Knowing Latino Market Pays Off for Agency : Advertising: The company landed a large supermarket account with a campaign depicting the customers’ culture.
Susana Rendon McHugh learned that in today’s multicultural world, it pays to know the Latino psyche.
When her 12-person agency, AD Rendon, was offered a shot at the Viva Supermarkets account in May--a few weeks after it moved its offices to Newport Beach from Century City--she was excited.
Viva, a Southern California chain of 30 stores that targets the Latino market, is affiliated with six major supermarket chains, including Alpha Beta. Viva’s parent, Food 4 Less Supermarkets Inc. in La Habra, spent more than $10 million in the past year converting some markets to Viva stores and sprucing up a third of the existing Viva stores as a prelude to a major expansion in California.
The initial advertising outlay of $2.5 million promises to blossom into a multimillion-dollar campaign. In 1992 alone, Food 4 Less plans to add 10 more Viva stores in Southern California.
Hispanic Business magazine estimates that the disposable income of the 22.3 million Latinos in the United States reached $146 billion last year and should grow 8% in 1991. Recognizing this growing purchasing power, U.S. companies are pouring money into Spanish-language advertisements. Last year, those companies spent $628 million on such ads, 28% more than in 1987, the magazine estimates.
While AD Rendon has not worked on a supermarket account before, it has had several major clients since shifting from public relations to advertising in 1988. It has produced several Spanish-language TV spots for Carl’s Jr. restaurants and others for McCormick & Co. Inc., the spice company.
The firm is perhaps best known for its billboard ads in Spanish for Caltrans’ ride-share program, and newspaper ads touting the cheeses, coffee and other food lines of Kraft General Foods Inc.
To secure the Viva account, 31-year-old McHugh said she and some of her mostly Latino staff spent a week talking to Viva customers. Based on this informal survey, they produced a 30-second pilot commercial that highlighted what customers liked best about the stores.
That commercial included colorful images of parents with children in tow, picking ripe papayas, golden bananas, juicy mangoes and dried magenta chili peppers. The spot also showed customers cashing checks and sending money to relatives in Mexico. In the background, AD Rendon used a mixture of salsa and mariachi music, giving it a festive mood.
These elements are important, because Latinos like to see images of their culture, habits and values, McHugh said.
The strategy worked. Last month, AD Rendon beat out its larger competitors, including Ogilvy & Mather Inc. in Los Angeles and Mendoza, Dillon & Asociados Inc. in Newport Beach. The latter is the nation’s largest ad agency geared toward the Latino market, with more than $60 million in annual billings.
The slogan that impressed executives at Food 4 Less read: “Viva, VIVA... Para que viva mejor !” --Spanish for “Hooray for Viva...for a better life!”
“Their pitch captured a lot of what we wanted to be,” said Tony Schnug, senior vice president of administration at Food 4 Less headquarters. “It recognizes the elements of what Viva provides and the things we try to communicate to our customers.”
Equally important is that Schnug felt comfortable working with McHugh and her team. He liked that McHugh is a hands-on executive who is personally involved in every aspect of a campaign.
“Since this is the first major campaign for Viva, it is essential to us that we have direct access to the principals of our advertising company,” Schnug said.
In 1988, AD Rendon’s first-year gross billings were $471,000. Billings reached $5.6 million last year, and McHugh estimates her agency’s 1991 gross billings will reach $7 million. Gross billings are the total budget clients provide ad agencies. The agencies are paid a commission, which ranges between 10% and 17% of the gross billings.
McHugh’s success was recognized last month when she was selected the 1991 Hispanic business woman of the year by the U.S. Hispanic Chamber of Commerce in Washington.
As early as 1981, McHugh said she saw the growth potential of the Latino consumer base while traveling as a press agent for the Broadway musical “A Chorus Line.”
The market is not identical, she discovered. For example, Miami’s mostly Cuban immigrants tend to eat less spicy food with black beans and rice, while Mexican immigrants in Santa Ana prefer spicy food, corn tortillas, brown beans and rice cooked with tomato sauce.
However, she also found some consumption patterns that link the various ethnic groups: Latinos have a strong sense of brand loyalty and they prefer sweet food items, like sweet bread, tropical fruit juices and sodas.
