hispanic 101 — an immersion january 2004. 2 three key themes 1.size & growth the u.s. consumer...

Hispanic 101 —An Immersion

January 2004

2

Three Key Themes

1. Size & Growth The U.S. consumer landscape will never be the

same

2. Complexity Demographic, language and cultural issues

elements call for customized marketing efforts

3. Financial Business Rewards Hispanics’ income growth and purchasing

power represent a significant business growth opportunity

3

Contents

1. Size

2. Growth

3. Composition

4. Distribution

5. Age

6. Households

7. Language Usage

8. Spanish Ad Effectiveness

9. Income & Buying Power

10.Media Dynamics11.Segmentation: A

Mix Of Lifestyles And Life Stages

4

1. Size

68% growth in one decade;largest U.S. Minority segment

Non-Hispanic

86%244 Million

Hispanic14%

39 Million

Non-Hispanic

91%227 Million

Hispanic9%

22 Million

1990 2002Source: U.S. Census Bureau

5

1. Size

Formulation of a “new America” is evident

White53%

Hispanic24%

Black13%

Asian9%

Other1%

White70%

Hispanic14%

Black11%

Asian4%

Other1%

2000 2050Source: U.S. Census Bureau

6

- South American Argentinean Bolivian Chilean Colombian Ecuadorian Paraguayan Peruvian Uruguayan Venezuelan

- Central American Costa Rican Guatemalan Honduran Nicaraguan Panamanian Salvadorian

Diversity exists even within theHispanic community

Source: U.S. Census Bureau, July 2002 Estimate March 2002 Current Population Survey

Puerto Rican8.6%

Other Hispanic 6.5%

Cuban 3.7%

Central or South American

14.3%

Mexican 66.9%

Dominican2.2%

1. Size

7

Comparable in size to key demographic groups embraced by the marketing community

13.5% 12.7%

15.4%

20.6%

26.0%

12.4%

Hispanics* African-American*

Gen Y (14-24) Gen X(25-38) Baby Boomers(39-57)

MatureGeneration

(65+)

Source: Census 2000* July 1, 2002 Population Estimates

1. Size

8Source: Census 2000 Summary File 3. Foreign Born Population Table 8.1: March 2000.

40%

60%

U.S. Born Foreign Born

30%

16%

10%

43%

1990 - 2000 1980 - 1989 1970 - 1979 Before 1970

U.S. Born vs. Foreign Born Foreign Born Population

Year of Entry

1. Size

Majority are foreign born and have been in the U.S. less than 20 years

73%

9

2. Growth

Growth throughout the entire U.S.

Source: U.S. Census Bureau

10

The new Hispanic emerging markets

700%625%

580%

380%

275%

Greensboro Charlotte Raleigh Atlanta Las Vegas

Source: William H. Frey analysis of 2000 Census

% Growth 1990-20002000 Populations >50,000

2. Growth

11

Why the continued immigration & migration?... Labor demand in the U.S. Weak economy in country of origin Political/social instability Ties with U.S. residents

2. Growth

12

2. Growth

Projected to grow 68% by 2025

Source: Populations Projections Program, Population Division, U.S. Census Bureau. Consistent with the 1990 estimates base.

milli

ons

22.4 million

38.8 million43.7 million

61.4 million

1990 2002 2010 2025

13

Population (millions)2002 2025

(proj.)

