ON THIS MULTICULTURAL FRONT, MYSTIQUE HOLDS BACK MARKETERS

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Multicultural is a word that generates much buzz in marketing circles these days. But most of the attention that does get paid to minority marketing is focused on the two largest groups, African-Americans and Hispanics. A third, Asian-Americans, is largely ignored -- or, worse, shunned.

There are several reasons that's true. African-Americans and Hispanics represent more eyeballs and greater spending power than Asian-Americans, for one. And Asian-Americans aren't actually one market but consist of many languages and cultures. What it mostly comes down to, though, is a simple sociological fact: Many non-Asians don't understand -- and don't want to understand -- Asians.

Eliot Kang, armed with a wicked sense of humor, and backed by the deep pockets of Young & Rubicam, is out to change that.

Kang, a bright, handsome 38-year-old whose family immigrated from Korea when he was 11, at first fumbles for words as he tries to describe typical reactions to Asian-Americans. "People have a real . . . " says the president-CEO of Kang & Lee, New York, holding his arms at his sides and waving his hands as if to say, "Stay back."

"Asians have a whole mystique," he says finally. "People are not comfortable with them. And you can't feel comfortable marketing to someone if you yourself are not comfortable with them."

Kang, whose agency was sold to Y&R six months ago, has already come a long way. He started 15 years ago with a tiny shop that bought space and translated and typeset ads for Asian-language media. (Humorous aside: The agency was first called Amco, but dropped the name after getting too many calls from people looking to get their transmissions repaired.)

Today, Kang & Lee has more than 100 employees and clients include AT&T Corp.; Sears, Roebuck & Co.; BankAmerica; Seagram Co.; United Airlines; the U.S. Postal Service; and The New York Times. If Ad Age data are to be believed (and they are), Kang & Lee is the 271st-largest U.S. agency, with 1998 gross income of $8.9 million on billings of about $65 million.

Most of the budgets Kang & Lee deals with are relatively tiny, in the $1 million to $5 million range. Those dollars often cover at least three campaigns, one each for the Chinese, Japanese and Korean markets. That can present a problem when it comes to compensation. At a time when most agencies are paid quite a bit less than a 15% commission, Kang & Lee's fees can amount to 20% or more of media spending.

Trying to explain to marketers why it needs to charge that much, Kang says, is probably a more difficult hurdle than convincing them they can't reach Asian-American consumers through general-market media. "The budgets are so small," he says, "and we do so much work."

The Asian market itself is by no means small. While there are about 35 million African-Americans and 30 million U.S. Hispanics, Asian-Americans number about 10 million, with spending power topping $100 billion.

The categories that have been slowest to recognize the need to market to this group are package goods and automotive, though the latter has been coming around. As for the former, Kang sighs, "Package goods is a real mystery, and unless it comes in this market is not going to grow. You have all this opportunity to grab market share. From toothpaste to soap to shampoo, whoever comes in first is going to own it."

And Kang's not looking for handouts. "Being politically correct? Forget it," he says. "Make it a business decision."

One thing working in his favor is the rise of multicultural marketing. With companies such as Y&R and True North Communications placing their ethnic resources under one umbrella, more marketers are beginning to think in terms of the combined clout of the leading minority groups.

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