CPG Cuts Put Pressure on Multicultural Units

Irresistible Force of Multicultural Growth Meets Immovable Object of Budgets

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For all the discussion of multicultural marketing over the years, the industry has never quite settled on a best practice for how to organize and implement it within a company. Now the fact that multicultural consumers are playing an increasingly important role for just about every brand and category has run up against another force with at least equal weight and momentum-cost cutting.

As marketing departments at many places have gotten leaner, multicultural marketing units at some companies are getting either smaller or are being run by more junior executives, said Graciela Eleta, who formerly ran Procter & Gamble Co.'s multicultural marketing operations and is now a senior adviser for consulting firm Latinum Networks.

The other reality is that it's harder for marketers in the North American units of big multi-brand companies to get funding to develop creative even for the U.S. general market, she said. At a time when such marketers as P&G, Unilever and Colgate-Palmolive Co. are trying to make the same creative ideas and sometimes even the same ads work across North America, Latin America, Europe and Asia, doing separate creative solely for the U.S. Hispanic market has become a tougher sell at some companies. (However, P&G, the biggest Hispanic marketer, spends more than $200 million a year on Hispanic media.)

Ms. Eleta said there's long been a "pendulum" in the industry. Marketers move to push as much multicultural marketing development to general-market brand groups as possible, then realize that as their multicultural "centers of excellence" thin out or go away they've lost valuable knowledge.

Companies shepherding one or only a handful of big national brands, such as retailers Walmart, Target, J.C. Penney, Macy's, AT&T and Verizon have it easier, she said, because they can readily have multicultural experts who are very focused.

The Association of National Advertisers' multicultural committee has close to 220 members, and the group's annual multicultural conference draws about 650 attendees.

While P&G's restructuring of recent years has moved much of the organization where its multicultural marketing experts resided to the brand groups in its global business units, the company "still has dedicated experts on this," said Global Brand Officer Marc Pritchard, in what he called "pretty much a small consulting group" led by Associate Marketing Director Laura Koenig. Her group manages multi-brand "scale" programs such as "Orgullosa" for Hispanics and "My Black Is Beautiful" for African-American consumers, in addition to consulting with the brand groups.

But Mr. Pritchard said brand groups ultimately are expected to lead marketing for all of their consumer segments. And beyond TV, where many of P&G's brands are running Spanish translations of general-market copy, "there's a huge upside potential for multicultural marketing now, because you can target the consumer more effectively in a range of ways," he said, "through digital, mobile and social."

A P&G spokeswoman said the company's multicultural experts are divided between brand teams and the centralized group in brand operations. But she said the company no longer has its multifunction Multicultural Business Development Organization "because we've moved beyond the time when we need a separate organization to serve multicultural consumers."

Accommodating the shift toward general-market brand managers is the "total market approach" embraced by many multicultural marketers, which melds most of a brand's marketing efforts in a single plan with a mind toward the growing importance of ethnic consumers.

One example of the approach would be Kimberly-Clark Corp.'s "Celebrate Fun" program, a multi-brand promotion run out of its multicultural marketing group but based on the notion that Hispanic and African-American consumers are the biggest growth drivers for many of the company's key brands, including Huggies.

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