LifeHealth.com : Emerging Markets: Lessons for leading in ethnic markets

Emerging Markets: Lessons for leading in ethnic markets

by Chris Mendoza

Chris Mendoza, LUTCF, is director of Multicultural Markets Marketing for Massachusetts Mutual Life Insurance Co. (MassMutual). He can be reached at www.massmutual.com.

In local communities and throughout the nation, the demographic landscape is changing, and with it, the voice and face of America. According to the U.S. Census Bureau the combined buying power of Asians, Hispanics, and African-Americans topped 2.2 billion in 2007, according to The Multicultural Economy, an annual report on minority group buying power produced by the Selig Center for Economic Growth at the University of Georgia's Terry College of Business.

By 2012, that combined buying power will reach $3 trillion, according to the same report.

Hispanic buying power alone has risen from $212 billion in 1990, when the Selig Center began its annual study, to $862 billion in 2007, representing growth of 307 percent over that time. By comparison, the combined buying power of all non-Hispanics in the United States grew 125 percent during the same period, according to the report.

More than 12 percent of the people living in the U.S. are foreign born, according to the U.S. Census Bureau 2005 American Community Survey.

Hispanic buying power alone has risen from $212 billion in 1990 … to $862 billion in 2007,

Among people at least five years old living in the U.S., 18 percent spoke a language other than English at home, according to the U.S. Census Bureau 2003 American Community Survey.

This enormous demographic, social and economic shift brings with it great opportunity, opportunity for insurance carriers who are creating programs and tools that help agents and advisors serve their clients well; opportunity for agents and advisors who are growing their practices by forging new relationships and strengthening existing ones; and opportunity for clients who are realizing and securing their parts in the American dream.

Essential to seizing these opportunities is an understanding of the nuances of the individual ethnic markets. Multicultural markets are highly complex, comprising subgroups with different languages, cultures and attitudes toward financial products and services. For example, the broad term "Hispanic market" could include residents from any number of South and Central American countries, each with its own cultural nuances. Similarly, another very broad term is "Asian," which could include persons who are Chinese, Vietnamese, Filipino and others. Segmentation of markets is key.

Multi-tiered approach

Building our success in culturally based markets was and continues to be a multi-tiered process that involves research as well as development of both home-office and agency resources. This effort is not as simple as translating a few brochures into another language and producing radio or TV commercials. It's more involved, far-reaching, and deeper. It's an effort to engage these ethnic groups literally where they live.

Here are a few of the key learnings that we at MassMutual have developed as we have focused on multi-cultural markets and continually enhance our commitment to them.

Research
Talking with agents who work in the markets is invaluable. To gain an understanding of how consumers view financial products and services in general, we completed primary research and supplemented our knowledge with secondary and industry research to gain a more complete understanding of multicultural groups. Those learnings were supplemented with traditional focus groups to determine what motivates consumers to purchase financial service and protection products in general.

Recruiting
There are two avenues for success in the market. First, recruit bilingual and bicultural financial representatives. Second, identify existing producers who are already active in the markets or those who demonstrate cultural sensitivity to work in the market. By doing this, a company's potential success is enhanced when marketing to ethnic consumers. As with traditional marketing, the face of the company must resonate with prospects to encourage them to establish lasting relationships. To be in these diverse communities, you must become part of the communities. Being members of the community and, for example, actively engaging in events like religious holidays and ethnic festivals can help create branding and name-recognition opportunities. To further our goals in this area, we have hired a director of diversity recruiting to assist agencies in recruiting to specific ethnic markets.

Brand-building
Consumer brand recognition is key to success in multicultural markets. Prospects need to know and recognize the brand within the context of their own culture and experience. Ways to reinforce the brand include participating in local community events, actively engaging in community centers, educating consumers about products and services, and advertising in the language of selected markets to increase visibility of the company and agents. For example, our company is working with two advertising agencies that specialize in the Asian and Hispanic markets to develop a plan for building brand recognition in these markets. They are well-respected players in the multicultural marketing world.

Marketing support
Advertising and marketing materials in the language of the market are important, and materials should "look" like the markets they want to attract. For example, we now have consumer brochures in Spanish and Chinese and they reflect the culture and people of the markets we want to serve.

Cross-organizational coordination
Making sure that each of the company's departments, whether related to marketing or not, are aligned in pursuing diversity and embracing multiple cultures requires significant coordination. Empowering a senior-level person within the organization to pursue and ensure that coordination can be an effective strategy.

A stepped approach
Taking on such a significant endeavor can be an intimidating task. It's also a process in which each experience will produce learnings upon which you can build and that will help you be increasingly successful. To make the endeavor "do-able", consider approaching select markets in select regions. For example, build upon existing efforts by concentrating on supporting multicultural marketing efforts already under way in the field and by focusing initially on a smaller number of markets where agencies are already engaged, and build upon that experience to develop other consumer segments over time.

As the face and voice of America change, we owe it to ourselves, our practices, our companies, and, most importantly, our clients to change along with them. We're changing the way we do business in order to better serve the needs of the diverse marketplace. To support our internal efforts, MassMutual recently created the position of vice president of diversity and inclusion, a position intended to develop and implement the company's diversity and inclusion strategy and ensure cross-departmental coordination. Our transformation is underway, both internally and externally.

By taking a multi-tiered and culturally sensitive approach, and by learning from our past experiences and those of others, we can successfully serve our country's newest and fastest-growing markets.