1. Mexico 101.7 131.72. Colombia 43.8 59.73. Spain 41.3 44.34. U.S. Hispanics 38.8 61.45. Argentina 36.5 47.26. Peru 26.7 35.77. Venezuela 25.1 34.88. Chile 15.6 19.59. Ecuador 13.0 18.510. Cuba 11.3 11.8

The 4th largest market in the Spanish-speaking world... …Second by 2025

Source: Population Reference Bureau, 2002 Population Data Sheet and U.S. Department of Commerce News June 18, 2003 Release

2. Growth

14

3. Composition

On Average, the Top 20 Hispanic markets have a 17% Hispanic penetration

Source: A.C. Nielsen

Persons 2+ Persons 2+

HispanicNon-

Hispanic % Hispanic HispanicNon-

Hispanic % Hispanic(000) (000) (000) (000)

1 Los Angeles 6,473 15,779 41% 11 Albuquerque 602 1,597 38%2 New York 3,670 19,421 19% 12 San Diego 745 2,705 28%3 Miami 1,589 3,909 41% 13 El Paso 633 834 76%4 Houston 1,450 4,975 29% 14 Fresno 750 1,613 46%5 Chicago 1,510 8,966 17% 15 Sacramento-Stockton 684 3,345 20%6 Dallas-Ft. Worth 1,228 5,784 21% 16 Denver 590 3,909 15%7 San Antonio 1,008 1,960 51% 17 Philadelphia 467 7,171 7%8 San Francisco-San Jose 1,278 6,500 20% 18 Washington, D.C. 465 5,517 8%9 Phoenix 936 3,986 23% 19 Orlando 373 2,983 13%

10 McAllen-Brownsville 853 984 87% 20 Tampa 376 3,719 10%5,685 33,393 17%

15

Hispanics are the market in top DMA’s

Source: Nielsen 2003 Universe Estimates (Top 15 Hispanic Markets)

Hispanic % of Total Persons (2+)

38%

76%

20%

28%

47%

87%

24%

51%

21%

20%

17%

29%

41%

19%

41%

13%Total U.S.

Los Angeles

New York

Miami

Houston

Chicago

San Francisco

Dallas

San Antonio

Phoenix

McAllen

Fresno

San Diego

Sacramento

El Paso

Albuequerque

3. Composition

16

Geographically concentrated: ¾ of Hispanics reside in the Top 20 DMA’s

Base: U.S. Hispanics AdultsSource: Scarborough USA+ Release 2, 2002

Los Angeles, 18%

Houston , 4%

San Francisco, 4%

San Antonio , 3%

San Diego , 2%

Sacramento , 2%

Miami, 5%

Balance of U.S., 30%

Chicago , 4%

New York , 11%

Dallas, 3%

Orlando , 1%

Tampa , 1%Atlanta , 1%

El Paso , 2%

Washington , 1%Philadelphia , 1%

Fresno , 2%Albuquerque , 2%

Denver , 2%

Phoenix , 3%

4. Distribution

17

4. Distribution

Even more concentrated than the general population

% who live in….Hispanic

Adults

TotalAdults

8 DMAs 51% 25%

13 DMAs 61% 30%

37 DMAs 80% 57%

Source: Scarborough USA+ Release 2, 2002

18

5. Age — National

A significant portion of key consumer segments

13% 19% 16% 15% 13% 7%


All P2+

Kids 2-11

Adults 18-49

Teens 12-17Adults 18-34

Adults 50+

19

5. Age — Top 10 Markets

A crucial portion of key Kids and Teens segments on a market-by-market level

Kids 2-11 Kids 6-11 Teens 12-17

HispanicNon-



Hispanic % Hispanic(000) (000) (000) (000) (000) (000)

1 Los Angeles 1,482 2,683 55% 871 1,638 53% 732 1,499 49%2 New York 665 2,784 24% 394 1,697 23% 363 1,608 23%3 Miami 204 537 38% 125 331 38% 129 332 39%4 Houston 312 820 38% 178 497 36% 165 499 33%5 Chicago 326 1,392 23% 184 843 22% 165 816 20%6 Dallas-Ft. Worth 270 924 29% 151 554 27% 137 550 25%7 San Antonio 197 315 63% 116 192 60% 118 201 59%8 San Francisco-San Jose 259 883 29% 151 539 28% 132 522 25%9 Phoenix 223 620 36% 126 372 34% 110 359 31%

10 McAllen-Brownsville 187 198 94% 111 119 93% 106 115 92%


20

6. Households

Younger, and larger HH’s

HispanicMedian Age: 27HH Size: 3.6

Total USMedian Age: 37HH Size: 2.4


21

Deep Roots

1st. Generation

Transplants

Transitionals

Newcomers

Born here;Parents born here

Born outside U.S.;½ of life here & ½ of life there

Born here;Parents outside U.S.

