x_dont use__Candy and Snack TODAY mobile — May/June 2011
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Marketing To Asian Americans

New Opportunities In The Asian American Market

Multicultural marketing expert Saul Gitlin shares the latest Census 2010 data on Asians in the U.S. to encourage marketing efforts address this important demographic.

BASED ON DATA from Census 2010, it can certainly be said that multicultural consumers have ‘come of age.’ Ten years ago, Census statistics for the nation’s largest multicultural populations initiated a significant shift in corporate America concerning the need for multicultural marketing. Prior to 2000, multicultural programs were considered good options, but in the past decade they have increasingly become business imperatives.

This transition has occurred for good reason. As of 2010, the nation’s three largest multicultural groups — Hispanics, African Americans and Asian Americans — now constitute one-third (34 percent) of the total U. S. population, and are projected to approach 40 percent by 2020.

As in the early years of the past decade, the coming surge of multicultural activity spurred by Census 2010 will be, most likely, initially focused on the Hispanic population.

However, marketers are also rapidly turning their sights on forging relationships with other critical multicultural consumer groups, including Asian Americans.

Candy, Snacks Present Opportunities

Contrary to popular perception, the consumption of sweets and snacks is ingrained across a broad cross section of Asian cultures. In many Asian traditions, the distribution and eating of a wide range of confections signals ‘sweet tidings’ or ‘sweet beginnings.’ This tradition is essential to many social situations including entertaining guests at home, and the celebration of important holidays and significant life events such as marriages and birthdays.

For example, Chinese culture dictates that a couple engaged to be married distributes candy to their friends, family and colleagues to announce their tidings. In fact, the question in Chinese, “When will you invite me to eat your happiness-sweets?” is often the spoken ‘proxy’ question that is used to inquire, “When are you planning to get married?”

Outside of Asian cultural circumstances, the enjoyment of sweets and snacks by Asian immigrant families often embraces more mainstream consumption patterns driven by the American acculturation of children and young adults within the households.

For both unique cultural applications, as well as for more mainstream usage, Asian consumers might purchase a variety of confectionery and snack products including chocolates, candies, cookies, biscuits, snack cakes, nuts and other savory snacks in a range of flavors, formulations and product types. However, there is no question Asian consumers also greatly value products that echo their own cultural experience from their countries of origin.

For example, Chinese, the largest Asian population in the U.S., enjoy certain flavors that are not ubiquitous in existing U.S. product portfolios, including sesame, mango, papaya, banana, tea and nougat. For confections, Chinese consume both hard and soft candies, and both filled and solid chocolates. Some snacks that particularly resonate within their culture include dried fruit, preserved fruits (often sour), flavored and non-flavored seeds, nuts and nut-based snacks such as hard flour coated nuts, spicy nuts, savory rice crackers, and sweet, flavored wafers.

Asian Indians, the second largest Asian population in the country, are also culturally pre-disposed toward the consumption of sweets and snacks. Existing mainstream products in the U. S. can be relevantly marketed to Asian Indian families, and products that reflect Indian cultural and taste preferences would be that much more valued.

Flavors consistent with Asian Indian taste preference include vanilla, chocolate, ‘milkflavor,’ nut flavors, mint and some spicier items. Relevant product types include both hard and soft candies with bright colors, biscuits and wafers in traditional vanilla, chocolate and coffee, as well as exotic fruit flavors. Asian Indians also enjoy chocolate, particularly with nuts and, even more specifically, almonds. Within the Asian Indian culture, popular snacks include peanuts and almonds, spicy snacks, and both wheat and rice flour crisps.

For visionary candy and snack marketers that want to take advantage of these attractive and, so far, competitively ‘uncluttered’ segments, the opportunity is twofold. First is to offer an existing product portfolio to these segments utilizing culturally and linguistically relevant marketing programs disseminated through ethnic media and online channels that directly reach these communities.

There is also a viable option to modify existing product lines and packaging to address Asian market preference and usage circumstances. This might take the form of unique, festively colored products for key Asian holidays. For example, products can be packaged in holiday-themed red packaging for the Asian Lunar New Year, which is celebrated by Chinese, Vietnamese and Koreans. Such packaging might include animal zodiac designs that denote the relevant year in the lunar cycle.

Also, a marketer might offer Indians special bright, multicolor products or packagings in recognition of Diwali, the Indian Festival of Lights — a national holiday celebrated across the regional and religious spectrum within the Asian Indian population, during which the gifting of ‘sweets’ is an established practice.

Beyond recognition of specific holidays, marketers might also design and offer special packaging consistent with the ongoing gifting that takes place in Asian communities throughout the year for weddings, birthdays, anniversaries, graduations and other key lifestage events.

On the retail side, the good news is that not only do Asians shop in many mainstream stores across the U.S. including supermarkets, drug, convenience and big box stores, but there is also a fast-growing landscape of Asian-focused retail food chains that consolidate Asian products and U.S. packaged goods under one roof.

These chains offer marketers natural partnerships that enable them to better observe and benchmark category dynamics within specific Asian communities, develop focused retail marketing programs, and ultimately, track performance by monitoring the volume and pace of product sales in specific locations.

There are many of these Asian retail chains on the scene today, most of which tend to focus on individual ethnic communities, even if many still appeal to consumers from multiple Asian groups, and increasingly to non-Asians as well. These include 99 Ranch Market, a chain of more than 20 large Chinese supermarkets in Northern and Southern California, Arizona, Georgia, Nevada and Washington, the H Mart chain serving the Korean community, and Patel Brothers for the Indian community.

