Marketers are increasingly using targeted couponing, sampling and other promotional efforts as a way to build brand loyalty, initiate trial and generate sales among non-Anglos.
Population and economic statistics are spurring the efforts. A burgeoning minority population is spending heavily.
The African-American market spends about $350 billion annually; Hispanics about $200 billion a year; and Asian-Americans about $120 billion yearly, according to industry sources.
"There is no question [ethnic promotion] is a growing industry. Marketers are becoming more aware of [the Hispanic market] because of the importance of it and the size of it. You can see the growth and it is explosive," says Roy Cook, managing director, Impact Media, New York and San Francisco.
Impact Media specializes in door-to-door sampling programs to demographic groups (Hispanics, African-Americans), store trading areas and competitive user groups. Brightly colored custom-imprinted plastic bags are placed on the doors of more than 25 million of the total 100 million U.S. households weekly through a network of distributors.
A special Hispanic co-op sampling program is now done twice yearly, in November and April/May.
"The numbers of Hispanics are growing and they respond very well to samples because they don't get a lot [compared to white households]. They look at samples as if they are a gift. Also, families are inter-generational-they tend to include children, adults, grandparents. It is an unbelievably growing market," says Mr. Cook.
The Hispanic population of the U.S. is estimated at 26.4 million this year, and is projected to hit 29.5 million by 2000 and 41.2 million by 2020. The average household size this year is 3.5, according to Strategy Research Corp., a research company.
Mr. Cook contends that, for marketers trying to reach Hispanics, door-to door sampling is preferable to direct mail, in-store and newspaper sampling programs because of lower cost, greater household penetration and trial, greater selectivity, less duplication and sample waste, shorter lead times and lower cost per targeted household.
Impact Media clients that participate in Hispanic programs include General Mills, Thomas J. Lipton Co., Kellogg Co., Nestle USA, Pepsi-Cola Co. and Procter & Gamble.
"Five to 10 years ago, [sampling to Hispanics] was not a significant part of our business and today it is a substantial part of what we do," Mr. Cook says.
In order for marketers to be sure their efforts are on target, they must understand the characteristics and behaviors unique to each culture. In 1990, Mexicans made up about two-thirds of Hispanic households, with Cubans, Puerto Ricans and others comprising the rest, according to American Demographics.
General Mills tied-in with the Florida Marlins baseball team and a local Hispanic TV station for a promotion of its cereal brands.
In the promotion, TV spots showed the camera crews going door-to-door, with the announcer talking to residents in Spanish, asking them to show boxes of General Mills cereal in order to win free tickets to a Marlins game.
General Mills' promotion agency for Hispanics is Boone DeLeon Communications, Houston, and Casanova Pendrill Publicidad, Irvine, Calif., handles advertising directed to Hispanics.
Coupon and sampling efforts to the African-American market are also increasing. African-Americans comprise about 12% of the 260 million U.S. population.
Nia Direct's co-op mailing program targets African-Americans in the top 25 markets. The mailings get retail and radio support.
Nia's Coupons For Savings feature an African-American woman prominently on the envelope, a la Donnelley Marketing's Carol Wright program. The back of the envelope also lists local participating retailers and brand marketers.
Radio ads on urban-formated stations announce the arrival of the coupons and the participating advertisers.
"Our whole focus, now dictated by clients, is to develop more of an in-store presence," says Andrew Morrison, president of Nia Direct. "Supermarkets in African-American neighborhoods are underserved. We'll do more in-store work now because there is little in-store sampling [and] trade dollars. So many brand managers look for in-store promotions and tie-ins."
Nia Direct is handling the in-store efforts itself. Current supermarket signage touts "Did you bring your coupons?" and lists all participating brands.
Nia Direct has five mailings scheduled between January 1995 and January 1996. The next mailing, The Summer Sizzler, will be delivered in May to two million of the estimated 10 million U.S. African-American households.
Kraft Foods, Quaker Oats, Black Entertainment TV, Time Warner, Columbia House, and AT&T Corp. have participated in past mailings.
African-American households don't get their fair share of coupons because many of them aren't reached via Sunday newspaper inserts, says Mr. Morrison.
"We help marketers realize you are not discounting your brand by couponing; you are building brand loyalty because you are reaching someone you never got before," says Mr. Morrison.
Marketers' response to the African-American couponing effort has been strong.
"The closer you can get to the customer, the better-talk their language, represent their lifestyles, make sure the product is relevant to their lives. Targeting makes a lot of sense," says Steve Bachler, direct marketing manager at Kraft Foods, which targets the African-American market for its Kool-Aid brand.
AT&T sponsored the envelope of Nia Direct's February mailing promoting Black History Month. The envelope featured an African-American family viewing a picture of Egyptian pyramids on an AT&T desktop system, and AT&T also enclosed an ad insert for its True USA program.
"AT&T partners with many organizations to more effectively reach our customer base. Since Nia Direct has expertise in reaching the African-American market, this special promotion helps [us] better reach this community," says Joseph Coles, manager of African-American consumer markets for AT&T.
MPI Coupon Distribution, Sacramento, Calif., is another major direct marketer targeting African-Americans. MPI delivers envelopes to about five million black households.
"We've seen a fairly strong increase in business. The more targeted we become, the more our business is growing. That reflects the trend toward increased targeting," says Darryl Mobley, CEO of MPI.
MPI ties into causes that are vital to the African-American consumer, including the United Negro College Fund, the Sickle Cell Disease Foundation and Just Say No to Drugs. Participating marketers provide a percentage of coupon redemption to these organizations, Mr. Mobley notes.
MPI also did a mailing for Black History Month, in February, and it benefited UNCF and Just Say No to Drugs.
Brands in the February mailing included those from P&G, Colgate-Palmolive, Pillsbury Co., Sara Lee Corp., Quaker Oats Co. and Revlon.
Product marketers in key categories are realizing they can't be No. 1 if they don't have black consumers, Mr. Mobley says. Those categories, he says, include bleach, detergents, mouthwash, powdered beverages, non-refrigerated and non-carbonated drinks such as Hawaiian Punch, analgesics and lotions.
The $120 billion Asian-American market is getting increased attention from marketers because the group has a high income and its population is growing fast.
Last fall, Sears, Roebuck & Co. became the first major retailer to formally target Asian-Americans, and named Amko Advertising, New York, to develop a retail strategy for that growing segment.
The key mistake marketers make when they approach Asian-Americans is they neglect to note the many segments that comprise the market, says Toyo Shigeta, president of Nova Promotion Group, a subsidiary of Dentsu based in Hackensack, N.J. Splintering and targeting is the key to being successful.
"From American marketers' point of view, the Asian-American market is one market, but it consists of [many] races; it's not one unified market. That is a big mistake," Mr. Shigeta says.
According to 1991 estimated U.S. Census statistics, Asian-Pacific Islander includes Asian Indian, Chinese, Hawaiian, Japanese, Korean, Phillipino, Vietnamese and others.
Asian-Pacific Islander accounts for about 3.5% of the total U.S. population. On average, the group's household income is higher-earnings of $38,5000 compared with $31,000 for whites; Hispanics at $22,000 and African-Americans at $18,600.
One small but powerful fragment of the market is the Japanese expatriate, says Mr. Shigeta, who belongs to that group. Nova Promotion is focusing on its heritage as a Japanese agency and its strength in understanding the behavior and purchase patterns of the Japanese expatriate.
Specialty agencies are an imperative to successfully wooing such market segments, he insists.
He recalled the time he received a direct-mail piece written in Japanese from an overnight delivery service. The letter was written upside down, a huge mistake the marketer apparently didn't even realize.