Born outside U.S.;¼-½ of life here

Born outside U.S.;less then ¼ of life here

A mix of individuals

6. Households

22

6. Households

Over-index versus Non-Hispanics on children in the HH

147 154163

144

One or more Two or more Three or more Four or more

Source: U.S. Census Bureau

23

Leisure activities enjoyed are different based on acculturation level

HispanicDominant Bicultural

U.S.Dominant

Going out to dinner 77% 75% 92%Going to church or religious service 76% 71% 65%

Exercising or playing sports 73% 82% 75%Going Dancing 57% 65% 60%

Going to the movies 52% 65% 74%Going to museums 52% 65% 59%

Going to concerts 44% 65% 74%Going to the theater 35% 59% 68%

Going to bars 13% 26% 23%

Source: People en Español, 2003

6. Households

24

United StatesCalvinist ValuesDemocracyVietnamIndividual

(Me/mine/my)Sibling Rivalry Youth & “Fun”Stable economy“No Wrinkles

Tomorrow”

Latin AmericaCatholic ValuesAspiring DemocraciesNo VietnamGroup (We/our/us)Sibling Cooperation Maturity & “Diversión”Fluctuating

economies“Look Good Tonight”

Source: TNS Market Development

Differing value systems

6. Households

25

United StatesKennedy, Nixon, KingBay of PigsEqual Rights AmendmentFreedom Fighters WoodstockWashington Post/ Watergate B.Friedan, K. Vonnegut,

J. KerouacBritish Invasion, Hendrix, MorrisonW.Chamberlin, Ali, H.Aaron

Latin AmericaCastro, Allende, Che Guevara Bay of PigsInstability, Drug Cartels, InflationCoup d’etatsWhite Collar CorruptionPolitical Activist LiteratureO. Paz, G.G. Marquez,

P. Neruda El Puma, J. Iglesias, E.Guzman Pelé, R.Duran, R.Clemente

Source: TNS Market Development

Life experiences colored by different milestones

6. Households

26

7. Language Usage

Majority of adults speak Spanish to some degree

English Only8%

English Mostly18%

Bilingual20%

Spanish Only15%

Spanish Mostly39%


92%

27

Use of Spanish will continue 2/3 were born outside the US Continuing immigration Preservation of cultural identity Geographic concentration Ease of travel and telecommunications

7. Language Usage

28

Hispanics speak Spanish at home regardless of education, age or HHI

93%

85%

81%

91%

91%

89%

96%

87%

92%

2-5

6-11

12-17

18-34

35-49

50+

76%

79%

85%

Education Age HH Income

Source: NHTI Installed Metered Sample, Feb 2002; Excludes English Only Homes; Based on % of Persons Living in HH’s that Speak Some Spanish

7. Language Usage

29


Roslow Research Group

1994 and 2000

Document relative effectiveness of Spanish vs. English commercials among Hispanics Awareness Comprehension Persuasiveness

Source: Roslow Research Group, 2000

30

Spanish-language commercials are... 61% more effective at increasing

Awareness 57% more effective in

message Comprehension 4.5x more Persuasive

Source: Roslow Research Group, 2000

Among Bilingual Hispanics, Spanish commercials are 3.4 times more persuasive


31

Spanish ads work best% of Spanish Dominant Target*who "agree a lot" with statement

168

166

162

157

138

133

Spanish Ads best source of info

I remember more about Spanish Ads

Find TV ads interesting

Enjoy reading ads in magazines

Loyal to companies w/ ads in Spanish

Spanish ads respect my heritage

Index to Total Hispanic Adults. Base =Spanish Dependent Adults with Bank Account, but no checking or debit card accounts. Source: Simmons Hispanic Study 2001


32


Income level growing faster than population $89.5

(+62%)

$36.9

$55.1(+49%) 41.5

(+19%)35.0(+59%)

22.0

1990 2000 2010

Income (Thousands) Population (Millions)

AVG.

