More Not Always Means Better

By Richard Ross

Editor’s note: With growth of Hispanic consumer interest comes increased competition for current marketers. Before, an untapped opportunity, any advertisement geared toward Hispanics seemed effective. Now, however, as big players enter the game with big bucks, can small budgeted businesses survive? If so, how?

We all know that the results of Census 2000 led to huge growth in the focus on Hispanic marketing which in turn created several positive outcomes in the marketplace: a desire by manufacturers and service providers to learn about Hispanic opportunities, increased competition, growth of Hispanic agencies, increased number of Hispanic media and promotional vehicles, and often increased Hispanic marketing budgets.  However, this frenetic growth had a negative effect on some manufacturers and service providers as the demand for Hispanic marketing assets outstripped supply (i.e., festival locations or expertise in Hispanic marketing, media and promotions), and the cost to access the Hispanic community increased.

Shortly before and during the time the Census results were being disseminated, the “marketing” economy was down overall.  No real growth engines seemed to exist.  The Internet bubble had burst.  The Boomer, Gen-X and Gen-Y trends had already been identified and tactics to reach them were already being executed.  And the Atkins/Low-Carb news was still nascent, with industry debates as to its longevity – long-term trend or short-term fad?

However, the Hispanic population was growing, and this was not a fad, but rather a true trend.  Hispanic communities flourished in “obvious” places like California, Texas, and New York.  And much to the surprise of those not already living the trend, the same thing was happening in states like North Carolina, Washington and Iowa.

Correspondingly, Hispanic culture became more interwoven into American culture. Hispanics gained covers on magazines like People, Glamour, Esquire and GQ, topped the pop charts in music, starred in roles in Hollywood; and the general population began looking to Hispanics as trend setters in fashion, music, food and beyond.

So with a real trend identified and brought to the forefront through publication of the 2000 Census, it was greener pastures for all marketers and everything was looking great for everyone…right?  Wrong!  “So,” you ask, “who could not possibly rejoice in this huge information windfall?”  The answer may not so obvious: some small, very smart companies on tight budgets may not have been so happy about the information surfacing.  Specifically, small companies that were ahead of the mainstream knowledge curve and surge of information that came out of the 2000 Census that hit most laggard, large companies as an epiphany and illuminated the proverbial “light bulb”.  Those that realized the growth trend was happening before the world got turned on to the 2000 Census. Those that were in the trenches years earlier, knowing that because the U.S. Census wasn’t yet reporting it and the iconography hadn’t yet been absorbed into our pop culture, there was already a huge, grossly underserved population craving unique products and services.  For these small companies whom for years had had the Hispanic consumer all to themselves, the jig was up.

Many of these companies began marketing to Hispanics in the 80’s and 90’s on shoestring budgets and often were the sole entrants in their categories at the time.  Because competition for these companies was virtually non-existent, they could make do with little investment and still rack up huge share to dominate their categories.  But the 2000 Census changed all that.  For companies that thrived in the early days, the newly illuminated “light bulb” brought with it an onslaught of competition, often from large, marketing savvy entrants. With what seemed like endless pockets laden with late-to-the-party “catch-up” funds ready to buy share at any cost, the strategy was to get share from consumers loyal to the early entrants.

All of this history begs us to question, what the future holds.  Will these pioneers be able to maintain share with small spending, counting on 5, 10, 15 even 20 years of existing brand loyalty or will the big boys be able to erode years of intuition, grass-roots, community-based brand building, sweat equity, and trust?  How can the little guy survive?

Here are some recommendations for the small guys with the small budgets:

Stick to What’s Worked

Don’t fight fire with fire. If you have a small budget and the big boys come in to buy share you will never be able to go dollar for dollar against them.  The Modus Operandi of the big boys usually centers on efficiency, therefore, expect a lot of traditional media, FSIs, etc. If you try to emulate them you will lose.  Rather, stick to what has worked in the past: most likely, guerrilla marketing, sampling, festivals, work with community based organizations, etc.  If you think you can just outspend them you’re wrong.

