Melting Pot: Marketing Strategy That Takes Culture into Account

By: Richard Berger

Most of us wouldn’t think of Walmart as a premiere shopping destination for ethnic foods, but walk through one of the company’s supercenters in certain neighborhoods today and you might be surprised. Mangoes and papaya are stocked next to Chinese eggplant, and the next aisle over might feature imported foods from South America – all carefully curated to appeal to growing local Hispanic and Asian populations. And Walmart isn’t alone in this type of effort. Macy’s recently similarly adjusted its product selection and sizing in the women’s clothing department, responding to the demands of ethnic consumers. This subtle shift in product selection at major retailers across the country reflects a growing recognition among retailers, consumer goods manufacturers and other businesses that multicultural shoppers and other demographic segments represent a prime opportunity for new growth and revenue.

Reaching these audiences is about more than product selection, however. It’s also about raising brand awareness and building customer relationships with these groups through effective and targeted marketing efforts – all within the scope of the marketing budget. That requires some careful consideration of diverse consumer segments and how they fit within your brand’s positioning. At HighPoint, we’ve seen a lot of growing interest in how companies can tailor their marketing strategies to reach consumers in certain underserved demographics, and for good reason. Consider:

  • Purchasing Power: Combined, the purchasing power of multicultural “super consumers” reached $3.4 trillion dollars in 2014, growing more than 500% over the past quarter century, and at more than twice the rate of the broader U.S. consumer market.
  • Growing Population: Multicultural consumers, already 120 million strong, account for 38% of the U.S. population and are growing by 2.3 million per year. U.S. Hispanic, African-American, Asian-American, and other multicultural segments are poised to become a numeric majority by 2044 and already account for “Majority Minority” populations in some of the nation’s largest cities including Los Angeles, New York, Houston, Dallas, and San Francisco.
  • Consumer Connection: Consumers, in general, are looking for opportunities to identify and connect more closely with brands, and inclusive, multicultural messages are an important part of the mix, particularly for reaching rising Millennial consumers who are part of the most culturally diverse generation in U.S. history.

Major retailers are awakening to the reality that marketing to targeted consumer segments can become a strategic differentiator and help augment revenue, especially when campaigns develop a following of loyal and valuable shoppers in the process. Target honed in on one cultural segment with their “Sin traducción,” or “No Translation” campaign highlighting Spanish terms and situations familiar to Hispanic shoppers but which lack a direct translation to English, while insurance giant Aetna developed a campaign specifically designed to reach consumers in the LGBT community.

I spoke with HighPoint independent consultant Kathryn Martinez, an expert on marketing and customer segmentation, for her viewpoint on this evolving landscape: “Fifteen years ago, many corporations viewed Multicultural Marketing as a ‘nice to do’. Given the rapidly changing demographic landscape in the US, today it is a business imperative,” Martinez said. “By integrating key consumer segments under a thoughtful, carefully created comprehensive marketing plan, it adds depth and substance to your brand, while increasing equity among key groups and solidifying your marketplace position for the long run.”

As our national demographics continue to change and niche consumer segments grow, businesses will need to stay focused on what “cultural ingredients” make up the marketing mix – they’ll need to look beyond the basics to ask: How well do we understand the core values of the multicultural consumer, and how do we build personal connections to these shoppers?