+56%

AVG.

+39%

Source: A.C. Nielsen, Selig Center

33

Hispanic HH’s have shifted from lower to middle and higher income brackets

Hispanic HH Distribution of Income, 1982-2001

0%

5%

10%

15%

20%

Under$5K

$5K-9.9K

$10K-14.9

$15K-24.9K

$25K-34.9K

$35K-49.9K

$50K-74.9K

$75K-99.9K

Over$100K

1982 2001

Source: U.S. Census, “Money Income in the U.S.: 2001”


34

531.0

926.0

1,156.0

2002 2007 2012

($ /

Bill

ion

s)

Buying power will approach$1.2 trillion by 2012

Source: Global Insight


35

While whites account for the majority of consumer spending, their share is dwindling

1990

$3,739 85%

$223 5%

$118 3%

$317 7%

White Black Asian Hispanic

2007 (est.)

$7,910 79%

$853 8%

$455 4% $926

9%

White Black Asian Hispanic

Note: Figures add to more than 100% because Hispanics can be of any raceSource: Selig Center for Economic Growth, University of Georgia


36

Recent Hispanic HH spending dynamics show largest increases were in services-related categories

Source: “The Hispanic Buying Power Report, 2002”, Target Market News


% Changein Spending

Education + 18%Insurance + 13%

Charitable Contributions + 13%Healthcare + 9%

Cars & Trucks + 8%Consumer Electronics + 8%

Household Furnishings - 33%Personal Care Products & Services - 17%

Apparel - 11%

37

Estimated at 3.7 million Nearly two-thirds reside in

CA, TX, NY Combined buying power

of $292.4 billion by 2006 Many are small business

owners that reinvest in family businesses

Source: Merrill Lynch, 2003


Growth of “affluent” Hispanic HH’s outpacing general community

Growth in Number of HH's 1991-2000

+77%

+126%

Hispanic General Market

“Affluent” = $100,000+ HH Income

38

10. Media Dynamics

English networks under deliver Hispanics

*% Hispanic based on (000’s)Source: A.C. Nielsen, Sep-Nov 2003

TOP RANKED PROGRAMS

Total Hispanic

P18-49 P18-49 %

RANK PROGRAM NAME NETWORKRTG RTG Hispanic*

1 CSI CBS 9.6 2.6 4%2 FRIENDS NBC 9.5 4.3 7%3 E.R. NBC 9.2 3.6 6%4 FOX NFL SUNDAY-NATIONAL FOX 7.8 3.7 7%5 WILL & GRACE NBC 7.8 3.4 7%6 SURVIVOR: PEARL ISLANDS CBS 7.6 2.4 5%7 CBS NFL NATIONAL CBS 7.4 3.3 7%8 SCRUBS NBC 6.9 2.7 6%9 FOX NFL SUNDAY-SINGLE FOX 6.7 3.6 8%10 NFL MONDAY NIGHT FOOTBALL ABC 6.5 3.2 7%11 BACHELOR, THE ABC 6.4 1.6 4%12 CSI: MIAMI CBS 6.4 2.3 6%13 COUPLING NBC 6.3 2.4 6%14 NFL MONDAY OVERTIME ABC 6.2 4.2 10%15 CBS NFL NATL POST GUN CBS 6.2 2.1 5%16 EVERYBODY LOVES RAYMOND CBS 6.1 2.0 5%17 SIMPSONS-SUN 8:30P FOX 6.0 3.5 9%18 LAW AND ORDER NBC 6.0 2.2 6%19 8 SIMPLE RULES ABC 5.9 2.6 7%20 FOX NFL SUNDAY-PST GN-NAT FOX 5.7 3.0 8%

