Chain restaurant marketers chase Hispanic consumers for growth
Commercials that feature Spanish-language slogans, like 'America se mueve con Dunkin,' may soon be commonplace
Hispanics are poised to grow and grow big in this country, with the segment's purchasing power estimated to be $1.3 trillion annually by next year, on robust growth projections.¹ If you ask consumer research firm Packaged Facts, its analysts will tell you that the Hispanic purchasing power will grow nearly 25 percent through 2015. The market is becoming more and more attractive: researchers at NM Incite report that the average U.S. Hispanic households now earn over $50,000.²
So what is the fuss about targeted marketing to Hispanics by restaurant chains and why is it being ramped up now? Consumer packaged goods marketing has thrived on ethnic-target marketing for decades, but restaurants seem to have lagged behind.
"Restaurants are ramping up their efforts to leverage the huge marketing opportunity to a Hispanic population that spends billions of dollars annually on food purchases," wrote Darren Tristano, executive vice president for food industry research authority Technomic, Inc., in a recent industry newsletter. "Family is an important part of Hispanic lives; campaigns that are focused on this population should acknowledge the importance of families and integrate it into advertising."
In an effort to ramp up efforts to market to Hispanics, chains like Denny's, Burger King, Domino's Pizza, Wendy's and Burger King are deploying Spanish-themed and Spanish-language marketing campaigns in greater numbers, noted Tristano.
One size won't fit all
According to the U.S. Census, Hispanics will account for 30 percent of consumers by the year 2050, and the population size jumped four-percentage points to 16.5 percent in 2010 from the year 2000. Packaged Facts says that Hispanic consumer confidence is highly correlated to purchasing behavior, a definite factor that isn't seen as closely aligned to purchasing in the non-Hispanic population. It also says that 63 percent of Hispanic consumers were born in the United States and have English as a primary language, and Hispanic consumer spend in restaurants accounts for about 13 percent of sales currently.
Talking about large restaurant chains in email correspondence with Quick Serve Leader,Mary Chapman, Director of Product Innovation for Technomic, says "They’re targeting their message differently to different groups... So add that to the fact that they are recognizing that Hispanic consumers are a large and growing segment of the population, and it’s a good idea to tailor messaging to that market."
With 88 percent of Hispanic households reporting Spanish still being spoken at home and 52-percent of them speaking dual English-Spanish, the customization of messages to a culture that is family-centric is going to be key for restaurant brands, noted consumer research group NPD last fall. Packaged Facts’ findings also suggest that marketing efforts need to be tailored wisely and that the consumer group is critical to the long-term health of restaurant industry growth.
Understanding age data and preferences is important to restaurant marketers: nearly 46 percent of Hispanics are less than 25 years of age and the under-25 category is 25 percent more likely than the general population of Hispanics to spend on restaurant visits at least 14 times per month.
Walking a fine line in delivering the right message to the Hispanic consumer is what marketers will have to do. "Translating an English commercial or ad might not be enough, but you also don’t want to go overboard with slang and cultural stereotypes if your brand isn’t known as a Hispanic concept; you will come off as out of touch or even offensive," says Chapman.
Keeping messages relevant and "Que estas tomando?"
Wendy's tapping of Bravo Group, a creative agency focused on the Hispanic consumer market, will help unveil new messages of engagement in the coming months. The August release underscores the importance of having culturally-relevant messages to deliver to this important market segment. Wendy's pick of the Bravo Group is strategic in nature. The Hispanic-centric creative agency has worked with food companies, such as Kraft Foods, Danone and Winn-Dixie's supermarkets.
Dunkin' Donuts launched the "Que estas tomando?" campaign, a Spanish-speaking marketing campaign encompassing TV, radio, online, social media, public relations and in-store marketing, supported by point-of-purchase material. The "American se mueve con Dunkin" (American runs on Dunkin') slogan will be more widespread than ever.
"Our research showed that more than a quarter of acculturated Hispanic consumers primarily speak Spanish with their family, but one in six speaks primarily Spanish with their friends," says Chapman. "Since they tend to live in both a Spanish-speaking environment and an English-speaking environment, they may find it appealing to see a brand that recognizes that."
For social media marketing, in a paper released last April,³ NM Incite echoes Chapman's message about marketing to Hispanics in general:
- Understand your Hispanic audience
- Choose your language wisely;
- Keep content culturally relevant; and
- Pay attention to key influencers in the industry.
When Burger King launched its new spring menu, adding smaller-portion snacks, new salads, and fruit smoothies, it picked Mexican-born actress Salma Hayek to deliver its message, as well as Sofia Vergara, in addition to a mix of celebrities that targeted more mainstream audiences, like David Beckham and Steven Tyler.
Picking the right voice, and the right message, for Hispanics, without alienating mainstream first- and second-generation Hispanic consumers, will be an unenviable task by the restaurant marketer. The stakes remain high and the strategic investments in amplifying these ethnic-centric messages could pay off big.
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¹ Selig Center for Economic Growth, reported by NM Incite
²⁻³ NM Incite: "Hispanics in Social Media and the Emerging Opportunities for Brands in 2011" by Chris Corales and Elizabeth Martinez, April 2011.
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