Report on marketing to America's diverse cultures

4 Sep 2015

The CMO Council launched a new study on 1 September 2015 that is focused around the issues and complexities of marketing to America's culturally diverse business environment, highlighting where and how organisations can maximise strategies and right-size allocations to best engage increasing minority customer segments.

The research features findings from an online survey of senior marketing leaders across both B2B and B2C organisations spanning a broad range of industry sectors. The new study, 'Activating The New American Mainstream', found that almost 50% of marketers still do not have a multicultural marketing initiative in place and the top reason was that it simply wasn't a priority for their organisations- a rather alarming reality given the growth and importance of these consumer segments.

Multicultural engagement strategies

Multicultural marketing strategies will become increasingly important to brands looking to engage in a more culturally relevant and personalised manner. However, despite rapid population growth and strong support for initiatives within marketing circles, CEO and board support falls far short, failing to assist marketer's ability to prioritise and fully fund their efforts.

Report on marketing to America's diverse cultures

According to Geoscape, the leader in business intelligence across the multicultural market, groups including Asian-Americans, African-Americans and Hispanics will grow to nearly 130 million by the year 2020. Furthermore, the non-Hispanic white population will become the minority, dropping below 50% of the population by 2042.

A new poll from the Chief Marketing Officer (CMO) Council and Geoscape-entitled "Activating the New American Mainstream"-reveals that half of the 150 North America-based senior marketing executives surveyed feel there is some level of support for multicultural engagement strategies from the senior levels of the organisation. While 67% admit that the CMO has a high level of buy-in and support for multicultural efforts, 55% admit that the CEO does not share that opinion, failing to support initiatives fully.

This lack of top-level support translates into a de-prioritisation of multicultural engagement programs as more than half (51%) of marketers admit that there are simply too many competing priorities. In fact, when asked to rate commitment levels, only 20% of marketers felt that multicultural strategies were mandatory and unanimously embraced across the organisation, and just over one in four believed that the multicultural market was mission critical for the organisation.

Specific to investments into multicultural programs, marketers indicate that:

• 20% invest in excess of 15% of overall marketing budgets to engaging with multicultural markets; 28% spend less than 5%.• 53% of marketers believe their investment into the multicultural market will increase going forward; 15% believe this increase will be significant; only 2% anticipate a decrease in investment.

For those marketers who have deployed multicultural marketing strategies, the operational approach is one that fails to separate initiatives into significant segments. Only 16% of marketers are separating marketing initiatives for specific ethnic groups, a practice which would allow for a deeper level of engagement thanks to relevant communications based on cultural behavioural patterns and insights.

"Multicultural marketing strategies must move away from the niche campaign mindset and become an engrained part of any personalised customer experience strategy," noted Liz Miller, Senior Vice President of Marketing with the CMO Council. "This is no longer a scenario of replacing images or localising content into a different language. This is about truly understanding the nuances of the customer, including any culturally distinct behaviours and buying patterns that can and must alter the way our brands reach and engage."

Hispanics contribute to 50% of consumer growth

The multicultural market in the US is an increasingly powerful consumer. According to Geoscape research, Hispanics currently represent 18% of American households but were responsible for nearly half of the growth in consumer spending from 2013 to 2014. Between Asian-American and Hispanic markets, the groups accounted for two-thirds of the total economic spending growth.

"By understanding cultural nuances and marketing in a proactive and data-driven manner, marketers are positioned to grow ROI...however, none of this happens overnight," says César M. Melgoza, Founder and CEO of Geoscape. "Targeting consumers, without understanding their unique cultural behaviours and preferences, risks growth optimisation among the consumer groups that quarterly and annual budgets and success can hinge upon."

Melgoza will join the CMO Council as a speaker at its upcoming CMO Summit, taking place 7-8 December 2015 in Napa, California. Melgoza will join a panel focused on intense segmentation of valuable and misunderstood markets, including multicultural, LGBT and millennial consumers. The CMO Summit is the CMO Council's annual gathering of senior marketing thought leaders. The by-invitation-only event will focus on the theme 'CMO Rising' and will cover numerous topics with an eye toward reshaping the role through talent, technology and transformation.

Key findings available for download

Key findings from the 10-question online poll of 150 senior marketing executives are included in a 12-page complimentary white paper, now available for download from the CMO Council. Some 36% of respondents hail from B2B organisations, 29% are from strictly B2C organisation and 36% are from hybrid organisations. Forty-three percent hail from organisations with revenues in excess of $1bn USD.

To download, click here.