Latino Market a Potential Gold Mine : Conference: A three-day trade show in Anaheim is geared toward companies who want to attract the growing number of Latino customers--and some of those attending are already devising strategies to tap market.
Hiro Shoda listened intently to several Latino marketing experts Wednesday morning to learn more about how to sell his company’s cosmetics to Latino consumers.
Shoda is the senior Japanese executive at the Irvine office of Tokyo-based Noevir Inc., which sold $800 million worth of makeup last year, but very little of it to Latinas.
Shoda was among 200 people who attended Wednesday’s opening of Se Habla Espanol , a three-day conference and trade show that attracts companies, advertisers and public relations specialists trying to tap an estimated $170 billion in disposable income of Latinos in the United States.
He said he came away with a strategy--Noevir will hire more Latino salespeople to market its skin care and cosmetic products, begin a Spanish-language advertising campaign and have company brochures translated into Spanish.
“I will definitely increase my marketing budget for the Hispanic market in the United States,” said Shoda, who hopes such moves will lift Noevir’s U.S. sales of about $40 million.
According to Jesus Chavarria, publisher of Hispanic Business magazine, which is sponsoring the trade show, 73 companies and about 1,500 people have paid to attend, the largest number in the show’s four-year history. Last year, 63 companies and fewer than 1,000 people attended the trade show in Chicago.
“What’s new this year is we have a new group of participants--three companies from Mexico,” Chavarria said. “The growing number of Hispanics in the United States and the U.S.-Mexico free trade agreement negotiations have created interest among Mexican companies to explore (the U.S.) market.”
Representatives of the Mexican companies said they felt that the free trade pact has many Mexican companies looking forward to the possible competition with U.S. companies, as well as to the potential of expanding their sales into the United States.
As a result, some ambitious companies, like Medici Advertising Inc. and magazine publisher Editorial Eres S.A. de C.V., have set up operations in the United States.
“We have a strong presence in Mexico, and with the free trade agreement, we want to be here to help American companies advertise in Mexico,” said Luis Valdivia, an account executive at Medici, which has an office in Chula Vista.
Ibraham Farca, production manager at Editorial Eres, said his company’s subscribers in the United States have increased so dramatically in the last two years that his company has established a publishing facility in Glasgow, Ky. Its Spanish-language magazines--Eres, geared toward Latino high school and college students; and Somos, which addresses social concerns and fashion trends for Latino professionals--have a combined U.S. circulation of about 35,000. Eres’ circulation in Mexico is 600,000 and Somos’ is 150,000.
Farca said he expects to see substantial circulation gains in the next year now that the printing plant is operational and the company has increased its sales force in the United States.
“Many young and professional Hispanics in the United States may speak English fluently, but we found that they’re more comfortable and prefer to read Spanish publications,” he said. “We realized that American publishers did not fill this void, and we decided to go after this market.”
Exhibitors at the trade show include companies like Voice Mail Plus of Tustin, which sells computer voice mail systems in Spanish, and SupraTel Inc., a Redwood City company that has just signed an agreement with Mexico’s telephone company to provide more telephone links between the United States and Mexico via satellite. Other exhibitors are American Airlines, Ford Motor Co., General Motors Corp., Goodyear Tire & Rubber Co. and the Walt Disney Co.
Latinos are the fastest-growing segment of the U.S. population, and California, with 8.9 million Latinos, has the greatest number of any state. If the growth rate continues, Latinos will replace blacks as the largest minority in the country by the year 2015, said M. Isabel Valdes, a conference speaker.
For this reason, she said, it is important for U.S. corporations to reach the Latino market through Spanish-language media instead of waiting for immigrants to become comfortable reading and speaking English. Research done by her company, Hispanic Market Connections, has found that second generation Latinos still maintain a strong Latino value system.
“We have Hispanics who have lived here for decades and more are coming daily,” said Valdes, president of the Los Altos-based marketing firm. “The new arrivals are reinforcing the Latino culture, language and consumer behavior. We found many Hispanics, even when they spoke English fluently, would prefer to listen or read ads in Spanish and disregard those in English.”
Tapping A Growing Market A growing number of companies are looking to gain a foothold in the $170-billion Latino market. Spending Soars Advertisers have increased their spending on the Hispanic market by 88% over the past six years. In millions of dollars: ‘85: $333.5 ‘86: $398.0 ‘87: $490.7 ‘88: $550.1 ‘89: $583.6 ‘90: $628.2 Where the Money Goes In 1990, advertisers spent $628 million on ads directed at Latino consumers. Here’s how dollars were distributed among different media. Local Radio: $156.0 Nation al TV: $142.8 National Radio: $55.1 Print: $58.9 Outdoor: $17.0 Promotion: $63.1 Transit: $4.2 Local TV: $131.1 Source: Hispanic Business Inc.
