Brands with huge multicultural appeal don't always plan things that way.
In 2001, Mitchell & Ness, a Pennsylvania-based retro-sports-jersey maker, was a small business bringing in a respectable $3 million a year.
By 2002, sales had jumped to $25 million, and rose dramatically again in 2003.
The reason? The hip-hop crowd fell in love with the old-school uniforms the company made with NBA and other sports league licenses dating back decades. The brand soon turned into a status item for African-American shoppers, boosting prices to hundreds of dollars for a single shirt and giving the company a devoted consumer base in an ethnic community it had never before considered.
"They did not strategically say, 'We want to be big in that market,'" explains Michael Olguin, president of Formula PR, which was recently hired to do outreach for the company. "It was one of those things where it just became hot."
That heat was due in large part to interest from musicians, NBA talent, and other tastemakers. OutKast, Faboulous, and Sean Combs were just a few of the early adopters of the brand. Their public appearances at events including The American Music Awards introduced the vintage chic as a hip-hop must-have. Retro sports jerseys are now more than a $300 million-a-year industry that has crossed over to mainstream consumers and boasts lines backed by major companies such as Reebok.
But Mitchell & Ness isn't the only company to find surprising and effortless success in niche or multicultural communities. Brands from Tylenol to Adidas to the US Army have strong followings in ethnic enclaves without (initially) spending a cent on targeted marketing. Those largely accidental successes hold lessons on what resonates with ethnic America, and what marketers can do to advantageously - and intentionally - reach this ever-growing segment of consumers.
Establishing bonds with ethnic audiences
"There is always something organic about a successful campaign. You can't take one method and apply it across the board," cautions Armando Azarloza, EVP and head of the Hispanic practice at Weber Shandwick. "But I think there are certain lessons. The clear lesson is you must have a genuine bond, and the only way you do that is if you get your hands dirty."
Azarloza stresses that when you look at brands that have strong followings in ethnic communities, the common denominator is often a meaningful presence within that demographic. Sometimes that is the result of a purposeful strategy and sometimes it's chance.
Azarloza uses WS client Jafra Cosmetics as an example of a company that discovered an inherent interest from Hispanic consumers, then went on to capitalize on it.
"Jafra sort of stumbled onto Hispanic marketing in many ways," he says.
He credits that interest to two elements in the company's philosophy that resonated with Hispanics. First, "there was very much of an inspirational message connected with the product," he explains. Jafra, which like Avon or Mary Kay uses community-based salespeople, routinely highlighted that it could provide both flexibility and economic security, and still leave time for family. Those are all-important issues in the Hispanic community.
Second, "Jafra's entire marketing budget is based on grassroots meetings where they bring people to specific centers and talk to them about the opportunity," he adds. The combination of resonating values and face-to-face interactions proved a potent mix to Hispanic consumers, helping Jafra secure a strong new base.
Jafra also has a presence in Latin American countries such as Mexico.
The value of that name recognition from a homeland can't be undervalued, says Kang & Lee Advertising's Saul Gitlin.
"There is a carry-over of brand equity coming from the country of origin," he says, explaining that recent immigrants are more likely to use products that seem familiar, or have a strong presence where they are from. Gitlin points to Tylenol, which is an extremely popular painkiller in the Chinese-American market. He credits that to the product's strong presence in mainland China.
Alex Romanovich, president of Global Advertising Strategies, which specializes in communications to Eastern European and Russian immigrants, sees the same dynamic at work in the communities that he deals with.
He uses the example of the popularity of Adidas and Puma among Eastern European immigrants, who currently make up the third largest immigrant group in the US and are considered an important emerging multicultural audience.
"Russian Americans love Adidas (as opposed to) Nike," he says, "because Adidas had a plant in Moscow in the late '80s, Puma had a plant in Budapest in the early '80s, and Nike could only be bought at very exclusive stores for triple the price. So when (Eastern Europeans) migrated to the US, they (sought) Puma and Adidas."
