Ready to improve your marketing success?
Contact us today for a free consultation!
Why Multicultural Strategies are Important
Demographic Trends in the United States: The United States (U.S.) is an every-growing and ever-evolving society. As of the date of this whitepaper, it is estimated that the U.S. population is 326.9 million people, and we add 6,298 people every day. That puts us only 3 days away from 327 million, and by the new year (2019) it is estimated that the population will be 328 million. In the next 12 years, it is projected that the US population will grow to over 400 million people. The United States will become 22% more densley populated in the next 12 years. But, that’s not the big news! The big news are the top 3 demographic changes that are already underway and will become more pronounced in the next 12 years.
The “melting pot” analogy for the US is alive and well, and one can argue that it is really just beginning! In our short history as a country, we are just now seeing the generations that are truly blending humanity. Because of this, it is estimated that the number of people who identify themselves as being “two or more races” will grow by over 50% in the next 12 years! Currently this population is estimated to be 8.4 million, and in the next 15 years will grow to 13 million. Projections going out to 2060, put the growth of this population at a whopping 196%!!! It is this growth trajectory that earns it the number 1 spot on our list.
Next up is the growth of those that identify themselves as “Asian.” Currently, the population is estimated to be a little over 18 million. In the next 12 years, this segment is expected to grow by 33%. By 2030, the Asian population is estimated to be a little over 24 million people. When the projections are extended further to 2060, this population is expected to grow by 100%, achieving an estimated total of 36.8 million!
The third major demographic shift that impacts multicultural strategies is the growth in the Latino/Hispanic population. It is the largest of the 3 segments mentioned here, currently at 57.5 million people. This population is expected to grow by 30% over the next 12 years, and by 93% between now and 2060. In the next 12 years, this segment will grow to represent over 20% of the United States total population! By the year 2060, it is estimated that this will grow to be 27-30% of the US total population, at the same time accounting for close to ½ of the population growth for the country!
It would be easy to assume that most of this growth in these segments is coming from immigration, and if you’re thinking that, you would be wrong. In the segment that identifies as “two or more races,” over 90% of the growth will come from US born citizens. In the segment that identifies as “Asian,” 38% of the growth will come from US born citizens, and 62% will come from foreign-born immigrants. In the segment that identifies as “Hispanic,” 68% of the growth will come from US born citizens, and 32% will come from foreign-born immigrants. When these three segments are averaged together from a population standpoint, 64% of the growth will come from US born citizens, with the balance coming from foreign-born immigration.
There are many other population trends worth researching and understanding that will inform your multicultural marketing strategies. One example of another massive trend is the aging population, which we will write about in an upcoming paper. The next census in 2020 will help to refine these projections, which will further inform approaches to marketing.
Purchasing Power Shifts: While the previous section ranked the changes in terms of percentage of change based on demographic, this section looks at buying power changes. The most notable here is the Latino/Hispanic segment. The buying power of this population segment has undergone dramatic increases over the past 27 years, and that trend will continue. From 1990 to 2017, the buying power of this segment grew by an estimated 700%! In 1990, this segment had an estimated buying power of $210 BN. In 2017, this segment had an estimated buying power of $1,700 BN, or $1.7 TN.
This segment comprises almost ½ of the population growth for the US in the coming decades. With it are a few more nuances that need to be understood, which should inform your marketing strategies. Currently, more than half of the US Hispanic population is under the age of 30! Television viewing still ranks high with this segment, accounting for 45% of advertising spend. Online content is consumed in both English and Spanish, at 56% and 44% respectively; however, over half indicate that they are more loyal to companies that advertise in their native language/Spanish. It’s also very important to this segment that companies advertise in-culture and not just in-language, and there’s a very big difference between these two approaches.
Business and Market Necessity: If demographic changes and increased purchasing power doesn’t make you a believer in multicultural marketing, then this last section should get your attention. Business ownership is also trending up dramatically! Across the multicultural segments, ownership levels are on the rise.
In the United States, the number of new businesses increases by less than ½% on a Continuous Annual Growth Rate (CAGR) basis. As an example, over a 5-year period from 2012 to 2017, the cumulative number of businesses added in the US was 2% or a 0.37% CAGR. (The raw numbers: 27.1 million in 2012 and 27.6 million in 2017.) Modest growth, right? When the numbers are examined from a Hispanic/Latino business ownership standpoint, the difference warrant focus. The number of new Hispanic-owned businesses increases at an average of 7.49% CAGR! Over the same 5-year period, Hispanic-owned businesses increased a cumulative of 43%!
The top 5 States for Hispanic-owned firms are:
- New York------------- 24,026
- Data as of October 2017
There is tremendous opportunity to embrace and leverage these multicultural trends in the United States. Not only is there opportunity, but it will become a business and market necessity as time moves forward. The pace of change is accelerating, and the successful companies of tomorrow will need to have an organizational capability in multicultural marketing.
Sources/references are provided in the downloadable whitepaper.
How We’re Better
We will work with you on a holistic solution that drives improved business performance. Our Multicultural Marketing practice is led by a seasoned marketing executive who is representative of the demographic changes taking place in the United States. We partner with you to help you establish in-culture marketing capabilities, not just in-language. Research shows that in-culture marketing drives improved customer loyalty which translates into improved purchasing behaviors.
Bernstein, R. (2016). Hispanic-Owned Businesses on the Upswing (December). U.S. Census Bureau. Retrieved on August 1, 2018 from: https://www.census.gov/newsroom/blogs/random-samplings/2016/12/hispanic-owned_busin.html
Vespa, J. Armstrong, D.M., & Medina, L. (2018). Demographic turning points for the United States: Population projections for 2020 to 2060 (March). U.S. Census Bureau, P25-1144.
Morse, P. (2018). Six facts about the Hispanic market that may surprise you. Forbes Agency Council. Retrieved on August 1, 2018 from: https://www.forbes.com/sites/forbesagencycouncil/2018/01/09/six-facts-about-the-hispanic-market-that-may-surprise-you/#93b6f345f307
Statistica (2018). Buying power of Hispanic consumers in the United States from 1990 to 2017. Retrieved on August 1, 2018 from: https://www.statista.com/statistics/251438/hispanics-buying-power-in-the-us/
U.S. Census Bureau (2017). Hispanic-Owned Firms Top Five States (October). Retrieved on August 1, 2018 from: https://www.census.gov/library/visualizations/2017/comm/hispanic-owned.html
World Population Review (2018). United States Population 2018. Retrieved on August 1, 2018 from: http://worldpopulationreview.com/countries/united-states-population/
Our offices are based in Dallas, Texas. We operate a network of qualified consultants globally to meet your needs wherever you do business.
email@example.com +1 (469) 573.1002
About the Author
Maria de Lourdes Gomez is a doctoral candidate in Business Administration at Swiss Management Center University. She is an accomplished and highly-skilled business professional leveraging nearly 25 years of marketing and project management leadership in several industries such as retail, consulting, medical, nonprofit, environmental, and education. Her specialties include strategic planning, loyalty and growth programs, promotion and advertising campaign execution, brand management, and new product launches in both domestic and international markets. Furthermore, as a strategic and tactical thinker, Maria also has extensive experience in ecommerce and digital initiatives, sales operations, analytics, cross-functional teams, printed and social media, broadcasting, and vendor management. She has a deep understanding of multicultural marketing thanks to her fluency in Spanish and Portuguese, as well as business proficiency in French and Italian.