This article was published in the QRCA Views magazine, Spring 2003. To access the published version of this article please click here.
By: Ricardo A. López - President, Hispanic Research Inc.
Many articles have been written about the growth of the U.S. Hispanic population, and most of them center on the astounding population numbers. The 2000 Census reported 35.3 million Hispanics living in the United States, that is 12.5% of the total U.S. population. From 1990 to 2000, the Hispanic population grew by 13 million people- which represents 40% of the total population growth during this period. There is no doubt that the numbers are impressive, and marketers can no longer ignore the Hispanic market growth. Many QRCs are finding that in order to serve their clients well, they need to include Hispanic participants in their research sampling. Yet, the U.S Latino market is extremely complex and generally misunderstood. This article aims to present a framework of knowledge that will hopefully help you understand why it is difficult to target Latinos and to decide how you can effectively serve your clients’ Hispanic research needs.
If your clients have not yet asked about conducting research with Hispanics, they will. Companies all over the world are trying to tap into the U.S Latino purchasing power- a measure that has skyrocketed in recent years. According to the University of Georgia’s Selig Center (www.selig.uga.edu), the Hispanic purchasing power stood at $452.4 billion in 2001- a 118% increase from 1990! The U.S. Census information concurs. The 2000 median income was the highest ever recorded in real terms by the CPS for Hispanic households. As a group, U.S. Hispanics spend more money on consumer goods than do people in most other Spanish speaking countries.
The U.S. Hispanic market, however, is not a cohesive group of people that can be easily defined. The U.S. Hispanic market is, in fact, complicated and multifaceted. While 58% of the market is of Mexican origin, the Mexican segment is very diverse; including Hispanics that have been in this country for over 7 generations, and many who just immigrated recently. There are at least 19 other Latino country sub-groups and there is very little in common among many of these Latino markets segments. Even language can drastically vary. Geography, age, and acculturation, can further muddle the market image. Yet there are traits that unite all Hispanics as a group; and most importantly, Latinos in this country consider themselves to be members of the group
While Hispanics do see themselves as members of the Hispanic community, it is worthy to note that they did not belong to this community before setting foot on American soil. In fact, it surprises many to hear me say that there are generally no Hispanics outside of the United States. In Colombia there are Colombians, and in Mexico there are Mexicans- residents of Latin American countries do not consider themselves Hispanic. It is also interesting to point out that the term Hispanic itself is an American term. In our zealousness for classifying people, the term was “invented” for research purposes. Yet, today there is a true and united Hispanic community. How then, do you define Hispanic?
It is easier to define what Hispanic is not. Hispanic is not a race. As I like to say, we could not have invented a race when we started to use the term. Yet, the confusion originated with the first uses of the term. Many in research, and particularly the U.S. government, used the term in questionnaires as a race classification. To this date, I continue to see the term used in that fashion, even though the government corrected itself many years ago. Perhaps the confusion stemmed from the fact that many of the people of Latin American origin exhibit mixed raced characteristics. Most Hispanic races are Caucasian, Black, Native Indian, or a mix of the three. Yet other races like Asian also exists in the Latino community. Ethnicity is more important than race, and Hispanics do share many cultural and ethnic traits across all Latino market segments.
We talk of Hispanics as a group because there are some strong common traits among the Latino sub-groups. Some traditional and colonial Spanish values transcend the different Hispanic cultures. The family, as an example, forms the nucleus of Hispanic life, regardless of country origin. Hispanics also tend to be conservative/traditional in their cultural lifestyle. Other common traits include their desire to identify and belong to a group, their laid-back attitude, and of course, their language. You may already know many of these traits that link Hispanics together, but in order to truly understand the Hispanic market, you must also understand why they behave the way they do. Hispanics are very different from the general population in many ways, and trying to predict Latino behavior based on general market knowledge is a recipe for disaster.
Let’s take a look at some key differences. What is it that motivate people to come to the United States? Most Hispanics came to the United States for economic reasons. Unlike earlier immigration groups who fled their country of origin because of political or religious reasons, Hispanics came, and continue to arrive, in search of financial stability (one exception is the early Cuban immigration). They see this country as the land of “economic” opportunities. In contrast, early European immigration to the U.S. was very different. Years ago people embarked on life changing journeys to a new country with a profound determination to start a new life and to never look back. They were often breaking all ties with their country of origin. That has changed. Today’s immigrants’ posses the ability to take a step into the U.S., while keeping a foot firmly anchored in their country of origin. Latino immigrants have more ties to their homeland than any prior immigration group. Modern communication technology facilitates the upkeep of these bonds. The Hispanic dreams of and their behavior motivators are intricately tied with the country of origin. Differences in the Latino immigrant goals and ambitions are essential in understanding the Hispanic market consumer behavior.
As an example, let’s study the mindset of the typical Mexican immigrant of today. The Hispanic population increased by 57.9% from 1990 to 2000 and most of that increase (53%) was fueled by an increase in people of Mexican origin. The reality is that most Mexicans move here with the idea of staying just “temporarily”. They are in constant communication with their relatives in Mexico- by telephone. They travel back often because transportation is readily available and inexpensive. You can fly roundtrip from New York City to Mexico City for less than $400! They stay abreast of everything going on in their homeland by watching Mexican programming in U.S. Spanish television. Their aspirations are not U.S. based. These Latinos often see themselves moving back.
In many cases, it is the Latino male who arrives in the U.S. first. Their original thinking is to make enough money to return to their families. As time goes on, many men find it more feasible to bring their family to the U.S., while they continue their pursuit for financial independence. Even at this stage, many new immigrants still only dream of making enough money to retire to their homeland. The reality, however, is that most immigrants end up staying. Once they live in this country for a few years, they start to release those bonds with their country of origin by strengthening ties with a new homeland. These new ties become stronger when new immigrants have children born in the U.S. Their aspirations begin to change.
It is usually the Latino male who starts the process of acculturation. They are often the breadwinners, and the ones who learn to speak English at work. In many cases, they have also been here longer, and are more likely to understand the U.S. culture. The family sees them as more “in tune” with how things work in the U.S., and defer to them for any business decision-making. These Latino men, however, are often young and inexperienced. Their business decisions are not always sound and many are learning through very difficult life experiences.
Hispanics, for example, know very little about finances, and about credit cards in particular. As companies start marketing more heavily to Latino consumers, many Hispanics families are beginning to fall into the credit card trap. Using credit to buy things that make them feel successful makes sense when you study what motivates the Hispanic community. That is because part of the U.S. appeal is the sheer availability of products and services and the ability to make money, and to borrow money, to buy those products and services. The Hispanic American dream is largely based on monetary fulfillment.
As a result, Hispanics are extremely concerned with appearances. If their Hispanic American dream is not yet fulfilled, they will do what they can to make it “appear” as if they are well on their way. This is very important to U.S. Latinos. Many came to the U.S. leaving behind their family, their friends, their land, and their culture. Coming here was a sacrifice and they endured that sacrifice in order to financially live a better life and to provide a better life for their family.