Multicultural Marketing

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Financial services marketers are taking the next step in reaching a multicultural audience.

Banking, insurance and investment companies have established multicultural marketing units and have graduated to searching for new assets with marketing campaigns created in the languages and reflective of the lifestyle patterns of ethnic consumers.

"Financial services has been, without a doubt, one of the last consumer areas to entertain the idea of ethnic marketing," says Ken Smikle, president of Target Market News, which monitors African-American consumers. "This has been a hard learning curve for the industry."

One stumbling block is lack of knowledge of the markets, observers say. At a recent conference of the Association of Asian-American Advertising Agencies, many speakers noted reaching specific ethnic markets is more complex due to language and cultural variations.

Wanla Cheng, principal of Asia Link Consulting Group, notes her company research found Mandarin-speaking Chinese are more affluent than Cantonese-speaking Chinese, and the most affluent group among Asians were Indians.

The interest in ethnic consumers among financial services companies is relatively new. The category got a boost in the 1980s with the Community Reinvestment Act, a federal law requiring banks to ensure access to credit in low- and moderate-income neighborhoods.

Retail banks have been leaders in this effort, under the CRA mandates, which sparked their efforts to attract minority customers and track their success, says Mr. Smikle.

"They were looking down the barrel of a government gun," says Mr. Smikle. "As a result, banks are more diversified in their [multicultural] services and they brought other areas along with them."

The CRA "made many companies jump," but it is market segmentation that keeps them jumping after multicultural segments today, says Rika Levin, former VP-retail marketing at Chase Manhattan Corp. In late October she took the post of chief marketing officer at Metropolitan Life Insurance Co. She forecasts that segment marketing will eventually be the norm in the general market, as well.

Chase has rolled its niche marketing efforts into one unit, which covers multicultural segments as well as women's and gay/lesbian marketing. Having the segments grouped under one roof makes it easier to get support from senior management -- a key ingredient, she says.

Chase's various multicultural efforts include in-language general advertising as well as below-the-line strategies such as direct marketing, events and online marketing. The unit recently broke a corporate branding campaign targeting Hispanics in New York and Texas with Spanish-language TV, radio and print advertising.

The unit markets the same products to ethnic consumers as it does to everyone else, but it tailors communications to the particular segment, says Ms. Levin. For example, in New York, Chase's standard operating procedure includes translating all branch material into Spanish, Korean and Chinese.

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"It's like a menu," says Ms. Levin. For example, focus groups found debit cards were more popular than credit cards among Hispanics and Asians, so efforts were refocused to promote those, she says.

Chase is not alone in tackling multicultural segments. Other companies have also noticed the potential. An executive at Met Life estimates ethnic consumers account for about 30% of the company's retail business, including insurance and retirement products.

In September, MasterCard International broke a TV campaign on Spanish-language networks, Spanish-language commercials. Washington Mutual, which already advertises in Spanish and Chinese, plans to create new campaigns in Vietnamese and French (AA, April 10).

Some marketers are tackling the multicultural affluent market. Ms. Levin says Chase's research estimates there are 2.5 million affluent Hispanic households in the U.S., a segment that has been undermarketed until now.

Good economic times have not skipped minorities, whose incomes have risen faster than white household incomes, says Mr. Smikle. He noted the booming market also benefited African-Americans, whose stock holdings rose from $4 billion in 1995 to $17 billion in 1997. African-American online investors are "the cream of the crop," he says.

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