Buyers cross borders

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When immigrants arrive, they bring along brand preferences for everything from drinks to detergents that give some marketers a built-in advantage in multicultural markets.

"There's no question that when you come to the States, you bring with you the brands you know, " said Salma Gottfried, director-client services at Omnicom Group's Dieste, Harmel & Partners, Dallas.

For Mexicans, the country of origin for two-thirds of the U.S. Hispanic population, that includes products like Jose Cuervo, the No. 1 tequila in both Mexico and the U.S. Jose Cuervo is about to name Dieste to its estimated $2 million U.S. Hispanic account for its Especial and Tradicional tequilas.

Now the challenge is to "take a brand from Mexico and continue to make it relevant to Mexicans in this country," said President Tony Dieste.

Often, the brands immigrants used back home are American. Procter & Gamble Co. and Colgate-Palmolive dispute who leads the U.S. toothpaste market, but Colgate beats Crest among Hispanics, with a 59% market share to 19% for P&G's Crest, Colgate Chairman-CEO Reuben Mark said in a recent conference call with analysts.

border-crossover effect

In soap, Colgate brands Palmolive and Ajax have a 55% share of the U.S. Hispanic market to P&G's 35%, though they trail P&G's 43% share in the general market by about four points, Mr. Mark said. The key reason: Colgate's market share of around 80% in Mexico for both brands.

As U.S. Hispanic-population growth continues to outpace the general market, strength in Latin America, particularly Mexico, increasingly pays off.

"We [Hispanics] cross the border as brand loyalists to Colgate and many of their products," said Isabel Valdes, a Hispanic-marketing consultant and author who has counted both Colgate and P&G as clients. The advantage fades as a growing proportion of the Hispanic population becomes acculturated, she said, but overcoming leads of the stronger Latin American brands can take decades.

Colgate isn't the only company to benefit from the border-crossover effect. Coca-Cola Co. and Wal-Mart Stores enjoy disproportionately strong positions among U.S. Hispanics thanks to their market leadership in Mexico, Ms. Valdes said, though Pepsi has been closing the gap with a strong U.S. Hispanic-marketing program. Mexico is Coca-Cola's biggest market after the U.S., and Wal-Mart is Mexico's No. 1 retailer. In Mexico, Coke's Fanta, discontinued in the U.S. for decades, is still popular, giving Coke another strong U.S. Hispanic brand after relaunching Fanta in 2001, she said.

Just as Pepsi is fighting back against Coke with a big Hispanic effort, P&G says sales of Crest toothpaste are up 10% among Hispanics since it launched Crest Whitening Plus Scope a year ago. The effort was backed in part-by the Spanish-language spot by Publicis Groupe's Bromley Communications that P&G retagged in English to air during the Grammy Awards last month. P&G is the biggest U.S. Hispanic advertiser, spending about $70 million a year.

"Brands like Procter and Target have to build the heritage," Ms. Valdes said, "that some of their competitors developed in Latin America."

And not just in Latin America. In China, Coca-Cola beat Pepsi into the market by 15 years, and it shows-in California.

"At Asian retail chains in California like Ranch 99 [grocery stores], you see enormous shelf presence for Coca-Cola and significantly less for Pepsi," said Saul Gitlin, executive VP-strategic services at WPP Group's Kang & Lee.

Mr. Gitlin said that in market research, viewers of KTSF-TV, an Asian TV channel in San Francisco, index highest for consumption of Coke.

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