But not every company or organization can count on country-of-origin familiarity as a positive boost or an easy way into niche audiences.
Victoria Varela, CEO of The Cartel Group, uses her client, the US Army, as an example of an entity that had to overcome its overseas image in order to reach US Hispanics.
"All research indicated that Hispanics had the highest propensity of any Americans to join the Army," she explains. "They have that tendency because they are so patriotic. The American dream is alive and well the most in recent immigrants and sons and daughters of recent immigrants. However, the representation of Hispanics in the Army did not match the percentage of Hispanics in the US."
Research found that marketing materials translated entirely into Spanish used the word "ejercito" for "military." However, that word had negative connotations for some Hispanic and Latin immigrants - such as Nicaraguans and Chileans - who had negative experiences with the military in their home countries. "For the most part in Latin America," Varela points out, "the relationship of the citizens with the army has not been that good." By rewriting marketing materials in a mix of Spanish and English that left "US Army" in English, the military was able to overcome that stigma and significantly boost Hispanic enlistment.
A different approach to research
The US Army's marketing initiative, says Varela, is the perfect example of why research is vital to reaching ethnic audiences, and how the lack of it can create a barrier. While there are undeniably some brands that come up with an uncanny resonance with an ethnic group, for most companies finding ethnic audiences can be a major challenge because their spending patterns and cultural nuances can be so different from the mainstream consumer.
To complicate the issue, Varela adds, ethnic communities often require a different approach to research than their mainstream counterparts.
"Corporations are locked in their headquarters and rely on their traditional research. That works fine if you are dealing with the traditional world," she says. "If you're dealing with first-time consumers (such as recent immigrants), you must look at insights that go beyond the readily available numbers."
Azarloza seconds that contention.
"When you go out and research in any minority community, you have to take a different approach," he says. "For example, few Hispanics will ever say anything negative about a particular product or ad campaign. They'll probably say, 'Well, I like them both.' Hispanics typically are a little shy and very cautious about how they deal with people. You must be a very good facilitator to understand that."
Varela also notes that ethnic consumers are often invisible in traditional research because they have different spending habits that put them outside of many data-collection methods.
"For example, about 50% of the US' Hispanic population is not banked and doesn't have credit," she explains. "So a lot of times when corporations rely on credit-card-transaction data to determine their customer base, they can have an entire customer base right under their nose that they don't even know about."
Varela uses client Church's Chicken as an example of a company that wasn't immediately aware of its customer base's diverse nature because it lacked insight into how ethnic populations were visiting its stores.
"They aren't necessarily in a footprint where there is a high Hispanic or African-American population that lives there," she says. "However, it's in a business or industrial section and you have a lot of blue-collar workers who go there every day. And guess what? They eat lunch there. They consume there because it's close to them."
Even when companies do find invisible consumers or unexpected success in ethnic markets, experts warn that they should not be complacent. Although many immigrant communities are insular and loyal to brands, they are also constantly bombarded by mainstream ads and outreach, which do have effect over time. Maintaining goodwill and strong ties to ethnic consumers has to be a priority to keep that customer base.
It's a lesson Mitchell & Ness took to heart, hiring Formula PR to help it maintain its positive image in the African-American community that so forcefully contributed to its success. Formula planned a $200,000 party at a hip LA nightspot during the recent NBA All-Star weekend, one of the biggest events in the US for this demographic.
"It was kind of a coming-out party as an aggressive marketer," says Formula's Olguin, "because they had never really done anything to give back to the urban market."
And while the company hopes to sustain its strong mainstream appeal in order to avoid the inevitable slow-down that every fashion trend suffers, Olguin points out that nurturing multicultural markets is a sound strategy for any business.
"What you see on people in the urban market in the big city is probably going to be seen in the more mainstream markets in a year and a half," he says. "They are very much leading markets."