Thursday, September 18, 1997

Learn to be hip to the Hispanic market

By Jan Norman / The Orange County Register

When Tustin, Calif., ad executive Reynaldo Macias was bidding for the Pacific Bell prepaid calling card account, he went to Fourth Street in Santa Ana, Calif., to do his market research.

"Our research showed that 40 percent of these prepaid calling cards are sold to Hispanics," said Macias, whose agency, Daniel Rey Advertising, specializes in the Hispanic market. "Some don't have telephones. Some have several families or unrelated people living in the same house. Some travel or are students."

That research helped the firm capture Pacific Bell's Hispanic point-of-sale advertising account, and this year also won the company a half-million-dollar contract to design the cards themselves with depictions of folkloric dancers and professional soccer players -- popular in Southern California's Hispanic communities.

Pacific Bell is just one of a growing number of companies increasingly aware that the Hispanic market is too lucrative to ignore. Yet savvy marketers are discovering they can't merely slap a few Spanish words on their ads and brochures and expect to capture the hearts and wallets of Hispanic consumers.

Hispanics are the fastest-growing ethnic group in the United States and Southern California, spending $240 billion nationally and $50 billion locally.

The business-to-business market also holds lucrative possibilities. A third of California businesses are owned by people of Hispanic heritage. Their sales leaped 150 percent in five years to top $1.6 billion in 1992 -- the year with the latest available data.

"You can't take the Hispanic community for granted," Macias said. "Would you ignore 30 million consumers of any group?"

Radio, television and telephone have kept Hispanics closer to their ancestral roots than past generations of immigrants, observed Macias' partner, Paul Robison. "I'm Irish, but I've never been to Ireland, don't speak Irish. But when marketing to Hispanics, you can't ignore their culture."

While working in Ecuador, Robison learned it was important first to develop relationships, hug, ask about the family before getting down to business.

Hispanic Market Connections Inc., a Los Altos, Calif.-based market research firm, agrees. "The ability to understand Hispanic cultural values and to forecast their influence on purchase decisions is vital to successful Hispanic marketing programs."

The Carl's Jr. restaurant chain doesn't use its ketchup-dripping, "If it doesn't get all over the place, it doesn't belong in your face" commercials on Spanish-language television.

"Those ads are aimed at young men, but the mother makes the decisions about where the family will eat, and those ads would offend her," Macias explained.

Carl's Jr. Spanish-language ads depict Hispanic folk dancers.

The cultural nod doesn't have to be huge, Macias said. McDonald's airs one commercial in which a Hispanic father and his daughter discuss her upcoming quinceanera party -- 15th birthday social debut -- over orders of french fries.

"The non-Hispanic sees that as an obviously tender moment, but it brings a tear to Hispanics' eyes because they know how important the quinceanera is," Macias said.

Teresa Saldivar, owner of Teresa's Jewelers in downtown Santa Ana, sees many marketing opportunities. She sells large quantities of baby jewelry for christenings and provides free ear piercing, often for Hispanic newborns.

Her Hispanic customers don't buy the platinum jewelry that Saldivar stocks to attract non-Hispanics.

"The Hispanic buyer wants 14-carat, yellow gold," she said.

Saldivar has sales and specials to attract business but doesn't use coupons. "Hispanics think coupons are embarrassing, not correct," she said.

When marketing to Hispanics, it is equally important to understand cultural differences among Hispanics from different countries, said Eduardo Figueroa, owner of Quality Trading House in Santa Ana and a counselor to Hispanic businesses at the Orange County Small Business Development Center.

"I was giving business seminars in Spanish," he said. "I was talking about tortas, which in Mexico, where I'm from, is bread with ham and cheese. People from El Salvador were there, and they didn't know what I was talking about because in El Salvador torta is a sweet cake."

That misunderstanding is mild compared with some advertising gaffes, according to Hispanic Market Connections. One airline, espousing its comfortable leather seats, advertised "sentado en cuero," which means to sit naked.

"You need to speak their language, not just translate the words," Macias said. "If the pictures don't reflect their culture, you're telling the Hispanic consumer that he's not worth the expense of making an original commercial."

Retailers and restaurants that want to attract Hispanic shoppers must be mindful of the importance of the family in shopping habits and spending decisions, said Figueroa of the Small Business Development Center.

"They go to the store as a whole family. They bring the kids, grandma."

Shops catering to Hispanics should provide wider aisles, activities for children and plenty of seating, suggested Patricia Kishel, who is teaching "Understanding Multicultural Markets" at Cypress College in Cypress, Calif., this fall.

"For them, it's 'we' not 'me,' " she said.

Furthermore, shopping and dining out are pleasant experiences to be lingered over and appreciated, she said. Restaurants need to accommodate that longer visit instead of trying to rush Hispanic diners in and out.

"Hispanic consumers are extremely loyal, but you have to win them over first," she stressed.

The closeness of Hispanic families is another marketing plus for business, jeweler Saldivar said.

"I make a point to ask customers in Spanish to do me a favor -- that is very important -- by recommending me to their families and friends. A lot of these people live together. And they will bring in a sister or a father. As a result, my business comes mostly by recommendation."

Perhaps it is the importance of family that makes quality so important to Hispanic consumers, Kishel said.

"Food, for example, is not just for sustenance, but it brings family and friends together," she said. "Everyone wants a bargain, but not at the expense of family enjoyment."

Hispanics spend 37 percent more on beef than the general U.S. population, she noted, and 20 percent more on fresh fruits and vegetables.

And Hispanics will go out of their way to find that quality, added Robert Gallegos of Grande Foods in Orange, Calif.

"Freshness is a very looked-for quality in the Mexican palate," he said. "They're very quality-conscious, and they will go out of their way to get it."

He learned that lesson when his father opened Grande as a neighborhood bakery in Santa Ana. Tortillas and Mexican pastries had to be made fresh every day or they wouldn't sell.

After the company moved to larger quarters in Orange for tortilla and chip manufacturing, it continued to make pastries from the Grand Avenue location.

The chips now sell in most major supermarket chains, but the pastries appeal more to Hispanic tastes, Gallegos said.

"We do a lot of hand work. We go through a couple more steps," he said. "That effort has given us very loyal customers."