Benefits of Ethnic Marketing: Growth, Untapped Market Segments, and Amplification: Increased Profitability

The face of Canada has changed dramatically in the last 20 years. So has ethnic marketing. Statistics Canada reports that more than 200 ethnicities are now represented in this country. Immigration accounts for more than 50% of our population growth and is likely to double by 2025. Entrepreneurs should pitch product and service to ethnic markets, or their competitors will. In general, ethnic markets can represent growth, untapped market segments, and increased profitability.

It has been difficult for companies to find successful ways to target the various ethnic groups found in Canada. The United Way of Greater Toronto’s citywide fundraising initiatives in 2000 proved depressing for the various multicultural groups within the city. Six years ago, fundraising efforts raised between $20,000 and $25,000 from seven or eight communities. Instead, three prominent groups were targeted and last year they raised about $700,000, a 300% increase over a six-year period.

Today, companies hire managers from ethnic markets and the message is to communicate to the changing Canadian market the most effective ways to incorporate a more diverse approach to marketing their brand.

Today’s consumers are much more sophisticated, better educated and have greater purchasing power than the immigrants of years past. Marketers understand the ethnicity of their customers, embrace their customs, and tap into their sensitivities.

Ethnicity is a multidimensional expression of identity that includes race, origin or ancestry, language, or religion. Influenced by variables: immigration, miscegenation and intermarriage, which very often create a force of ethnic identification. Customs and beliefs, and sometimes clothing and eating habits, are often associated with a culture. A 2002 survey by Statistics Canada regarding ethnic diversity reveals that three quarters of Canadians say they are interested in learning more about their ancestry and are familiar with their heritage.

Solutions Research Group conducted a study that examined six major population groups in Toronto, Vancouver, and Montreal. The study included Canadians of Chinese, South Asian, West Asian, Hispanic, Black and Italian descent. A total of 3,000 respondents (aged 15+) were interviewed in 9 languages: English, French, Cantonese, Mandarin, Punjabi, Hindi, Urdu, Spanish, and Italian. The results were staggering: among the most vital means of communication is the Internet with 88% usage. Chinese Canadians are active users spending 2.4 hours a day, followed by television and then radio. Although they spend less time watching television, ethnic Canadians are more likely than the benchmark market to have digital cable or satellite television (41% vs. 39%). Black and Chinese Canadians lead on this measure (47% and 44%, respectively).

More than half (52%) of the ethnic groups surveyed agree with the statement: “I rarely see advertising messages directed at me”, suggesting a significant missed opportunity. The trick is to go beyond the status quo, dig deep, and solutions will be found.

Pay attention to the three Cs: caution, care and commitment.

Bail

An ethnic market is actually made up of dozens of different smaller segments. What sells in the Southeast Asian community may not sell to the Chinese community. If you are referring to China, are you targeting Hong Kong or Taiwan? Marketers must learn to identify communities and target them directly. Ethnic identity has little to do with how people buy gasoline and repair cars. However, it has a lot to do with what groceries or books they buy.

Watch out

Decisions must be made to seek out different ethnic communities, and at the same time care must be taken to learn about them. The size of the market and how you, the marketer, are going to capture it is considered. Direct marketing techniques are the best way to personalize your message. Companies may already have the information necessary to determine the approach.

Example: Financial institutions know where their customers send money. Companies that capture this type of data (through data mining) can use it to tailor their products and services to the consumer.

Acquire subscriber lists of ethnic newspapers or membership lists of ethnic associations. Determining your target audience becomes easy, the next task… craft marketing materials in the language they understand.

Commitment

A recent survey of 150 marketers found that only 40% consistently performed back-end analysis of their direct marketing programs. The costs associated with discovering this type of information are high. What will your ROI be? More and more companies are jumping on the ethnic bandwagon. Just walk into any Wal-Mart Super Center and see how their food products are representative of diverse ethnicities and how their ways of “giving back” really do improve the communities they serve. Last year, the Salvation Army received a $100,000 donation from them. After all, their motto “Wal-Mart Canada is committed to making a difference in the lives of Canadians” once again rings true.

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