going to be most valuable to you."

Next, you must also analyze the income level, psychographics and other factors relevant to your potential members must be analyzed. You may want to consult multicultural marketing experts about the exact factors that you will need to research before embarking on any efforts to research a new member group.

One form of study you may want to conduct, in addition to surveys, is focus groups. However, the composition of your groups must be carefully considered. Again, marketing experts can be invaluable in this respect. Buford suggests at least three focus groups be conducted because one might not give you an accurate picture.

After conducting research, a return on investment (ROI) analysis should be undertaken to help determine if potential returns from a marketing effort will be worth the funds expended. If not, look for other factors (social justice, ethics, etc.) that might justify the resources that will be spent.

Every group must be marketed to in a way that specifically appeals to them and in a manner that is comfortable for them. Remember, you must take into account the generational, socioeconomic and acculturation differences between groups.

Properly positioning products and services is crucial to marketing success. For instance, calling a loan or investment product "new" or "revolutionary" may appeal to many African Americans who often appreciate the latest developments. For them, the words "old" and "traditional" may remind them of past discriminatory practices. However, touting the latest developments in financial services would hardly be attractive to most Asians or Hispanics who tend to prefer established and well-known products and brands.

This would be similar for the positioning of the credit union itself. Almost all minority cultures in America like to support member-owned entities so our institutions have a distinct advantage over banks and other financial services entities. Most of these groups tend to look for those who have been in business for a long period of time demonstrating trustworthiness throughout the years.

It's especially important to remember the distinct traits of groups within populations which require specific marketing techniques and messages. You cannot appeal to Mexicans in the same way as Cubans or Puerto Ricans. You cannot reach Chinese with ads designed for Vietnamese or Koreans. You must also develop different marketing campaigns for upscale, middle-income and lower-income African-Americans. The techniques for attracting Iraqis is different from Iranians or Saudis.

This is the challenge that faces credit unions in marketing to people from diverse cultures in America today. Yet, by investing the time to know each group your institution serves you will learn how to most effectively reach them.

Michael D. Lee is president of EthnoConnect, Dublin, Calif. He can be reached at 800-417-7325 or michael

About This Article:

This is an excerpt from "Multicultural Marketing: Opportunity For Growth" published by CUES. For information on this and other CUES publications, visit

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