39

10. Media Dynamics

Top programs continue to be on Spanish 1992 season had 14 on English

Source: A.C. Nielsen, Sep-Nov 2003

TOP RANKED PROGRAMS P18-49

RANK PROGRAM NAME NETWORK RATING

1 NINA AMADA MIA TUE UNI 14.0

2 NINA AMADA MIA MON UNI 13.4

3 NINA AMADA MIA WED UNI 13.1

4 NINA AMADA MIA THU UNI 12.4

5 NINA AMADA MIA FRI UNI 11.6

6 VELO DE NOVIA TUE UNI 10.4

7 VELO DE NOVIA MON UNI 9.9

8 CASOS VIDA R: ED. ESP TUE UNI 9.7

9 VELO DE NOVIA WED UNI 9.7

10 VELO DE NOVIA THU UNI 9.5

11 MANANTIAL TUE UNI 9.3

12 DON FRANCISCO PRESENTA-WE UNI 9.2

13 CASOS VIDA R: ED. ESP FRI UNI 9.1

14 MANANTIAL THU UNI 9.1

15 CRISTINA-MON UNI 9.0

16 AQUI Y AHORA-THU UNI 8.8

17 MANANTIAL WED UNI 8.8

18 MANANTIAL MON UNI 8.7

19 VELO DE NOVIA FRI UNI 8.6

20 HORA PICO-SUN UNI 8.5

40

A very different list of top advertisers

(Ranking Based on 2002 Gross Media Expenditures)

Hispanic GM Hispanic GMRank Advertiser Rank Rank Advertiser Rank

1 Procter & Gamble 3 11 Americatel N/A2 Philip Morris (inc. Kraft) N/A 12 Vivendi Universal SA 543 General Motors 1 13 Bally Total Fitness N/A4 AT&T 31 14 J.C. Penny Co. 225 McDonald’s 15 15 Johnson & Johnson 86 Sears, Roebuck & Co. 9 16 Burger King 487 Coca-Cola 58 17 U.S. Army N/A8 Toyota Motor Co. 13 18 MCI Worldcom 809 Pepsi-Cola Co. 21 19 Colgate-Palmolive 91

10 AOL Time Warner Inc. 2 20 Yum Brands 40

10. Media Dynamics

Source: Hispanic Business Magazine 2002

41

Nearly half of Hispanic advertising dollars are on a local market basis

Source: Hispanic Business Magazine 2002

Media Advertising Expenditures Medium

Network/National TV 41%Local TV 21%

National Radio 7%Local Radio 17%

National Newspapers 4%Local Newspapers 6%

Magazines 2%Out-of-home 3%

TOTAL 100%

% LOCAL EXPENDITURES 47%

10. Media Dynamics

42

Background Developed by Yankelovich in

partnership with Cheskin 1,200 in person interviews, P16+ Seven top + three emerging markets Spanish and English interviews Weighted for population

11. Segmentation

43

The market can be visualized as falling into 12 segments based on Life Stage categories

11. Segmentation

44

Acculturation Definitions1. Hispanic Dominant

Persons closest to the culture of their country of origin Choose to retain as much of their Hispanic culture, language

and values as possible

2. Bicultural Persons that desire to retain as much as possible of their

Hispanic culture, while adopting aspects of U.S. Anglo culture as well

3. Assimilated Persons who have moved away from their Hispanic culture to

adopt U.S. Anglo culture, language and family values

4. Culturally Unique Persons not yet arrived

11. Segmentation

45

The Segments Defined

11. Segmentation

46

Young Progressives

11. Segmentation

47

Home Builders

11. Segmentation

48

Hearth Hearted

11. Segmentation

49

Prime of Life

11. Segmentation

hispanic 101 — an immersion january 2004. 2 three key themes 1.size & growth the u.s. consumer...

Documents