When we speak of the U.S. Hispanic market, which Hispanic market are we talking about? The one that established the industry thirty-years ago or the one that will shape it in the next thirty-years? This is the topic of this month's In Perspective.
Almost everyone in the industry agrees that the composition of the U.S. Hispanic market has undergone significant changes, but few agree on its exact composition. So, let's pull some facts from Pew Hispanic Center (Suro and Passel, 2003) to set the record straight.
Demographics of the Hispanic Market
Between 1970 and 2000, the U.S. Hispanic population grew by 25.7 million with Hispanic immigrants accounting for 45 percent of that increase, and with second-generation Hispanics accounting for 28 percent. By 2000, first-generation Hispanics, totaling 14.2 million, made up 40 percent of the Hispanic population, while second-generation Hispanics, totaling 9.9 million, amassed to 28 percent; third-generation Hispanics, totaling 11.3 million, represented 32 percent of the total U.S. Hispanic population.
Between 2010 and 2020, the U.S. Hispanic market will continue to change. By 2010, first-generation Hispanics are expected make up 38 percent of the overall Hispanic population, with second-generation Hispanics increasing to 32 percent, and with third-generation Hispanics decreasing to 30 percent. By 2020, first-generation Hispanics are projected to make up 34 percent of the Hispanic population, with second-generation Hispanics comprising 36 percent, and third-generation comprising around 30 percent of the overall Hispanic population in the country.
Table 1 visually depicts the U.S. Hispanic market by three generational levels across three points in time—2000, 2010 and 2020. This chart shows that the U.S. Hispanic market has well defined segments, each comprised of millions of Hispanics who vary by the country in which they were born and based on how long their families had lived in the United States. So, what implications are there from such a diverse landscape?
According to the 2002 National Survey of Latinos, conducted jointly by the Pew Hispanic Center and Kaiser Family Foundation, the primary language spoken among U.S. Hispanics varies by generational level. Among first-generation Hispanics, 72 percent of Spanish-dominant Hispanics speak Spanish, 24 percent are bilingual and just 4 percent are English-dominant. There is no real surprise in these numbers, for most people. However, among second-generation Hispanics, 46 percent of U.S. Hispanics are English-dominant, 47 percent are bilingual and just 7 percent are Spanish-dominant. These numbers appear to be the inverse of first-generation Hispanics. And finally, among third-generation Hispanics, 78 percent are English-dominant, 22 percent are bilingual and 0 percent is Spanish-dominant.
What does all of this research tell us about the U.S. Hispanic market? It suggests that "the market" is not exactly a nice cohesive "market." The U.S. Hispanic population may be best called—a segment comprised of segments. Perhaps, a defining characteristic of the U.S. Hispanic population is that there are segments within the segment and that each is different from one another. The billion dollar question is how different are they from each other and on what factors do they differ?
Equally important in this discussion is the language factor. Does language unify or divide U.S. Hispanics? Based on the data above, language does not seem to unify all Hispanics living in the United States. As a result, we can no longer say that Spanish is the primary language spoken among all U.S. Hispanics and that Spanish is the only way to reach all Hispanics segments effectively. (See Table 2).
So, if U.S. Hispanics are inherently different by language, then what defines U.S. Hispanics? Is it culture? Or should we say, cultures—in the plural? To answer these questions, we turn to a study authored by Amado Padilla and William Perez in 2000, who measured cultural orientation across three generations of U.S. Hispanic adolescents.
This study found along American cultural orientation, third-generation Hispanics had significant higher mean scores (M=81.19) than both the first- (M=74.49) and second-generation Hispanics (M=77.17). However, first- and second-generation students did not differ greatly from each other on American cultural orientation.
On Hispanic cultural orientation, first-generation Hispanics had significantly higher Hispanic cultural orientation scores (M=74.74) than did the second-generation (M=68.01) and third-generation Hispanics (62.07), which is to be expected. These findings suggest that within a few generations, most Hispanic teens exhibit a predominant American culture orientation while maintaining traces of their Hispanic cultural orientation, simultaneously.
What does all of this mean? Though the study examined Hispanic adolescents, the findings suggest that one's orientation to the American (Anglo) culture predominates, while traces of Hispanic culture orientation remain. So, to what degree does this study apply to the other segments of the Hispanic population? Because U.S. Hispanics are exposed (to various degrees) to two cultures, it is expected that Hispanics in the United States will show differences in their Anglo and Hispanic cultural orientations based on their generational status.
In the end, the future of Hispanic marketing will need to address the cultural diversity within the Hispanic population. Having said that, we do not have to wait to do something about it; the future is here. As we saw in Table 1, 60 percent of the Hispanic population in 2000 was comprised of second- and third-generation Hispanics, many of whom speak both Spanish and English or English-only. By 2010, those figures will rise to 62 percent.
The question remains whether a Spanish-language effort is enough to target the U.S. Hispanic population. Based on the data presented by Pew, the answer seems to be that more must be done. Politically, it may be the wrong question to ask, but English does reach the bilingual and English-dominant segments. The question remains—how do we target these segments; and what are their differences?
Additionally, while there are clear segments within the U.S. Hispanic segment, it is important to note that they are all self-appointed Hispanics. But what does being 'a Latino' mean to each of these segments? They may use the same umbrella term, but do they define it the same way? Does it mean the same thing for all U.S. Hispanics? Besides using a convenient label to self-reference, what stirs the soul of these consumers? How different are they from one another?
The billion dollar question lies in—how to effectively address the diversity within the Hispanic segment from a media and marketing perspective. I am sure there is a great deal of work that's taking place right now to answer this matter. But who will take the lead? What will leadership look like, feel like, sound like? At this point in time, one thing is certain: the future of the U.S. Hispanic population isn't going to look anything like it did in the past. And neither should the approach.
This is Jake Beniflah with another issue of In Perspective.
Jacob Beniflah, Ph.D., CEO of Integrados, a strategic brand consulting firm in San Francisco for the U.S. Hispanic segment. Sixteen years of strategic brand consulting experience in Spain, Latin America, and in the U.S. general and Hispanic markets. Responsible for the strategic planning, brand positioning, and execution of marketing communication programs for Fortune 500 clients.
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