Corporate America Spends Millions to Cultivate Hispanic Customers

AMERICA (By Kyle Stock, Knight Ridder Tribune) April 7. 2004 - They're the largest and fastest-growing minority in the United States, and their buying power is surging. It's no wonder Corporate America is spending unprecedented millions to cultivate customers among the swelling Hispanic population.

Between 1990 and 2002, Hispanic buying power in South Carolina more than quadrupled, ranking it as the sixth fastest-growing in the nation, according to University of Georgia research. Last year alone, Hispanics in the Palmetto State accounted for $2 billion in retail sales, a figure that is expected to double in five years, according to the University of South Carolina's Hispanic Immigration Project.

A growing number of companies are waking up to the potential, said Chris Cooper, managing partner of New Market Research Associates, a Charleston firm that helps companies decide where to spend their marketing dollars.

"You can just drive through Charleston and you'll see it," Cooper said. "More and more and more convenience stores, finance offices and grocery stores are advertising that they cater to Spanish-speaking consumers."

Maria Cordova, a downtown Charleston dentist originally from Chile, is among them. She began running ads in Spanish-language publications some time ago and now a quarter of her clients are Hispanic. "The change has been impressive," she said. "I've gotten a flood of (Hispanic) patients."

Sandra De La Maza, originally from the Dominican Republic, also has seen the numbers grow. She signed on with the Lucey Mortgage Corp. in Mount Pleasant about a year ago. Thanks in part to her Spanish skills, the company has seen "tremendous" growth in its loans to Hispanics in recent months, she said.

De La Maza is starting up a Hispanic marketing group so that real estate agents and other businesspeople in the community can share strategies on winning immigrant dollars.

A number of Spanish-language media outlets have sprung up locally, too.

Radio station WAZS 980 AM was launched as a Spanish-language broadcaster in 2001.

Phyllis Bancroft and Jose Luis Villegas started WJEA-TV 12, a low-power Spanish station, about three years ago after quitting their jobs on the evening news of a Telemundo affiliate in Hartford, Conn. Their new station, a Univision affiliate that airs on Knology cable, is aimed at what they view as an underserved Hispanic market.

"The market is definitely here, it's just a matter now of turning around some of the advertisers," Bancroft said. "Everybody seems to be waiting for the other guy to blink."

WJEA is negotiating with Time Warner Cable and Comcast so that it can reach more homes. It also has seen a lot of new advertising recently, including some from big nationwide accounts like Coca-Cola.

Vida Latina, a free Spanish tabloid newspaper started in the Lowcountry, had a circulation around 5,000 when Seth Mason bought it about two years ago. Today, the monthly newspaper distributes about 48,000 copies, and Mason also is signing on big national advertisers like Lowe's, Sprint PCS, Ace Hardware and Radio Shack.

Mason believes local and regional Hispanic advertising will surge in the near future to better reflect the number of Hispanics moving to the state. "The community is certainly diversifying and growing exponentially," he said.

Among the bigger area advertisers, Charleston-based Piggly Wiggly, which has more than 20 grocery stores in the region, has been the most aggressive so far. The company has beefed up its "Hispanic food" sections and started circulating Spanish-language fliers and taking out full-page ads in Vida Latina.

Still, much of local Spanish advertising, like De La Maza's marketing group, is concentrated in grass-roots efforts -- window signs, billboards and fliers.

Nationwide, Hispanic marketing is much more advanced.

According to Hispanic Business Inc., a California research company that helps corporations target Spanish-speaking consumers, U.S. Hispanic purchasing power is now about $600 billion, 7.4 percent of the country's total buying clout.

In response, Hispanic advertising by U.S. companies grew 24 percent in 2004, compared with 8.6 percent for the general market, according to Media Economics Group, a research firm that tracks Spanish-language marketing.

Some of the biggest companies in the country are making huge investments in their effort to win over Hispanic consumers. For example, Procter & Gamble, the massive Cincinnati company that makes household products ranging from deodorant to dog food, spent almost $70 million marketing to Hispanics in 2002, about a 27 percent increase from the year before. Philip Morris, Coca-Cola and Pepsi-Cola Co. all more than doubled their Hispanic advertising dollars in the same period.

A few weeks ago, BB&T, the nation's 13th-largest financial holding company, started distributing hour long Spanish tapes that include advice on choosing health care and opening a bank account. The Winston-Salem-based company is spreading the audiocassettes to the 1,350 branches in its 12-state footprint, including South Carolina.

One of the more aggressive companies to target the Hispanic market is HispanAmerica Corp., founded by Mount Pleasant resident Arnold Pitoniak. The company opened its doors in Mebane, N.C., in December 2001, pitching itself as the first corporation dedicated to creating, designing and selling consumer products exclusively to U.S. Hispanics.

HispanAmerica booked $115,784 in sales in its first nine months and, after a successful trial run, Wal-Mart ordered its apparel line for 380 of its stores.

HispanAmerica is about to roll out a line of credit, debit and phone cards targeted at Hispanic customers.

All of this is new to the way corporations view newly arrived immigrants. In the past, companies would welcome any new business that came as a result of immigration, but tended to wait for the newcomers, or the newcomers' children, to figure out on their own what their ads meant and what their products or services were.

"The Anglo-Saxon dominance in America was so strong that we didn't have the sensitivities towards immigrants as we do today," said Bruce Murdy, a partner in Rawle-Murdy Associates, one of the area's biggest advertising firms.

But the recent wave of Hispanic immigrants is much bigger than any previous influx. Consequently, Hispanics have gained a sort of critical mass.

"We no longer feel pressured or compelled to assimilate into U.S. mainstream culture and leave our own cultural values behind," said Michelle Maldonado, a spokeswoman with a New York-based Hispanic marketing firm.

"Because of the critical mass, our purchasing power has (been), and is projected to be, a force to be reckoned with."

WJEA's Bancroft said that on a local level, advertising will pick up as more businesses have direct contact with Hispanic consumers. More of her station's new advertisers are signing on after watching their Hispanic customers spend freely, buy name brands and pay in cash.

"People can only ignore it for so long," she said. "Doing business is doing business. It's commerce, it's all green. It has nothing to do with the color of your skin or the language you speak."