The decision to market to the burgeoning Asian American population is no longer a question of if, but rather when. The demographic ‘writing is on the wall,’ and Asian marketing programs will be viewed as essential.

Confectionery and snack brands that have the vision to take action now can still enjoy what might be the true final frontier of first-mover advantage, thereby establishing a solid position in the market, which will inevitably be addressed by all competitors.

Understanding Asians In The U.S.

With a total population of 17.3 million recorded by Census 2010, Asian Americans represent 5.6 percent of the total U.S. However, while such top-line numbers might not appear compelling enough for some marketers, Asians are much more significant than they appear at first glance because of their unusually strong concentration in key regions of the country.

For example, 50 percent of all Asians live in just three states: California, New York and Texas. In California, Asians represent 13 percent of the total state population. They also form critical double-digit percentages of the local populations in key metropolitan areas such as New York, Los Angeles and San Francisco, among others.

With 43.7 percent population growth between 2000 and 2010, Asians also experienced the fastest growth rate of all racial groups.

In top states, Asian population growth remained robust, up 32 percent in California, 36 percent in New York, 74 percent in Texas and 51 percent in New Jersey. But outside these markets, rates spiked even more dramatically: 119 percent growth in Nevada, 94 percent in Arizona, and 88 percent in North Carolina, to cite a few.

These figures demonstrate a key point marketers need to understand: while Asians number less than many other population segments, their economic power and potential bottom-line impact in many product categories and brands is disproportionately large.

They also enjoy the highest median household income of all groups, almost $10,000 ahead of white households, and far in excess of Hispanic and African American median income. One reason is that Asians have the highest level of educational attainment of all groups in the country, with 44 percent holding a bachelor’s degree or higher.

Asian income is also influenced by the disproportionately high rates of entrepreneurial activity. According to the U. S. Economic Census survey of minority businesses, Asians owned and operated 1.6 million businesses nationwide, generating $514 billion in annual sales. By contrast, Hispanics owned 2.3 million businesses across the country, which, in aggregate, generated $345 billion in annual sales revenue — 33 percent less than Asian-owned businesses.

According to the Selig Center for Economic Growth at the University of Georgia, Asian American purchasing power in 2009 reached $509 billion, representing an 89 percent increase since 2000, and nearly twice the purchasing power growth rate for the total U.S. population during the same period. Although the Asian American population is only one-third the size of the Hispanic population, Asians command more than half the purchasing power of Hispanics.

The unusual economic clout of Asians is further underscored by the fact that they have the highest percentage of affluent households in the country: 12 percent of Asian households have annual incomes in excess of $125,000 per year, compared with only eight percent of white households, and three percent each of Hispanic and African American households. Asian affluence also accounts for a wide range of other intriguing, and under-recognized, demographic characteristics. For example, in 48 out of the 50 states, Asians lead all other groups, again, including whites, for median home value.

What can seem like a daunting challenge for those trying to understand this segment is that government statistics identify the term Asian American as including people from more than 15 distinct ethnic groups and national origins. However, the population is actually not as complicated as it appears on the surface.

Overall, just six groups account for almost 90 percent of Asian Americans. In rank order by national population sizes these are Chinese, Asian Indian, Filipino, Vietnamese, Korean and Japanese. And because the dominant portions of these segments are highly concentrated in tight ethnic communities within just a few major metropolitan areas it is possible to develop extremely targeted and efficient marketing and communications programs to reach these groups.

TargetedMarketingWorth The Effort

As a predominantly foreign-born population, Asian Americans exhibit a correspondingly high preference to communicate and consume media in their native languages. According to the last published Census reports detailing Asian language usage, 94 percent of both Vietnamese and Korean Americans, and 81 percent of Chinese Americans exhibit such a preference.

In the other three main sub-segments, this ‘in-language preference’ skews a bit lower, although it is still strong, with Indians and Filipinos at 70 and 65 percent, respectively. This is somewhat surprising given the high degree of English bilingualism found among Indians and Filipinos, but it is, nevertheless, a reflection of the importance that country-of-origin language and culture holds in these populations. The Japanese-American population harbors the lowest preference (53 percent), as large numbers in this segment were born in the U.S.

Still, languages are playing an increasingly prominent role within the life of the country. In fact, for the first time in history, Chinese is now the second most prevalent foreign language spoken in U.S. households after Spanish. In California, five of the top 10 languages spoken are Asian, and Chinese is now the third most common language spoken in New York City.

These facts are supported by the rich environment of Asian language media available in the U.S. There are more than 1,000 print and broadcast outlets that serve the news, information, and entertainment needs of Asian Americans. Marketers can leverage integrated platforms offering direct reach to Asian consumers via print, TV, radio and targeted out-of-home placement. Asians also have the highest homecomputer penetration of all groups, and are the most mature Internet users, gauged by their propensity to research and purchase products online and their heavy social media engagement.

As is the case in other market segments, there are other communications channels proven to be highly effective in reaching Asian Americans. One example is direct mail. The growing availability of qualified Asian consumer lists that can be sorted by ethnicity, language preference, and a host of demographic selects has enabled many companies to greatly enhance the performance of direct response programs.

Marketers can extend communication by partnering with the growing number of Asian language and lifestyle sites, and social media portals, which cater to the top Asian groups in North America. By utilizing Asian media, marketers can enjoy substantial efficiencies since costs remain far below those of the general market.

‘There is no question Asian consumers greatly value products that echo their own cultural experience from their countries of origin.’

SAUL GITLIN Kang & Lee Advertising

‘While Asians number less than many other population segments, their economic power and potential bottomline impact in many product categories and brands is disproportionately large.’

SAUL GITLIN Kang & Lee Advertising