Don’t Second Guess Yourself

In regards to new products and services, continue to monitor you (your) environment and all new product and service entrants.  However, just because a large competitor introduces a new product and service, if you are fairly certain they are wrong, don’t second-guess yourself, they probably are wrong.  Stick to your guns and work your plan.  I’ve seen lots of very large companies introduce products for the Hispanic consumer just because their management was pushing them to introduce something to address the opportunity and after spending millions of dollars it fails.  They may have gotten trial, but never got the repeat, because the product either already existed from an existing smaller company who has brand loyalty or there wasn’t really a need for the product in the first place, or the flavor, taste, color, smell, communication or something else was inappropriate.

Leverage Relations

Leverage any relationship you have, especially with retailers and independent retailers.  Again, due to efficiencies the big boys tend to focus on the major chains. Not that they aren’t important -- they are -- but just realize this is where the big guys will focus their attention.  Head for “blue waters”, where they don’t have a foothold.  Redouble your effort in the carnicerias, panaderias, bodegas, Hispanic independents and Hispanic-up-and-down-the-street outlets.  I’ve had so many peers tell me “one little independent sells more of my product in LA than the entire chain X.”

Use Facts and Be the Hispanic Authority You Are

Where possible, when talking to the trade or other partners, you must show them that you are the category leader and that you are a destination item for the key, growing Hispanic consumer.  For retailers, convince them that they will lose this customer if you aren’t on the shelf.  Further, you know the Hispanic consumer as well as or better than anyone else, share your vast wealth of proprietary knowledge with true partners that want to help you grow as you help them grow.

Leverage Your Total Hispanic System

If you sell in the Caribbean, Central or South America your communication should leverage that fact.  It is a huge benefit that is often overlooked in U.S. marketing and sales communications and if the competitors can’t leverage this fact you should, this is a major point of difference and a strategic advantage.  If the Hispanic population has experience with your product from their home country, leverage it.

Create Partnerships

If you truly are a leader with access to the Hispanic community, then there are probably dozens of companies that would like to partner with you.  Find them, but only partner with someone that strategically gets you something worthwhile.  We understand what they are getting…access to the #1 desired consumer via a true Hispanic brand.  But what are you getting? (Hint:  it shouldn’t just be short-term volume).

Stay Flexible and Nimble

Your ability to create Hispanic specific, unique programs for small retailers or programs for just the core Hispanic stores of the large chains and you ability to do it quickly without a lot of bureaucracy is a competitive advantage.  Your size and ability to make decisions quickly must remain an advantage.  You must able to capitalize on opportunities and new information at a moment’s notice.

Have Fun

Finally, be excited, upbeat and have fun.  The Hispanic consumer target is constantly growing and evolving. It is our responsibility to listen and bring the consumers what they need.  If we do that, rather than fighting over limited share in a down market, we will be growing the pie and creating value so everyone -- the small guys on the tight budget and the big guys – can win.

Since the release of the 2000 Census, the number of competitors and cost to compete in the Hispanic marketplace has increased dramatically across almost every consumer category.  In turn, the pressure has increased for some smaller traditionally category-leading companies.  Other than being a shoe-in that the US Hispanic growth trend will continue, no one can predict what the results will be over time.  However, what we do know is that opportunity abounds and it’s an exciting time to be involved and to see it unfold.

Richard Ross is Director of Marketing for Tampico Beverages, Inc. maker of Tampico® Fruit Punches (the #1 selling refrigerated juice drink and highest Hispanic indexing non-carbonated beverage in US groceries), new Tampico Plus™ and new Tampico® Ice Cream, the first national brand of Hispanic-targeted ice creams (www.tampico.com).   He is an Affiliate Faculty Member at the Center for the Study of Hispanic Marketing Communication, Florida State University and speaks regularly at Hispanic Marketing conferences throughout the US.