Marketer’s Watch: The new cross cultural reality

Marketing communications and advertising must change to consider that the convergence of cross cultural values around the world is impacting the way people think, connect, communicate and behave. Thus, in place of traditional demographic segmentation criteria, I propose that in order to craft meaningful, engaging creative strategies and ideas that are relevant to this new human reality we must begin to study the consumer market on the basis of their level of cross cultural engagement and its effects on preferences, life choices and shopping behavior. By definition, culturally-specialized strategic companies and agencies are better suited to address this transformation than are global generalist shops because we are more deeply attuned to cultural insights and their influence on consumption behavior. Properly harnessed, we can transform the ad industry in the U.S. and potentially, in the rest of the world.

Bold? Yes!

In the U.S., general, ethnic, demographic and multicultural market segmentation is no longer valid. Simplistically, this approach predisposes that each group belongs in its own individual, homogeneous, cookie-cutter box. Likewise, global marketing predisposes that human needs and wants are universal in principle therefore “universal ideas” are created for all regions of the world however, they seldom deliver optimal performance at the local or regional levels. This cross cultural reality is also evident in East & Western Europe, Asia, Latin America and other parts of the world, but for argument’s sake in this post and in the interest of time, I will focus on the United States.

By definition and historical chronology:

General market = Global in nature: everyone, anytime, anywhere.

Ethnic market = Segmentation by ethnicity: Hispanic, African American, Asian, East European, etc.

VALS = Gen X, Gen Y, Millenials, Moms, traditional marketing/advertising segments that associate certain values with demographic & psychographic criteria to define a target group.

Multicultural markets = Lumps all non-white groups into one broad segment based on ethnicity or country of origin. This approach places importance on reflecting a “multicultural reality” at the executional level by depicting various ethnicities in a universal situation, in one creative campaign or addressing all ethnicities with a universal idea based on a universal insight. We call this the political check-box.

Urban markets = Fundamentally a demographic terminology that labels African American, Latinos and to some extent, Asian youth that live in large urban centers across the U.S. and somewhat/sometimes converge in very specific lifestyle activities but who are culturally and ethnically distinct at the core.

LGBT markets = Also a demographic terminology that labels Lesbian, Gay, Bisexual & Transgender people who share a lifestyle based on their sexuality and sexual preferences.

The new Cross cultural market = Heterogeneous consumer groups of all origins, ethnicities and sexual preferences that are influenced by and who influence each other based on socio-cultural criteria and related value choices.

The emergence and pervasiveness of new cultural influences over American culture are creating new, multidimensional, psychologically complex personas that cross cultural boundaries and are demonstrating deep, transformational change in their preferences, choices and shopping behavior. This is most dramatically seen in categories such as food, fashion, personal care, entertainment, among many others, as well as in social & environmental consciousness and politics/government policy. When we overlay the impact of digital & social media over these cultural dynamics, we have an unbridled force that has the most sophisticated marketers seeking for ways to regain control of the uncontrollable. It is the force of a new breed of consumers who are now not only in control of their choices but of the cultural influences they choose to make their own.

The most basic instinct of human nature is to resist change, to hold on to known truths and beliefs. So while some marketers and ad agencies are recognizing this new reality, many continue their attempts to address it with the tried and true methods that helped them in the 80’s & 90’s, generating thought-stagnation across many business sectors.

Free enterprise, consumption and profitable businesses are at the core of our economic system. In these challenging times, we must look deeply into the transformation of our industry in line with that of the consumer constituencies which we serve. More importantly, in order to deliver strategic brand-building for our clients in this new environment we must catalyze economic and financial recovery through a deeper understanding of the cross cultural influences that impact consumer behavior.

The new game: are you in?

Everyone in recent days is ranting and raving about the impact that Census 2010 will have on multicultural marketing, in fact, on marketing as a whole. And with good reason! Truth be told, 50 Million Hispanics in the U.S. today, growing 4X faster than the general population. Yes, of course the composition of the total market WILL change!!!

We’ll see more US born than immigrant population; the number of younger Hispanics will be higher than expected; and, we will see a stronger affluent segment and an increasing middle class among Hispanic families that did not have a mortgage and 401K savings in 2008.

 But these are the expected changes, not the most revealing realities marketers will need to address in the next decade. I predict that the most pervasive reality of the decade will be how Latino culture continues to influence American culture and  trends to establish a new American reality that predisposes a very different approach to marketing  as it relates to strategy, messaging and activation. It’s a new game and it requires a game-changing approach.

 We are no longer looking at a culturally homogeneous consumer market in the United States. The Hispanic consumer can no longer be simplistically segmented based of country of origin or level of acculturation alone, nor can we view the Black population as African Americans born in the US who share the values of Black brotherhood and heritage. We are increasingly confronted with a much more complex New American make-up that is inter-racial, diverse and therefore, cross-cultural.

The term cross-cultural should by no means be confused with the broadly used term multi-cultural or the topic of diversity. In these cases, we simply acknowledge that there are different demographic groups that are represented in a brand’s target definition which dictates that there needs to be a programmatic and executional recognition of this reality within a campaign or that targeted campaigns for each must be part of the brand marketing mix.

 Rather, a cross-cultural dynamic is one where peoples of different cultures influence one and others and adopt values from each other to create a new set of values as a group. These values are then manifested in individual and collective behavior; in lifestyle choices; and in emerging cultural currents.  

 At Redbean Society, we define cultural currents as those trends that become so widespread and pervasive that they become embedded in society across cultural groups and demographics and mark substantive behavioral change. Some great examples of cultural currents are the green movement, Obama-ism and online social networking, to name a few.

