Advertisers Court Growing Asian American Population
East West Bank describes the fast-food promotion that starts today at its Southern California locations as “East meeting West.” The concept is simple: Hand out discount coupons that the bank’s largely Asian American clientele can redeem at 300 Burger King Corp. restaurants.
“We know [Asian Americans] are eating hamburgers,” said Herman Li, a Canoga Park Burger King franchisee who dreamed up the promotion. “We want them to eat more.”
The coupon giveaway, which starts on the eve of the Asian lunar new year, is representative of a growing push by marketers to target Asian Americans.
When the Year of the Dragon dawns Saturday, companies as diverse as Sears, Roebuck & Co., Washington Mutual Inc. and mall operator Simon Property Group Inc. will be linking ads and in-store promotions to one of the Asian world’s most important holidays.
J.C. Penney Co. stores are distributing beautifully illustrated dragon posters, California Bank & Trust and Sears will offer colorful lunar calendars, and Western Union and State Farm Insurance are handing out red envelopes that many Chinese Americans use to give cash gifts to children.
The promotions are increasingly likely to be supported by advertising in ethnic media outlets. “When I started this agency 10 years ago, there were probably 150 Asian-language media outlets in the U.S.,” said Bill Imada, president and chief executive of Los Angeles-based Imada Wong Communications Group. “Now there are well over 600. And it’s not just print, it’s radio and television too.”
“Many marketers missed this, but between 1980 and 1990, the Asian American population in California grew 10 times faster than the general population,” said David Bland, manager of ethnic marketing for Seattle-based Washington Mutual.
Corporate interest in reaching Asian Americans is expected to mushroom after 2000 census data are released. “People are going to be stunned with the data, and anyone who’s been sleeping will be scrambling to catch up,” said Michael Halberstam, whose Van Nuys-based Interviewing Service of America conducts ethnic market research.
Businesses in neighborhoods with a strong Asian American population can’t assume that they will automatically make inroads. Westminster Mall in Orange County began courting Asian Americans five years ago, and this weekend it will host a two-day festival featuring a top Asian American dance group from the San Gabriel Valley.
“Six years ago, our consumer base was 4% to 5% Asian,” said Steve Schwartz, Westminster Mall’s marketing director. “Now, it’s 25%. Six years ago, we had the teens. Now we’ve still got those teens, but we also have their younger brothers and sisters--and we’re also getting their parents and grandparents.”
Researchers estimate that the nation’s Asian American population is now at 10.4 million, or 4% of the population. It will surge to 11% by 2020, according to estimates. Latinos, by comparison, accounted for 11% of the population in 1999, and African Americans, 12%.
Marketers see dollar signs when they look at Asian Americans. The Selig Center for Economic Growth at the University of Georgia estimates that Asian American buying power mushroomed to $229 billion in 1999 from $113 billion in 1990. The much larger African American population last year displayed $533 billion in buying power, and Latinos, $383 billion.
Marketers know that advertising alone won’t guarantee success. East West Bank’s promotion, for example, features a coupon redeemable at Burger King for a new frozen drink from Coca-Cola Co. that has tested well with Asian Americans.
Instead of simply handing out the Dragon posters, JCPenney will make them available in departments that sell baby apparel. The rationale? “This is the Year of the Golden Dragon and many Asian Americans try to plan the birth of their children during this year,” said Bonita Stanley, media production manager for JCPenney’s multicultural marketing program.
“The posters make a baby sale relevant to these customers,” said Julia Huang, chief executive of InterTrend Communication, a Torrance-based ad agency that helped JCPenney create the poster program. “It gives customers something they can identify with.”
Washington Mutual’s service center employees are trained to recognize cultural differences. “Some customers prefer to select their own account numbers, to make sure there are eights in them, which are considered to be good luck,” Bland said. “To succeed, you have to be aware of cultural sensitivities. You can’t just rush in and say, ‘Hey, let’s do business.’ ”
Unlike Latino consumers, Asian Americans do not share a common language, and campaigns aimed at them must cater to a more diverse population. The lunar new year celebration, for example, is known as chuen jie in Chinese, tet nguyen dan in Vietnamese and sol in Korean, according to Kang & Lee, a New York advertising agency.
“The language barrier is really the obstacle for many advertisers,” Huang said. “When you approach an Asian American campaign, there are different segments, different languages to consider.”
Advertising industry statistics don’t break out how much companies spend to court Asian Americans, but the best estimates range between $200 million and $300 million, Imada said. That sounds impressive, but the nation’s 100 largest brands spent more than $21 billion last year, according to Advertising Age magazine.
Spending also “moves in ebbs and flows,” according to Imada. Telecommunications companies that spent heavily in the mid-1990s have throttled down, but retailers, including Sears, are spending more.
Huang expects spending to increase across the board after advertisers have a chance to study 2000 census data.
Marketers say the Asian American campaigns will continue as long as advertisers know they are connecting. Burger King will track how many of the 150,000 coupons it will mail to consumers are redeemed. Banks and insurance companies that advertise on TV and radio use special phone numbers to track consumer reaction, Amada said.
Consumers seem to welcome the attention. Anita Louie, 50, an East West Bank customer with two children in college, liked the Burger King promotion. “They like anything fast food, anything they don’t have to cook,” Louie said.
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Growing Clout
The Asian American population is the nation’s fastest-growing ethnic group--and also boasts high average household income and discretionary spending power.
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Sources: Interviewing Service of America
Inc., U.S. Census Bureau
