Power market

Kung Fu Panda, DreamWorks Animation’s recent animated joyride through ancient China, may not seem to have an immedi­ate connection to the US Hispanic population. But, that didn’t stop Hewlett-Packard Co., a DreamWorks partner, from using Kung Fu Panda tie-ins, such as online games, to boost Hispanic consumer engagement with its brands and Web site. TV spots featuring Po the Panda, in which Po explains how he uses his HP computer, aired in Spanish on Spanish-language stations Univi­sion and Telemundo, and in English on English-language stations.

“It really showed that Hispanic marketing is becoming an ongoing, integrated part of our overall marketing,” says Kathleen Haley, His­panic marketing manager for Hewlett-Packard. “We [also] had more than 20 family-oriented Kung Fu Panda activities online, because we know that Hispanics who go online are more engaged with online media than non-Hispanic US consumers.” She points out that a similar online promotion, with DreamWorks’ Shrek the Third, measured four times as many downloads from Hispanic consumers as from non-Hispanic.

There is no question that the Hispanic popula­tion is booming: The US Census estimates that as of July 1, 2007, the US Hispanic population totaled more than 45.5 million — an increase of more than 1 million from the previous year and of more than 10 million since the April 2000 Census. The group’s spending power has also grown considerably, hitting $1 trillion in 2006. Such growth represents a huge opportunity for marketers who are looking to expand their cus­tomer base with new, untapped buyers.

Hewlett-Packard is not new to Hispanic mar­keting. The company first made efforts to reach out to the burgeoning Hispanic population soon after seeing the results of the 2000 US Census, which revealed just how quickly the US Hispanic population was expanding.

Marketers have taken the census data to heart. “The Hispanic market represents a tremendous opportunity to increase market share and create a new and extended customer base for your prod­uct,” says Paul Stringer, EVP of Hispanic-focused agency Aspen Latino, about marketers’ increased efforts to reach Hispanics. “The 2000 Census showed Hispanics inching towards surpassing African-Americans as the largest [US] minority, and that knowledge drove a lot of action.”

Large market requires segmentation

The Hispanic market is growing so much, in fact, that marketers must consider further segmenting their messages to address different types of His­panic consumer. Besides the usual demographic differentiators such as age, household income, gender and family size, Hispanic-focused mar­keters should also consider acculturation levels, primary language and countries of origin when creating ads, notes Barbara Nelson of Acxiom Personicx Hispanic.

“The Hispanic population no longer [is] a niche market, where everyone gets the same message,” she says. “It’s not a homogenous group.”

Within the Hispanic market, HP focuses heavily on small businesses for its b-to-b efforts, and on families and youth for its b-to-c. Haley explains that children play a large influencer role in Hispanic families that shop for technology, so campaigns have to communicate the benefits of a product to discerning parents while showing off the “cool” factor to kids.

Maria Lopez-Knowles, SVP at MRM World­wide’s arm for second-generation US Hispanic focus, agrees that today’s Hispanic youth repre­sents a key demographic for marketers.

“From 2000 to 2020, the most growth in the market is going to come from children of immi­grants,” she says. “There are key differences between these consumers and their parents.”

Second-generation consumers, she notes, are Americans by birth, and tend to be more attuned to American culture and heavily bilingual. They are often brand influencers in their families, and also spend more time online.

Recognizing a growth opportunity

Lopez-Knowles notes, though, that the majority of corporate America isn’t up to date on the emerg­ing Hispanic youth segment. Haley adds that most tech companies have been slower to recognize the importance of the Hispanic market. Only in the past year have HP’s competitors really zeroed in on Hispanic consumers, she says.

“The penetration rate of computers in Hispanic households is lower than the general market, but for me that’s a growth opportunity,” Haley insists. “When penetration is there, they have four com­puters in the house and are very engaged.”

Census numbers from October 2003 show that 36% of Hispanic households report Internet access at home, compared to 59.9% of white, non-Hispanic households, 36% of black households and 66.7% of Asian households.

Haley adds that Hispanics over-index on social networking and instant messaging applications because it’s important for them to connect with friends and family members all over the world. Computers and online technology represent both a key consumer product for Hispanic marketers and an important touchpoint, considering the market’s engagement.

Nelson agrees, saying, “Our research shows that the Hispanic market is very quick to adopt technology, because it allows them to be con­nected with family and friends.”

Hewlett-Packard is communicating to this growing market through online channels, on television and during grassroots events, by reach­ing out to Hispanic consumers with messages that speak to them.

“We want to make sure we’re looking at the actual market of today and tomorrow, and that’s where Hispanic marketing comes into play,” Haley emphasizes. “The grand majority of His­panics in the US are bicultural and bilingual, and we want to make sure we talk to them in their language and their culture.”

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