 Understanding the cross-cultural dynamic and how it’s becoming a cultural current is paramount for the future of brand communications because (a) we must begin to target differently; and (b) it becomes the lens through which consumers engage.

Take my zumba dance class in mid-town Manhattan. Zumba actually emerged as a Latino influence. It does not exist in Mexico or Puerto Rico. It is not a dance genre from any country but rather it emerges in the U.S. and merges Latin and Afro-American musical rhythms with aerobic movements and exercises.

We dance to hip hop, salsa, belly-dancing, samba and merengue and attendees are white, black, Mediterranean, Indian, Latino and other brown; WASP, Jewish, Catholic, agnostic, Evangelist and Muslim. We share several passions: we dance literally, till we drop; we want to be physically strong, sexy and gracious; we want to have fun; we share a similar type of energy. And we are very obviously a target group for sports shoes and apparel, organic and green, sports beverages, music companies, all natural foods, popular dance TV shows, bottled water …and more. 

We influence one another through a lifestyle activity we have adopted as a result of living in one of the most diverse cities in the world.  In contrast to the Anglo-ladies it’s clear the Latinas and Indians in the class don’t really want to look like sticks; that we love our curves and we’re not shy to shake it all! That said, I am quite impressed with one or two Non-Hispanic American women who have actually learned to move like us!! In fact, the best dancer in the class is a 27-or so-year old WASP from the Upper East Side who has never seen the tropical sun and definitely did not learn to dance at our family parties like most Latina women did.  (But I have no doubt that she was Latina in her past life.)

Is Zumba a trend, or a cultural current? I challenge it’s a trend. The cultural currents in this case are the fact that cultures are converging and influencing one another and the emergence of Latino culture as the protagonist and catalyst in this convergence. The marketing challenge is how to leverage this dynamic on behalf of our brands.

I just made it back from the ANA’s Masters of Marketing conference last week where about 1,000 other marketers  were exposed to many game-changing, brilliant presentations and discussions with the CMO’s of some of the best marketing companies and iconic brands in the world.

For all marketers, the common thread is growth in an economic crisis. For some, like General Mills, Walmart and McDonald’s, it’s the recognition of the role and potential of multicultural consumers in shaping their business strategies and marketing programs. But more importantly, the acknowledgment of their influence on their product, the diversity of their employees and their advertising, among others.

And here we say, ask not whether you can stretch your budget or afford to target another segment than the general market.  Ask yourself, how can you afford NOT to? How can you oversee tangible evidence of growth opportunity?

Like McDonald’s, General Mills and Walmart, more companies need to view their marketing and communications strategies first, from a cross-cultural perspective. Not only for the numbers we represent but for the level of influence we are empowered to exert. Those that refuse to make this shift will remain baffled with the lagging indicators of their business performance while those that swiftly learn how to master the art of cultural engagement will rise to the top of their pack.

The two faces of ‘La Crisis’

If there is one major aspect of our lives today which has impacted us all, regardless of ethnicity, race or socioeconomic status, it’s the state of the economy. ‘La Crisis’ has truly changed all of us deeply and pervasively. It has touched all Latinos and most especially, it has touched Latina women as the main stakeholders of her household’s buying power. This is a most important detail, as this consumer segment currently represents 20% of all women 15-49, a good 10 Million women, younger and growing at almost 3 times the rate of non-Hispanic women.

Latina women are wise shoppers that seek brand value at the lowest price point she can find, they are knowledgeable, savvy and most definitely on “experimentation” mode. Hence, an ideal breeding ground for the intrusion of private label brands in the once secure world in which “Hispanic women are more brand loyal” and a big threat to major marketers who seek growth in an overall marketplace that’s not growing and increasingly competitive.

Marketers, wake up and smell the chiles!

There is a double-whammy here. The first is the impact of the economy on your base business; and the second, is the resulting impact on marketing your brands to the only growth segment in the U.S. today.

Private label brands are re-taking their strength with new form. At risk of dating myself, I remember when private label packaging was ugly, black & white in some cases  looked more like products we’d find in Communist Russia or the Cuba of the 60’s. Moreover, the product quality was for the most part second-class.

Next page. Today’s technology and the commoditization of manufacturing capabilities allow retailers to package private label brands that are just as appealing as most great brands we know, becoming one of the biggest challenges for CPG marketers.

So how do we build brands in today’s marketing environment? How do we secure choice? Most certainly, not like we did in the past.

Latina women are building communities online and offline faster and deeper than their non-Hispanic counterparts. This should not surprise us. Culturally she is more socially gregarious, so she has truly embraced the pervasiveness of online communication to connect with her friends here, her relatives back home and even other women she doesn’t even know, but who share her passions, worries and interests. At the same time, she engages as an active influencer in her local community and neighborhood, taking a leadership role towards social change. So this consumer is not about passive choice; she is all about authentic interaction, experimentation and change.

Brands can inspire this woman by ensuring cultural relevance in their communications through the study of insights that trigger consideration and choice. We don’t talk to her, but talk with her about what’s important and meaningful. Marketers who continue to emphasize one-sided, brand-2-consumer messages with this woman are totally missing the point. Latina consumers are not a non-descript audience that falls on a straight line on a flow chart as “Hispanic Moms 18-49”. They are real people who are seeking brand experiences and having open conversations with each other as well as with brands. Today, these consumers are not the receptors of one-sided messages; they are the medium for advocacy and engagement in the fastest growing consumer segment in the U.S. today.

‘La Crisis’ will continue to affect overall sales for just a little longer. But marketers that seek, engage and retain new Latino customers will win the game as we move forward, when the value of this market soars to $1.3 Trillion by 2013. By the way, the chiles are great…